Performance management systems: Why promise-based management works
Provide the results necessary for meaningful, measurable and effective outcomes.
6 MINUTE READ
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August 20, 2018

It's not unusual to hear employees complain about the performance management system their human resources team forces them to use.

These programs have a reputation for being associated with the dreaded performance review, and they often aren't effective at setting job performance expectations and measuring employee performance.

However, performance management systems that revolve around Promise-Based Management and social discipline can provide the results necessary for meaningful, measurable and effective outcomes.

What Are Performance Management Systems?

As organisations grow, managers and teams need a standardised performance management process in place for goal-setting and gauging individual performance. At best, they are aligned with your organisational culture and strategy, provide clear communication channels and serve as a performance appraisal tool for managers, employees and teams.

At worst, they can be obligatory, lack meaning, de-motivate teams, slow the decision-making process and take time away from important work towards meeting your key initiatives and goals. Performance management systems should do more than turn a job description into a set of rote tasks where the employee's performance is only evaluated with an annual performance review.

The best performance management systems foster employee development, provide constructive feedback, effectively measure key results and are transparent across every layer of the company. The performance management process should be easy to use while keeping teams and individual employees accountable for reaching their goals. They should also feature clear goal-setting tools and tracking methods to measure performance results.

The Major Pitfalls of Performance Management Systems

Often, leaders in organisations adopt a performance management system with enthusiasm, convinced the program will help managers connect with direct reports while establishing an avenue for constructive feedback, provide professional development opportunities and track performance issues.

In reality, it's common that the system is cumbersome to use and not widely embraced by the organisation as a whole. The training needed to utilize the system correctly is left unaddressed.

A major flaw of many traditional performance management systems is that they measure performance results long after the goals have been set, such as during a performance review, even if performance expectations have changed.

Organisational goals need to be malleable in order to shift with industry trends and organisational change. Without a useful way to accurately measure group and individual performance in real-time, it becomes nearly impossible to hold team members responsible for meeting critical goals.

The Free-Rider Effect

When individual employees work in groups without developing clear performance measures and organisational goals, team members can't be held accountable for achieving results. Naturally, a Free-Rider (or Riders) will emerge. The ‘Free-Rider Effect’ happens once team members realize that other members of the group will pull their weight for them, and they can easily get away with it because individual performance isn't being closely monitored.

The Sucker Effect

Free-Riders don't go unnoticed. Once the hard-working members of the group realize not everyone is pulling their weight, the ‘Sucker Effect’ enters the equation. To avoid being a ‘sucker’ these typically high-performing employees hold back to bring equilibrium to the team. Consequently, work output is drastically reduced. The group may still achieve their goal, but motivation diminishes and organisational performance suffers.

Development plans aren't put into writing, constructive feedback is neglected, and the group spends countless hours in meetings brainstorming and making plans that are never executed. Action items aren't assigned, productivity is hampered and employee engagement hits an all-time low.

What can companies do to prevent the consequences of a poor performance management system?

Effective performance management begins with the psychology of Promise-Based Management to deliver excellent organisational performance and sustainable employee engagement.

What Is Promise-Based Management?

Promises are made daily in the business world, whether they are made to co-workers, managers or customers. Promises, combined with social discipline, create a transparent work environment and a performance management process lined with individual accountability.

What happens when promises are made in a public space for everyone to see? Performance expectations become crystal clear and employees at every level of the organisation become socially motivated to honor their promises.

Companies that rely on keeping their promises also generate an increase in employee engagement with a feeling of community around shared ownership of goals. Morale and motivation improve, and overall organisational performance soars.

The social discipline behind Promise-Based Management creates a heightened sense of awareness when an employee knows their goals are visible to their team members. That transparency makes it easier to gauge individual contributions and employee performance while creating the opportunity to weave a reward system into the public space with positive feedback.

What Makes a Good Promise?

The most significant aspect of implementing Promise-Based Management into any performance management system is ensuring everyone on the team knows how to craft good promises they are capable of keeping. All promises should be:

Public

When an employee makes a promise that is tracked in a public place, they are likely to honor it to guard their reputation and avoid letting the group down.

Active

Promises should not be accepted or requested passively. The timing of delivery and possible conflicts or assumptions should be handled prior to making a commitment.

Voluntary

Team members should not be pressured into making a promise. Promises should be carefully negotiated to allow the promise-maker to retain ownership of the commitment, increasing accountability.

Explicit

Promises should be clear and concise, explaining who will do what, by when.

Mission-Based

Each promise should directly relate to the mission of the organisation and clearly explain which organisational goals completing the promise fulfills.

FAST, Rather Than SMART

A traditional performance management process recommends that goals should be SMART: specific, measurable, achievable, realistic and time-bound. However, research indicates the most effective goal-setting methods follow the FAST acronym. In Promise-Based Management, goals are rooted in:

F - Frequent discussions
A - Ambitious objectives
S - Specific measurements
T - Transparent work environments

Once a promise has been fulfilled, it should be publicly documented in the performance management system. Team members should provide frequent feedback to one another to continually improve the process.

The Role of Technology In Creating a Powerful Performance Management System

Meaningful and effective performance management doesn’t have to be complicated. With the right software and training, your team can have the ability to track individual and team efforts in a transparent environment. The best software takes the red tape out of performance management by reducing time spent in meetings, measuring what matters in real-time and putting it out there for everyone to see.

Samewave is social performance management software designed to leverage the power of social technology to create a work environment centered around results. The software allows companies to create, track, measure and discuss their promises while increasing productivity levels and employee engagement.

Samewave's simple user interface, direct communication channels, automatic reporting features, interactive scoreboards and straightforward task management tools set teams up for success. Learn more about how you can improve employee engagement, communication and get things done. Get your team on the samewave today, for free.

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