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The Biggest Mistake CEOs Make Managing Performance

I’m sure you will have experienced systems in your career where the review system has not been clear, where the system has been open to high levels of subjectivity. This lack of clarity of performance criteria results in team members believing that the system is unfair, ambiguous, subjective, and therefore invalid.

Under these circumstances they tend to accept the positive feedback and deny that the negative feedback is valid. It’s very difficult to get change in performance and behaviours when the performance review system is considered to be unsound.

Such a system also opens up the possibility of different team members believing their team leader or manager has treated them differently. It gives rise to comments about favouritism or victimisation. Such views and feelings often result in lower productivity, lower motivation, less team cohesion. This is the exact opposite of what a performance review system is designed to do!

In addition, when team leaders or managers expect such a disengaged or negative response from their team members, they neither feel positive nor confident about completing performance reviews with their teams.

Many of them will verbalise their skepticism about the performance review system, many will talk about how time-consuming it is. Many will question its value with their own team members. So it’s not surprising that their team members often don’t see it as adding any value or substance. Too often, team leaders and managers see performance reviews as a ‘necessary evil’.

Nobody is winning under these circumstances.

Is it possible to devise a performance review system that is fair and clear for both managers and for their team members? The answer is ‘yes’. The answer is also that it will require time and energy to set up a robust, fair and clear system.

And, yes, it will be worth it. We willingly, and rightly, spend much time and often a significant sum of money checking that our equipment is working optimally. And we don’t hesitate to spend additional time and money to action our findings in order to gain increased efficiency. It’s strange, then, that we often find it difficult to allocate time to devise a system that will check the performance of our people asset so that we can also optimise this.

The key driver for a fair, clear, user-friendly, relevant performance review system is to start by agreeing what ‘really matters’ in the business. And to then agree on how to measure this.

To your success,