Performance Management Best Practice


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There is an awful lot of performance management “best practice” out there.  Lots of books, seminars, HR gurus and management consultants who tell you what to do and sell you a model.

But which practice is the best practice?

In 2002 the corporate leadership council decided to find out.  It isn’t a hugely original question.  Lots of people are interested in productivity.  But the corporate leadership council applied a little more vigour than most.

First they defined “performance”

As anybody who has ever had (or conducted) a performance appraisal knows, measuring performance is fraught with challenges.  The CLC defined performance as an individual’s annual performance management rating and used that as their ruler.

When I read that I was tempted to take the results with a big pinch of salt.  Have you ever met anybody who agrees with their boss’s view of their performance?  However, the CLC surveyed 19,000 managers and employees in 34 organisations.  Quantity has a quality all of its own and there is a lot of truth in the adage that perception is reality, so I think this method made a reasonable yard stick.

Next they found out what improved it

They collated a list of all the theories and approaches they could think of; listing everything they could find in the management literature and asking the opinion of a plethora of senior H.R. executives.  They collected 106 different factors that were claimed to improve performance.

Then they sent out a questionnaire to all 19,000, people asking many and varied questions:

  • How is feedback delivered, face to face or in writing?
  • Did you work with a mentor?
  • Does your boss hold you accountable?
  • How many formal reviews do you have a year?

The questionnaire went on a bit, there were 200 questions in total.

Finally the compiled the results

They grouped the 106 factors into 7 different categories:

  1. Performance management system
  2. Culture
  3. Manager employee interaction
  4. Formal performance review
  5. Informal feedback
  6. Day to day work
  7. Job opportunities

Then they ran a bunch of statistics and produced a report that showed what worked and what didn’t.

What did they find out?

A whole host of interesting things.

Here are a couple I have banged on about for a while:

One question caught my eye:

When conducting a performance appraisal, where should the emphasis of the discussion be?

The answer looked like this:

Click to Enlarge

According to 19,000 people, managers who focus on employees “opportunities for developmentmake things worse.

All they do is convince the employee that they are in the wrong job and demotivate them.  Consequently they put in less effort and their performance goes down.

If however the conversation is about what went well, the employee will walk away far happier and will put a lot more effort into the job in hand.

A beautiful example of the Pygmalion effect at work

I liked this report

Despite my reservations about the way they measured performance…

But there is a big danger that I only liked it because I agreed with it.  If I hadn’t I may well have ignored it.  I am as guilty of a little conformation bias as the next man.

So don’t take my word for it, download the report here and make your own mind up.  Just be warned it is 117 pages long.

Whether you agree with the report or not, it does make one point beautifully.

There is plenty of “performance management best practice” out there, and remarkably little evidence to support it.

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Republished with author's permission from original post.

James Lawther
James Lawther is a middle-aged middle manager. To reach this highly elevated position he has worked for many organisations, from supermarkets to tax collectors and has had multiple roles from running a night shift to doing operational research. He gets upset by operations that don't work and mildly apoplectic about poor customer service.


  1. One of the most common personal traits we have as individuals is the need to feel attracted to silver bullet solutions. A challenge that any statistical range of answers will do is provide a general picture and rarely an overview of how that applies to your specific scenario.
    So, a business in “x” industry, with “y” number of staff,performing work within”z ” department, lead by a manager of “a” capabilities located at “b” with an average salary within “c” range…….Too many variables that will impact the employee and measure of performance management.

    I always suggest to take each case on its own merit and circumstance. The rest is nice for an overview and consideration.

    There will be new opportunities out there including the rise of gamification, OKR and OPTIMAL performance management systems to consider.

    This report provides good insights but we need to be reminded it is a summary from thousands of examples represented in statistical and opinion form. You should to make your own decisions with that perspective in mind.


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