The performance management myth

There are some things in life that seem logical, but are just wrong. I remember early in my study of Sociology one lecturer defining this as the Common Sense trap – that there was no such thing as common sense, and that often what appeared to make perfect sense actually didn’t. I guess that in the last few years people like Steven Levitt and Stephen Dubner of Freakonomics fame have made a career out of demonstrating that trap.

One of the things that falls into this category is the practice of performance management. It seems to make such great sense: set clear, SMART objectives to an individual; monitor their performance based on those objectives; reward them based on the attainment of those objectives; repeat to greater and greater business performance.

But does it actually work? Well, a search for ROI (or Business Benefits) of performance management on the Internet seems to draw little conclusive evidence (and certainly not a wealth of clear evidence). As a social system, however, it is nigh on impossible to double-blind test the hypothesis of performance management in the real world.

The issues, it appears to me, are two-fold: firstly the challenge of measuring the subjective, and secondly the issue of timeliness.

The truism that if you can’t measure it, you can’t manage it is a terrible old cliche that reduces modern life to a series of often irrelevant numbers. Reductive thinking about how to measure something important leads to people chasing targets rather than objectives and missing the point as a result. Maybe it would be better to refer to these things as “subjectives” rather than “objectives” and be done with it. Physical piecework is about the only thing for which the relative performance of people can by measured objectively (take bricklaying for want of a better example), and the rest all starts to become the realm of the subjective. Do we really want to work in a world where we only do things because we can measure them?

The timing issue, though, is the one that is much more fundamental in this increasingly fast-paced world. I can’t remember a year of my working life where the objectives set out at the beginning of the year were the ones that were important by the end of it. We live in a world where a new product can come to market and completely rejig the competition (or just die again) in a matter of months. So why are most people’s objectives still set in 12-month timespans? Who has such sage-like ability to predict so far into the future?

The solution to all of this? Well, I’m no management guru. But my hunch is that shorter time-framed, project-focused and team-based objectives would make for a more effective organisational delivery than individual objectives set over the course of a whole year. And effective project governance that celebrated rather than castigated the ending of projects that didn’t deliver what was expected would help too.