Performance Mismanagement Systems: I

Performance management systems generally have a bad reputation. Sadly, it's a reputation well deserved. Although performance appraisal is often painful for both appraisers and the people whose performance is appraised, that isn't at the heart of the problems with performance management systems. Performance management systems are so poorly suited to their stated objectives that we really must call them performance mismanagement systems.

Their flaws are many. In the next installment of this exploration, I examine some unintended consequences of these systems. In this Part I, I examine four of the foundational assumptions that seem most at odds with the goal of helping organizations and their people reach their potential.

The fallacy of composition

A logical argument is based on a fallacy known as the fallacy of composition when it assumes that if a statement is true about a part of the whole, then the statement is true about the whole. For example, we commit the fallacy of composition when we conclude that a bicycle is made of rubber because one of the tires is made of rubber.

A fundamental premise of many performance management systems is the idea that when we elevate the performance of every individual in the organization, then we have done much to elevate the performance of the entire organization. Because maximum performance does require resources, and because resources are finite, maximizing the personal performance of each person in the enterprise doesn't necessarily maximize enterprise performance. One can easily imagine situations in which optimum enterprise performance requires that some activities be curtailed so that we can undertake others with greater energy.

The reification error

We commit a reification error when we treat an abstract concept as if it were a real thing. For example, performance is not a thing. A person's performance cannot be measured in any way analogous to measuring a person's weight or height. Thus, assigning a grade to someone's performance is inherently subjective; making it seem objective doesn't make performance a real thing.

The data generated by performance management systems is not a set of performance measurements. Rather, it is a set of performance appraisals. When we accept as a goal of a performance management system elevating performance appraisal of every employee, we might be inviting those performers to take steps that actually degrade organizational performance. To avoid educating the more devious amongst us, I leave to the reader's imagination — or recollection — the question of how some people might elevate their appraisals, as opposed to elevating their performance.

The myth of identifiable contributions

The myth of The myth of identifiable contributions is
the belief that we can accurately assess
someone's performance on the basis of
contributions because any and all
contributions an employee
makes are identifiableidentifiable contributions is the belief that we can accurately assess someone's performance on the basis of contributions because any and all contributions an employee makes are identifiable. That is, we assume that when we ask people to generate lists of their contributions to the organizational mission, they can do so in relatively short order. Or we can ask them to keep personal journals listing their contributions. And when the supervisor then scans these lists, the supervisor recalls and can confirm that the entries in the lists are complete and accurate.

While people can certainly generate such lists, well-known cognitive biases limit their value. As I recently discussed, the Availability Heuristic provides one limit. But another limit is even more important — our inability to predict the future. The value of some contributions might not become clear until far into the future, when developments not yet conceived finally become available. And inversely, what seems now to be a positive contribution might be proven at some time in the future to be misdirection or waste or worse. And some contributions are never recognized as contributions. For example, we rarely regard as a "contribution" the sometimes-courageous act of asking a question that reveals an inherent flaw in a concept and which then leads to cancellation of a product development effort that would have ultimately failed. Asking such questions can prevent the waste of significant resources, and help the organization avoid serious embarrassment or even bankruptcy.

The myth of omniscient supervision

It is commonly assumed that supervisors are fully aware of the activities of the people they supervise, that they are qualified to assess the value of those contributions, and that they could actually perform the work of those people. Essentially, it is assumed that relative to the work of the people supervised, supervisors are omniscient.

In the modern workplace, especially the knowledge-oriented workplace, these assumptions are usually invalid. Consequently, many supervisors are unable to objectively appraise the quality of the work of everyone they supervise. To perform these appraisals, they rely on claims and assertions of the supervisee, and on extrinsic indicators such as comments from the leaders of teams to which the supervisee has been detailed, the opinions of the peers of the supervisee, the timeliness of delivery of work products, and the social standing of the supervisee. This approach renders the supervisor's appraisal vulnerable to tactics some employees use to project an image of capability and productivity that is at odds with the reality. The appraisal is also vulnerable to malicious tactics employed by third parties, including rivals, who provide comments about the supervisee's activities.

In Part II of this exploration we'll examine the effects of quota systems for assessing employee performance.   Next issue in this series   Top    Next Issue

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