Recognize This! – Forced ranking is a proven failure. So are traditional approaches to employee incentives.

Yesterday, I jumped on the bandwagon of everyone commenting on the evisceration of Microsoft’s forced ranking performance management system. So, if that’s not the solution for better performance management, what is?

Perhaps we need to start with understanding exactly why employees don’t do what we need them to do. Earlier this month, Blanchard Leader Chat pointed out research based on survey results from 25,000 managers on precisely this question. Just a few of the top 16 reasons were the obvious ones of employees don’t know what to do, how to do it, or why the should.

The next step in the breakdown, Helen Giles in HR Magazine points out is managers simply don’t know how to or can’t describe objectively for employees what good performance is. As she writes:

Quotation

“Intellectually, they accept that there’s at least a degree of plausibility in the proposition that if you are investing in the expensive piece of kit that is an employee who might be costing you, let’s say, £25,000 a year, it’s wise to ensure your return on investment by setting a crystal clear specification of what you want them to deliver in terms of speed and quality of outputs and outcomes. But they simply find it devilishly difficult to do in practice.”

Helen then goes on to argue that less emphasis needs to be placed on employee engagement and more on “good old fashioned performance management.” This is all well and good, but as Personnel Today reports, managers aren’t equipped to deal with underperformance. Yes, difficult conversations are, well, difficult to have. But they can be made easier with more data.

And that’s my point with this post. Good performance management of employees requires 3 things:

1. Good direction – Strategic, social recognition solutions make it clear for employees exactly what is expected from them, both in terms of what needs to be accomplished as well as how it should be done.
2. Good data – Opening up a strategic recognition program to all employees to both give and receive means you’ll have vastly more data points around who is living your core values in their daily work as they contribute to achieving your key objectives.
3. Good discussions – With this expanded data now available in real time, managers have at their fingertips the data to share with employees at a glance where they’re doing well and how they can improve. Critically, because managers have also built stronger relationships with employees by giving good direction through positive feedback more frequently and in a more timely way than just at an annual review, it’s easier for managers to discuss areas for improvement and how employees can do so.

What do you see as key requirements for good performance management?