Executive summary

Research findings

A review of management research and literature yielded the following conclusions about performance management and development.

Traditional performance management (PM) systems are ineffective and fundamentally flawed. This is because:

• There is little evidence that traditional PM systems drive performance improvement

• Rating systems express more about the reviewer than the person being reviewed due to personality bias

• Self-assessment are positively biased

• Forced rating systems lead to competition, isolationism and low self esteem

• Traditional PM systems are based on a normal distribution – the reality is more like a Pareto (80% return from 20% of talent)

• PM is backward-looking and out of synch with delivery cycles

• The process is unpopular with both managers and employees

• The process takes a huge amount of time

• Coupling compensation and performance development is ineffective at driving performance improvement

Successful new approaches are based on:

• High frequency ‘touchpoints/check-ins’ that focus on expectations, priorities and purpose

• Continuous feedback and coaching

• Objective and frequent data

• Forward-looking discussions

• Action-orientated rating mechanisms, conducted by the direct line manager

Feedback should be categorised by both outcomes and quality. How this feedback is gathered and from whom changes as a result of the classification.

Technology is enabling ‘crowdsourced’ feedback apps that:

• Are easy to use

• Provide real-time information

• Build up a rich picture using multiple data points

The potential risks associated with feedback apps include:

• Volume overload

• Gaming – especially if PM drives individual compensation

• Feedback credibility

Meaning, Mastery and Autonomy are core drivers of motivation and fulfilment.

PM systems should take account of career development and wellbeing