With the start of the new year, everyone is excited about the possibilities to come. “This year,” business leaders think, “performance management will be different.” So, they set goals for employees and conduct annual reviews in hopes of inspiring them to do even better.
But before too long, those leaders’ focus shifts to budgets and profit margins. And, when several key employees quit, the number one priority becomes recruiting and retention. Then, several big clients move to a competitor after experiencing subpar service.
Soon, it’s the end of the year again, and leaders are again left asking themselves, What went wrong? They had such high hopes in January, but by December productivity and morale are down, and goals haven’t been met.
This all-too-common story is the reason many are rethinking their approach to performance management. A December 2016 survey of 244 organizations from the Institute for Corporate Productivity found that 67 percent were planning changes to their performance-management strategy.
But the issue most leaders were unsure about was exactly what adjustments they should make.
If this sounds like you, start by identifying the bad performance management habits you need to break in 2017. WIth that out of the way, you’ll find easier to build a new, improved strategy. Here are four habits to leave behind:
1. Ignoring the signs
Performance management is like a web that connects many aspects of a company’s success. When it’s ineffective, evidence will pop up in everything from employee engagement to company growth. The trick is being able to identify the signs and how they track back to poor performance management.
“High turnover and low employee engagement are two common-sense yet tell-tale signs that traditional performance-management strategies aren’t working,” Vip Sandhir, CEO and founder of HighGround, an employee engagement software provider, told me.
According to Sandhir, signs of decline in the metrics signal that employees aren’t getting enough ongoing feedback. They can’t tell if they’re meeting expectations and may become frustrated with their work.
“Stagnant growth and lagging adoption of new skills shows that employees aren’t working with their managers enough to truly meet their goals and advance in their careers,” Sandhir points out.
The takeaway? Track metrics related to these signs, so if they decline, adjustments can be made before it’s too late.
2. Setting vague goals
“In my experience, the most common mistake employers make when evaluating employee performance is failing to establish a clearly defined set of goals and key performance indicators,” says Brandon Seymour, CEO and founder of