5 Performance Management Problems [And Possible Solutions]

If you can, think back to life before the Internet came to the masses.

Think back before chat rooms, Internet Explorer, Facebook, iPhones, and Google. Here in this distant memory, if somebody were to bring up the term “worldwide web,” how would it be received? They’d probably get confused looks unless they were speaking to somebody with arachnophobia, in which case they would incite only revulsion—and terror.

There’s another phrase that has long elicited that kind of response in the business world: “performance reviews.” But just like technology has forever changed the way we think of webs, technology has changed the way we look at performance management solutions.

Why Is Performance Management Important?

Three of the biggest challenges for businesses today are attracting and retaining talent, creating innovative business models, and developing future leaders. And guess what these components are linked to? Performance management.

Performance management is rooted in building an empowered and skilled workforce. The value of the talent you have has a profound impact on the quality of the products and services your organization produces. Therefore, performance management plays a vital role in the success of your business. You need to carry out the right programs and strategies that will effectively assess and improve performance so that employees can grow.

The world of performance management is now at the point the Internet found itself in the mid-90s: Perceptions are changing, technology is improving constantly, and improved best practices are being adopted in record numbers. New software that takes care of the mundane tasks of performance management reviews is entering the market. Enterprise performance management software is changing the game.

What Are the Most Common Performance Management Problems that Managers Deal with on the Job?

Despite recent advances in software and strategy, performance management is still a huge stumbling block for many organizations, and it can be a living nightmare for both managers and employees. There are several issues that come up between management and staff that affect how quickly an organization reaches its goals. A few common performance management problems that managers see are:

The good news is applying new studies and innovative software programs can make hurdling those challenges of performance management much easier. That’s why we’ve teamed up with performance management specialists to deliver five solutions to three common challenges in the review process. Read on, and take your performance reviews to the next level.

Ineffective Performance Management Practices

Inefficiencies in performance management have hurt, rather than enhanced, business output. These insights from business experts offer intuitive perspectives on why some practices are ineffective.

1) Focusing on outdated performance review methods.

Karyln Borysenko, Principal at Zen Workplace, reminds us that the old ways of handling performance still permeates too much of the business world. “I think it’s important to note that although a few high profile companies have gotten rid of the traditional annual performance review questions, the vast majority of companies still utilize it. But here’s the thing: The annual review has very little to do with performance management—it’s simply paperwork. Since no one buys into it, it does nothing to actually manage performance.”

Effective or not, it may take time before the old model is gone for good. But according to Randy Pennington, President of Pennington Performance Group, there is hope. “Some organizations will hang on to their traditional annual review processes for many years to come; some government agencies are required to do annual reviews, for instance. But even those will move to an approach that emphasizes performance management as an ongoing process rather than an isolated event.”Data-driven analytics aren’t everything, employers should be focusing on the well-being of employees. Ongoing performance reviews can provide necessary feedback at crucial times. A more modern, continuous review process gives employees the tools they need to progress quickly and efficiently.

Discover new perspectives on performance management through different generations, genders, and job levels.

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2) Pleasing the boss instead of improving performance.

According to Timothy G. Wiedman, Associate Professor of Management & Human Resources at Doane University, too many performance reviews focus on making some happy—at the expense of others. “A boss-centered appraisal system runs the risk of focusing employees’ attention on pleasing the boss—possibly at the expense of … achieving some other important goal. So employee behavior that may ultimately harm the organization might actually be rewarded by an appraisal system that does not capture vital information.” This type of performance review can infringe on employee’s rights to do what they feel would best benefit the company in lieu of attaining the boss’s approval. Top employers create strategic plans to aid their employees in using their agency and creativity to work out solutions.

3) Depending too much on technology.

Technology is revitalizing and reinventing performance management for good, but it’s not the be-all and end-all. As Pennington points out, “Technology is both a benefit and a curse to effective performance management solutions… The curse is that technology can become a crutch or something managers and supervisors hide behind to avoid meaningful interaction. We see that today.”

Instead of chatting in-person regarding an issue, employees might use the company’s messaging platform or phone to communicate with colleagues even when both parties are based in the office. Both of these methods can get the job done, but it inhibits the growth of valuable and personable relationships that are necessary to produce quality work.

Check out this video on company culture to see if it could help you solve your Performance Management headaches.

Performance Management Best Practices

Now that you understand the common issues and failures, how do you overcome performance management problems?

