One of the hallmark signs of unquintessential leadership in an organization is the lack or misuse of performance management systems. Today’s post will talk about both scenarios and how they destroy individual performance and morale, team performance and morale, organizational performance and morale, and customer – the reason organizations are in business to begin with – trust and loyalty. 

What is a performance management system? If designed and used properly, it is the single best tool an organization has to ensure increased commitment, productivity, and success within the organization as well as increased customer trust, loyalty, and growth. Performance management systems require buy-in, continuous effort, accountability, and consequences for everyone involved in the process. 

The phases of performance management, in order, are (these are repeated each cycle as determined by the organization):

  • Performance analysis – in this phase, I always have the team member do a self-analysis and I do an analysis and then we get together and compare the results. This, to me, is the first critical step of the process, and the way I execute the step is how I partner with the team member and how I learn what I may not know or am not aware of about them. It helps us both prepare for the next phase together. Most people in leadership positions don’t do this the way I do, if they do this step at all. As a result, the performance management system becomes a one-side hammer looming over team members’ heads (because usually it’s just this step and then the evaluation with all the middle steps left out) for a year.
  • Performance planning – in this phase, again, the partnership with the team member is strengthened, because we (team member and I) agree to expectations, with accountability and consequences clearly defined for both of us, as well as continuous partnered coaching and mentoring to meet those expectations. In essence, we agree to the terms of our partnership.
  • Performance development (coaching and mentoring) – this typically is the phase that is either left out completely or done in a sporadic hit-or-miss manner because it requires a time and effort by both partners.
  • Performance review – nothing should be a surprise to anywhere in this phase, but typically, it’s the only phase organizations that use any kind of performance management system have, so more often than not, everything is a surprise. 
  • Performance improvement – this phase involves partnered goal-setting for the next performance management cycle

For a first-hand view of what this, properly done, looks like in action, please see my eBook entitled “Building Teams for Performance.”

Recently, I have been peripherally observing an organization that doesn’t have any kind of performance management system in place, and it’s obvious how this lack is affecting the organization in negative ways.

Where there are no parameters, no expectations, no accountability, and no consequences, chaos ensues. There will always be a few people who will do and go above and beyond “the right things,” regardless of whether there are controls in place or not. However, there are a lot of people who see the lack of controls as license to do – or not do – whatever they want to do.

For example, there are a few “go-to” people in this organization who are always the ones that the executive leadership team calls on when crises need attention, problems need to be solved, and issues need to be addressed. However, the “go-to” people are not actually in leadership positions per-se within the organization. Ironically, the executive leadership team is guilty of knowing there is an elephant in the room, but choosing to ignore it or go around it instead of acknowledging it and changing it.

I’ll give two examples that show why not having a performance management system in place in this organization is destroying the organization.

There is an long-term employee in a middle-leadership position who delegates all of the responsibilities of that position to team members under that position. This employee is habitually late, habitually leaves early, habitually calls out of work, cannot be found during working hours, and does not fulfill any of the requirements of her job description.

Everybody in the organization knows this, but because there’s no performance management system in place, nothing is ever done about it by the executive team and this employee knows there is no accountability and no consequences, the “situation” continues unabated.

In the meantime, the work not being done by this employee is being done by the “go-to” team members, in addition to the duties of their job descriptions, and burnout is setting in and team member morale is plummeting, which affects the overall performance and morale of the organization, which affects their customers. 

A second example on how the lack of a performance management system in this organization is hurting the organization is how shift changes work – or don’t. The organization has three shifts: 7 am to 3 pm, 3 pm to 11 pm, and 11 pm to 7 am. The first shift – 7 am to 3 pm – is the shift that does the heavy lifting in the organization. However, the other two shifts are necessary because of the service provided by the organization.

The second shift clocks in on time, but refuses to do any work as long as first-shift employees are still there. They literally sit around and steal money from the company until all the first-shift employees leave. The problem is so bad that second-shift employees will come and get first-shift employees who are still there and ask them to do work they are supposed be doing since they’re already on the clock.

Without a performance management system in place that sets expectations, accountability, and consequences, these second-shift employees, again, do whatever they want and get away with it. And the negative effect on morale and productivity on the organization and its customers is palpable.

performance quintessential leadershipThe biggest problem in all of this lies with the executive management team. They seem to lack the quintessential leadership skills to see the big-picture connect-the-dots effects of the lack of a performance management system in place and properly used on the organization and the quintessential leadership will and commitment to do something about it. 

The other scenario of a performance management system that will destroy an organization is misusing the system. No doubt everyone reading this has worked for some organization where performance management consisted of:

  • a direct supervisor demanding an impromptu meeting
  • only at the meeting were we told it was a performance review and that the deadline for turning them in was that day
  • the 10-15 minute meeting was not a discussion, but a laundry list of “stuff” we either failed, met, or rare exceeding expectations for
  • a brusque demand that we sign the review

This has as much of a harmful effect on organizations as no performance management plan being in place. Why?

There is no partnership and no development, improvement, or change built into this use. Nothing will change, except for good employees leaving and bad employees sabotaging teams and the organization at every turn, from this misuse of performance management systems.

There is also a lot of frustration associated with this kind of performance management. Frustration comes from being blind-sided on expectations, the lack of discussion and remedy within a process, and the lack of tools and coaching to develop and improve on areas that need development and improvement. 

An organization rife with people experiencing frustration will lose customers, because that frustration spills over into every customer contact and encounter. Customers who experience that will simply go elsewhere. If enough customers go elsewhere, the organization will fail.

That’s how important having and using properly a performance management system is. It should be in the top tier of attention for all organizations. Sadly, it’s not for most. 

How much attention do we, as quintessential leaders, give to having and properly using performance management systems? What will you and I do if we find we’ve neglected this as a core part of our teams and organizations? Think about it. Then do something about it.

  1. […] How the Lack or Misuse of Performance Management Systems Ultimately Causes Organizations to Fail […]


  2. Frances says:

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