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Avoiding the Top 10 Mistakes in Performance Management

7 min read
most common mistakes in performance management and tips

Did you know that only 2 in 10 employees say their performance is managed in a way that motivates them to do outstanding work?

Human resources play a critical role in effective performance management. However, despite the best intentions, it’s easy for managers to trip over common roadblocks that make it harder to manage effectively.

In this article, we’ll explore the most common mistakes made across the employee performance management cycle and offer practical advice on how to avoid them.

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1) Unclear Goals and Expectations

Clear goals and expectations are the foundation of effective performance management. But mishandling the goal-setting process can leave team members demotivated, frustrated, disengaged, and unclear on what they should achieve. It can also lead to misunderstandings and conflicts between managers and employees.

So, what can be done to avoid this from happening? First, HR managers must ensure that goals and expectations are SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. This helps team members understand exactly what they need to do, by when, and to what standard.
Another way to avoid this mistake when managing employee performance is to involve team members in goal setting. When your team is involved in their own goal setting, they are more likely to be invested in achieving them. They will also better understand what is expected of them, which can help prevent any confusion in the workplace.

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2) Inconsistent Feedback and Communication

According to an international employee survey, 72% of respondents rated “managers providing constructive feedback” as important for their career development.

Often, transparent communication is lacking meaning employees don’t know where they stand, what they’re doing well, or what they need to improve. As a result, they may feel unmotivated and uncertain about their future with the company.

Effectively managing your team can be achieved by including these principles in your performance management strategy:

Encourage Communication Across Your Team

Establish a culture of open communication and encourage managers to provide regular feedback to team members, both positive and constructive. It also means giving team members a platform to provide feedback to their managers so that everyone is on the same page.

Offer Relevant Training Across Senior Management

Organisations can consider training managers and providing them with resources on effective communication and feedback techniques. This could be through workshops, coaching, and even performance management tools to facilitate communication.

Consistently Monitoring Progress

Once everything is set in motion, you can monitor progress and hold managers accountable for providing consistent feedback. Organisations can do this through employee performance appraisals, performance management software, and other communication effectiveness metrics or tools.

3) Lack of Employee Involvement

Employees not involved in regular performance discussions can lead to a lack of ownership, disengagement, and poor performance. According to a study by Gallup, companies with high employee engagement levels are 21% more productive than those with low engagement levels. So, what can be done to effectively involve team members in the employee performance management process?

Here are the steps you can take in your performance management strategy to involve your team members:

Communicate employee performance management goals and objectives

This will help team members understand how their performance contributes to the organisation’s success and clarify what is expected of them.

Give team members a say in performance targets

Involve them in the planning stage so they can identify any roadblocks early on and align their goals with the organisation’s goals, creating a sense of ownership and commitment to achieving them.

Involve your Team in the Feedback Process

When evaluating performance, involving employees in feedback can help them feel valued and motivated. By giving employees timely and constructive feedback in their performance reviews, they can understand what they’re doing well and what’s needed for improving performance.

Strive for a Continuous Performance Management Cycle

Establish a continuous performance management process that involves ongoing communication and support. Regular check-ins with employees can build trust, foster a culture of collaboration, and help identify areas where they need additional support or resources to perform at their best.

most common mistakes in performance management and tips

4) Overemphasis on the End Result

When managing performance, the end result is of course what you’re striving for. But when organisations become too fixated on this, they are more likely to overlook other crucial aspects of performance management that can affect the outcome.

If your performance appraisals only measure a team member’s performance based on their final sales numbers, you might not consider the effort and skills they put into achieving those numbers. You might also overlook any challenges or obstacles they faced, which could affect their overall job satisfaction and motivation.

Moreover, when you overemphasise the end result, you might encourage short-term thinking and behaviour, prioritising the end result over the quality of their work, the relationships your team builds with their colleagues or even their well-being. This can create a toxic work environment and ultimately harm the organisation’s long-term success.

While the end result is undoubtedly important, it shouldn’t be the only thing organisations focus on in performance management. Here are three simple decisions you can take to build an effective performance management strategy:

  1. Evaluate the end result, the process, and the behaviours that lead to it when defining your performance appraisal.
  2. Set clear expectations for both the outcome and the behaviour you expect from your team’s individual performance. 
  3. Encourage team members to take risks, experiment, and learn from their mistakes instead of just aiming for the end result.

5) Failure to Address Employee Performance Issues

A common mistake in performance management is failing to address performance issues promptly. When organisations don’t address performance issues, they may indirectly signal to team members that they’re not concerned with their success. It may also allow poor performance to continue unchecked, leading to a demotivated and disengaged workforce, ultimately causing absenteeism and turnover.

This is what organisations can do to avoid this from happening and create reasonable performance expectations:

  1. Regular employee performance reviews. These can help identify issues before they become significant problems. It can involve providing additional training and coaching to help the employee improve their performance, or it may require disciplinary action if there are continuous performance issues.
  2. Involve the employee in the performance management process. Managers and employees can work together to develop an improvement plan. This approach can lead to motivated and engaged employees, as they feel their input and ideas are valued.