1) Frequency is key.

Across the board, experts agree that frequency is vital to improving performance management. From Borysenko: “Forget the annual review or even quarterly reviews … to really improve, employees need to see frequent, consistent, ongoing progress. That’s momentum. The more momentum they build, the better they are able to achieve their goals.”

Brad Stultz, Human Resources Coordinator at Totally Promotional, offers his experience: “We discuss employee performance on a daily basis. As we see an employee stepping up to the plate, we look toward raises, promotions, and bonuses. This also encourages supervisors to deal with performance-related issues more quickly.” Managers can use employee management software to consistently follow up and improve performance feedback. Or as Dr. Sayeed Islam, Assistant Professor of Industrial Organizational Psychology at Farmingdale State College put it, “If a child makes a mistake or behaves inappropriately, it’s most effective to tell that child right away. No one waits until the annual child performance review. The same holds true for employees. The timing of feedback is as important as the feedback itself.”

Ongoing performance reviews can be hard, as it requires more of managers and supervisors. As Pennington points out, “The focus on more frequent or ongoing feedback, coaching, and development is not new.” It’s an incredibly simple concept that has only been overlooked because it can be hard. But it’s important to remember that it is worth it. When employees are happy and receive consistent feedback, it can be felt through the company, down to the customer level.

Adobe famously scratched all of their performance reviews, because they believed it was time consuming and labor intensive. Though many may have assumed this would become a performance management failure example, Adobe rose up with a solid performance management system. It entailed something called a “Check-in,” which is “a two-way, ongoing dialogue between manager and employees.” This continuous feedback loop has helped Adobe achieve higher engagement and retention among its employees.

2) Maintain a balanced approach.

To avoid the unbalanced review processes—and its negative ramifications—Wiedman recommends 360-degree assessments: “In a 360-degree assessment, customers (as well as supervisors, colleagues, and subordinates) would have a direct voice in an associate’s appraisal. So it is a good bet that smart associates would be cognizant of the concerns of multiple constituencies. Further, a strong performance in one area … might offset a marginal performance in another.

Thus, the 360-degree assessment gives a much more balanced view of an employee’s contribution to the success of the organization.” When employers identify those areas where the employee is successful, it will build employee morale. At the same time, performance reviews can be used to improve weak areas by implementing strategic plans for each employee’s further success.

Discover new perspectives on performance management through different generations, genders, and job levels.

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3) Automation paves the way.

Employee performance management software brings about performance automation, which paves the way for improvement in almost every area. Thomas Grobicki, CEO of Avilar Technologies, breaks down the best performance management tools new technologies have to offer like this: “Automation to handle the mundane aspects of reviews is a given. Reviews are being conducted all year long with highly individual and tailored approaches. Employers are using activities like performance journals, performance planning, performance coaching, peer reviews, as well as competency management to expand the picture they have of the employee.”

With automation, business leaders can do more to improve performance in less time than they used to. Enterprise performance management software is available to almost all company sizes and can work to any company’s advantage. Pennington: “The benefit [of technology] is that it provides a more efficient and effective tool for capturing and sharing information. Performance management technology will continue to evolve to match the needs and preferences of users.”

4) Better follow-up leads to improvement.

From Dr. Islam: “Technology also allows for easier collection of data. An employee can now receive more feedback from more sources than ever before. Technology now allows for a more objective view of actual performance on a project, and this can result in more effective behavior change. Technology also improves the record-keeping of performance feedback so more effective follow-up can result.”

5) Focus on people and relationships.

It comes down to these two things. If you have relationships with the people you work with, positive growth in performance will happen. As Borysenko puts it, “Really smart companies are going to understand it’s about managers developing real relationships with their team and empowering them every single week to see the progress they’re making and what’s possible in the future.”

Or as Pennington put it, “Forms and technology are the tools, not the goal. The goal of performance management is to build superior performance for the individual and organization. That happens best when leaders take an active interest in people.” It happens when performance reviews are continuous and ongoing. There’s simply no way around it.

Whether the term “performance review” still causes you fear and anxiety or not, it’s comforting to know that someday it will probably take on an entirely new, positive meaning. Just like the world wide web, employee performance management solutions continue to develop at the speed of technology. And all we have to do is face the challenges head-on, embrace the positive solutions available to us, and watch the performance challenges of our people improve with each passing day.