You Can't Manage Performance . . . You Have to Lead It!

A New Paradigm for Strategic Execution and Employee Engagement

Strategic execution often fails because companies struggle to connect high-level goals with individual performance. Research shows that less than 10% of employees understand their company's objectives (SHRM, 2021). This lack of clarity reflects deeper issues with traditional performance management.

Rather than trying to "manage" performance through rigid systems, organizations should focus on creating the conditions for employees to take ownership over their own performance. Let’s look at how to shift mindsets from managing activities to leading performance.

The Failure of Traditional Performance Management

The typical performance review process has remained stagnant for over 50 years (Deloitte, 2015). Yet study after study shows that traditional methods don't work. Just 8% of companies report that their performance management approach drives high levels of value (Gartner, 2018). Why the disconnect?

Traditional systems focus too heavily on assessing past activities rather than future outcomes. They emphasize top-down evaluation rather than support and coaching. The result is a demotivating and demoralizing experience for employees and managers alike.

Leading Research on Engagement and Productivity

Decades of research in motivation theory highlights what really drives engagement and productivity:

• Clear outcomes: Collaboratively set, measurable, ambitious, and trackable performance objectives (Locke & Latham, 2006).

• Autonomy: Give employees freedom in how they achieve the outcomes (Pink, 2011).

• Continuous Coaching: Provide regular feedback, resources, and support (Whitmore, 2017).

Yet typical performance management delivers none of these consistently. A MIT study found only 20% of managers coach effectively (CAP, 2016). This contributes to a disengaged workforce, with 70% of employees not fully committed to their work (Gallup, 2017).

A New Approach: Performance Objectives and Reverse Performance Leadership

To align with the realities of today's business environment and human needs, organizations must embrace two critical elements: performance objectives and reverse performance leadership.

The Power of Performance Objectives

Performance objectives are quantifiable, stakeholder-focused metrics that directly answer whether an employee has made a significant impact. These objectives:

• Provide clarity and alignment across individual, team, and organizational goals.

• Focus on outcomes rather than tasks, giving employees autonomy in their roles.

Implementing Performance Objectives

Creating effective performance objectives involves:

1. Identifying 3-5 high-impact areas per role: Determine 3-5 performance objectives categories that will have the biggest positive impact on key internal and/or external stakeholders for each role.

2. Define Measurement Scales with Targets: Next, set target thresholds to evaluate performance in each category on a 1-5 scale. Level 3 should represent the desired stretch target, while level 4 is for exceptional performance above and beyond goals.

3. Weight each category: Finally, weight the categories to reflect organizational priorities and role responsibilities. The total of all weights should equal 100%. Higher weights indicate greater importance for enterprise objectives.

Reverse Performance Leadership

Once clear performance objectives are in place, they will be optimally achieved in a system we call “reverse performance leadership.” As opposed to once-yearly reviews focused on grading past activities, leading performance requires leaders to coach progress in real-time.

One of the biggest constraints leaders face in trying to provide meaningful feedback to their direct reports is time. Our unique three-tiered check-in structure solves for this by enabling efficient and effective cadence that is focused on achievement of the performance objectives.

• Monthly Progress Marker (20 minutes): A monthly check-in between a manager and direct report to review progress on performance objectives. At least 24 hours prior, the direct report self-evaluates and scores their progress. The manager reviews these scores to identify achievements and challenges. Using software like Monday.com to track objectives ensures an efficient meeting focused on assessing progress and adjustments needed. The manager asks: (1) What were your biggest accomplishments? (2) What challenges did you face? (3) How can I support you?

• Quarterly Reflect (60 minutes): A quarterly check-in that broadens in focus to 90-day trend analysis of performance and progress indicators combined with an assessment of employee well-being, development opportunities, and any support required.

• Biannual Evaluation (90 minutes): First, a mid-year evaluation reviewing year-to-date performance against objectives, assessing what's working well and any necessary realignments to targets or measurements. Then, an end-of-year assessment examines goal achievement, personal development, and creates new performance objectives for the upcoming year.

In Closing

The business world has changed, but performance management hasn't. By shifting focus from managing to leading performance, organizations can foster a culture of engagement, autonomy, and ownership. This shift not only aligns with intrinsic motivation but also propels businesses towards their strategic goals more effectively.

For more, see our book Leading Performance, Because It Can't Be Managed

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References

• CAP. (2016). Developing tomorrow's leaders, today. MIT Leadership Center.

• Cappelli, P., & Tavis, A. (2016). The performance management revolution. Harvard Business Review.

• Deloitte. (2015). Global human capital trends. Deloitte Insights.

• Forbes. (2013). Performance management is broken. Forbes Online.

• 15Minutes4Me. (2019). What are monthly 1-on-1 meetings? 15Minutes4Me.

• Gallup (2017). State of the global workplace. Gallup Press.

• Gartner. (2018). Performance management solutions review. Gartner Research.

• Locke, E. A., & Latham, G. P. (2006). New directions in goal-setting theory. Current Directions in Psychological Science.

• Pink, D. (2011). Drive: The surprising truth about what motivates us. Penguin.

• SHRM. (2021). Business and HR strategy alignment survey report. SHRM Research.

• Whitmore, J. (2017). Coaching for performance: The principles and practices of coaching and leadership. Nicholas Brealey.

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