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6) Ignoring Employee Development

Many organisations see the performance management process as a way to monitor and discuss the performance of team members rather than an opportunity to help them develop and grow. But in doing so, they are missing a critical component of continuous performance management that benefits not only employees but also the organisation.

According to LinkedIn’s Learning Report, 94% of employees report they would stay at a company longer if it invested in their career development. Professional development and training opportunities help employees feel valued, engaged, and motivated to go above and beyond throughout their career progression. Ignoring employee development can lead to employees feeling undervalued and unmotivated, resulting in high turnover rates, low productivity, and decreased morale, all of which can harm the business results.

Team members given opportunities to learn and grow are more likely to feel satisfied with their jobs, less likely to seek employment elsewhere, and more likely to contribute to the organisation’s success.

Here are a few tips to make for an effective performance management strategy:

  1. Make personal development a part of your organisation’s culture, fostering a culture of learning.
  2. Invest in training and development programmes tailored to employees’ unique needs and interests, whether it’s courses to eliminate implicit bias or training employees for coaching skills.
  3. Set your performance standards as you measure and track the impact of training and development opportunities on employee engagement, retention, and performance.

7) Using a One-Size-Fits-All Approach

While having some structure is important, it’s crucial to understand that every team member is unique. They have different skill sets, personalities, and motivators. So why treat them all the same?

Doing so might make team members feel their contributions aren’t valued, or their managers don’t understand them. As a result, they might disengage, become unproductive, or even leave the company altogether.

Tailor your performance management strategies to each individual. Doing so will boost employee performance as it shows you value and appreciate their unique strengths and contributions.

This doesn’t mean throwing structure out the window but rather taking a more personalised approach. Try to:

  • Ask employees about their own goals and aspirations, and embark on performance planning that align with them.
  • Adjust your feedback style to match each team member’s communication preferences.
  • Provide different types of recognition and rewarding good performance based on what each employee finds meaningful.

8) Focusing Solely on the Negative

According to Glassdoor’s Employee Appreciation survey, 53% of people said that feeling more appreciation from their boss would help them stay longer at their company.

Focusing solely on the negative creates a culture of fear and anxiety. Team members start to feel like they’re constantly walking on eggshells, never sure when they will receive criticism or negative feedback.

Moreover, when you only focus on the negative, you miss the opportunity to reinforce positive behaviours and build upon an employee’s strengths. This creates lopsided performance management processes that can hinder growth and development.

That being said, addressing areas for improvement and providing constructive, timely feedback are important aspects of an effective performance management plan. However, these should be met with recognition and positive feedback acknowledging an employee’s hard work and progress. Managers should:

  1. Make it a priority to recognise and appreciate your employees regularly. This can be as simple as saying “thank you” through frequent check ins, or publicly acknowledging a job well done.
  2. Focus on strengths as much as weaknesses. Help your employees identify their areas of expertise and find ways to build upon them.
  3. Make feedback a two-way street. Encourage your employees to share their thoughts and ideas on improving, and be open to their suggestions on how you can better support them.

most common mistakes in performance management and tips

9) Using Performance Metrics Incorrectly

When you use metrics incorrectly, you end up with data that doesn’t give you an accurate picture of your team’s performance. Perhaps the metrics are too general, too specific, or too easy to manipulate.

To avoid these pitfalls, here are some simple tips to follow when you measure performance:

  1. Confirm that the data you’re collecting from the performance evaluation is accurate and reliable in relation to your key performance indicators (KPIs), and use it to make informed decisions that align with your company goals.
  2. Check that everyone on your team understands how the metrics are being used and how they can improve for the next performance appraisal.
  3. Be willing to adjust your metrics over time. As your teams improve performance and your company’s strategic objectives change, the metrics you use should also evolve.

10) Not Adjusting Strategies Over Time

There are many reasons why organisations fail to adjust their strategies. Sometimes, it’s a matter of complacency – if things seem to be working, why change them? Other times, it’s a lack of awareness or resistance to change.

The consequences of failing to adjust performance management strategies can be severe. Over time, changes in the company objectives, business environment, employee needs, expectations and other factors can make even the best strategies obsolete. If organisations don’t adjust their strategies, they risk falling behind their competitors, losing top talent, and failing to achieve their strategic goals.

Performance management is a continuous process, so be aware of the need for flexibility and adaptability in performance management. Accept feedback from your team and other stakeholders, and experiment with new approaches and strategies.

Adjusting performance management strategies may require effort and investment, but the payoff can be significant. By staying flexible and adapting to changing conditions, organisations can stay ahead of the curve, retain top performers, and ultimately achieve greater success.

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Sergio is a seasoned copy and content writer who has worked directly with company founders, CMOs, brand executives, and marketing directors from multiple industries. He's an HR geek and humble terpsichorean.

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