Hr Myth # 2: Performance Management

Performance management is an oxymoron. The behaviors that separate high from low performing employees, can’t be managed at all. Let me explain…

The profit margin of your company is made in the dark. It’s made outside of the view of the cameras, without the watchful eye of the IT department, and behind the backs of every manager you’ve ever hired. The margin is made when no one is looking, and therefore can’t be managed at all. Your profit is made when employees are deciding what to do with their time and resources, when no one is looking. If they have an opportunity to steal, do they take it? If they have an opportunity to bring a new piece of information from the market to the management team, do they take it? Are they conspiring on behalf of the company, or against the company on their own behalf? Shrinkage, missed opportunity costs, passive and active disengagement, these all happen when employees are not being managed.

Gallup reported last year that 70% of the variance on employee engagement comes down to the employee-manager relationship. If the relationship is good, then the employee will behave well when they are not being watched, and if the relationship is bad, well… you get the point. So even though performance can’t be managed directly, it certainly can be influenced indirectly by the manager.

Ultimately though, people will do what they want to do. And people who are motivated by carrots and sticks tend to behave like donkeys. If the carrot or stick isn’t big enough, they’ll do nothing at all when they’re left alone. Low performing employees require management. But higher performing employees manage themselves.

#humansnotresources are motivated intrinsically by their own personal goals. They want a higher quality of life, to collect new skills and experiences, to connect with the people around them, and to invest in a worthwhile cause. The more we can connect our teammates with these personal reasons for working, the more they will feel that they are working for themselves. That’s when they will start to behave differently when no one is looking, and that’s where the margin of the company lies. So what do we do?

Start by redirecting management skills toward coaching skills in the manager. Any manager that cannot maintain a good empowering coaching relationship with their staff is missing out on 70% of the engagement potential of their team. Organizationally, that means you are all paying more in leave days, attrition, absenteeism, shrinkage, security and safety incidents, missed opportunity, reduced performance, and lower productivity and profitability.

We have numbers for all of these, so let me know if you want the stats!

Instead of performance management, start making meaning at work a part of a new corporate culture of personal performance. Start with the manager.