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Performance Management needs to be fair. Here’s why and how.

I was intrigued by the title of the McKinsey Article. Fairness in performance management.

Fairness and Leadership

Fairness is one of the main elements on which sustainable leadership is based, as I have described in my book. Performance management is a tool for leaders. So it is clear that it should encompass the idea of fairness.
As Cedric Velghe rightfully points out it might be better to see performance management as a process to make progress happen, rather than a process of evaluation.

Every time we speak of evaluation, we get into the realm of justice and fairness. Evaluation is often linked to salary evolution. Therefore the process of performance appraisal often becomes a process of biased negotiation. It even gets worse when we add forced distribution (who still does this?).

Too much

Also, could it be that we overload the performance management approach with too many targets? And that we pollute it by adding administrative and budgetary elements?
We should ask ourselves which of the 3 functions of performance management as described in the McKinsey article, adds more value to the organisation:

  1. linking employees’ goals to business goals
  2. coaching
  3. differentiating compensation. Should the main function not be motivation of people?

In any case, we should explicitly choose what we want to get out of it.

Do We Need It?

I am convinced that we need a process that is focussed on progress and results. But it should be motivating (and fair).
And we should not forget that motivated people do not need such a process. We know that we cannot motivate demotivated people with this process. So let’s be careful with what we do.
But the performance management approach could be a way to:

  • create meaningfulness and direction (what do we need for whom and why),
  • help people to develop their competencies (how can we get there)
  • develop real autonomy (a balance between trust and control).

How to Improve?

Here are some suggestions from my side:

  • Talk about purpose management, rather than about performance management. Talking about purpose makes it easier to discuss the progress
  • Focus on informal ways of influencing progress. The 5 minute conversation a leader has might be more impactful than the formal review
  • See leadership as a process that helps people move towards the creation of value. Or put in another way: making sure people are willing and able to perform sustainably.

Bad Leadership

I have seen leaders do the reverse. And the deplorable way they used performance management was a symptom of their inability to lead. So let’s work on this. Performance management should be a light tool that nudges leaders into productive leadership behaviour.
If we implement or review a process of performance management in an organisation, let’s think it through.

David Ducheyne is the founder of Otolith. As a former HR and business leader he focuses now on humanising strategy execution.

One Comment

  • Thanks for sharing your views and the link to the McKinsey article, David. Purpose Management vs. Performance Management – succinct and effective, I believe (the former, that is.) I’ve read the McKinsey article (now), and I plan to incorporate this intent (and language) more clearly in my work. Much appreciated.

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