3 Fallacies of Employee Performance Measurement

Posted January 08 2014

PerformanceYahoo’s announcement that CEO Marissa Mayer is implementing a forced ranking system has once again ignited the debate about evaluating employee performance: do performance management systems do more harm than good? After all these years, why can't organizations get performance management right? To get to the heart of the problem, you must look to the intent.

In an ideal world, performance management systems are an organization’s way to get a handle on the individual contributions of its workforce. And, as the maxim goes, “what gets measured gets done.” So, it seems reasonable to find a way to measure employee output. It's a problem when the intent is flawed. A recent article from People-Equation talks about the three mindsets to avoid.

  • All measurement is good. Focus on measuring only 'worthy' things.
  • Statistically, there is such a thing as an “average” worker. Instead of viewing workers as part of a statistical construct, view them as individuals.
  • Linking pay to performance increases productivity. Whenever possible, separate the discussion of rewards and performance.

Measuring employee performance is a good thing; it helps employees understand how they are contributing to the company mission. But when measurement is guided by fallacious thinking, performance management systems become unwieldy tools prone to demoralize rather than encourage improved performance.

Here is another instance where competency assessments can be used to tackle performance management challenges. These assessments aid organizations and their employees measure key competencies and behaviors (i.e., 'worthy' things).  These competencies and behaviors can be linked to both organizational and individual goals.  This means workers are individuals, not just another number.

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