How To Fix Your Broken Performance Management System

Akshit Dangi
Published on 
April 28, 2023

Let’s get real for a moment—implementing a performance management system in your organization for the first time can be pretty hard. But what’s arguably harder is seeing the system that you’ve implemented not bring the expected results.

If that’s the case for you, chances are that some part of your performance management system is broken and needs repair. 

Managing your performance is a crucial responsibility of every manager—we’re all aware of that. But, a broken system can make the job significantly more difficult by decreasing productivity, lowering morale, and potentially increasing turnover rates.

Of course, just like everything else in life, a performance management system can be easily fixed with a bit of proactiveness and taking some key steps. Keeping that in mind, here is a detailed guide on how you can easily fix a broken performance management system:

Identifying a broken performance management system

Before we get started with fixing your organization’s performance management system, we need to identify the root of the problem. These are signs, both big and small, that indicate that some aspect of your performance management system is not working as well as it should. 

1. Your team complains a lot 

If employees are frequently complaining about the performance management system, it may be a sign that it is broken. Common complaints may include a lack of clarity around expectations, inconsistent feedback, or a feeling that the system is unfair.

2. Your turnover rate is way too high

High turnover rates can be a sign that employees are not satisfied with the performance management system. If employees feel that they are not being evaluated fairly or that their efforts are not being recognized, they may become disengaged and seek employment elsewhere.

3. Your people are not improving

If the performance management system is not leading to improvements in employee performance, it may be a sign that it is ineffective. The system should be designed to help employees improve their skills and knowledge, and if it is not achieving this objective, it’s a clear sign that things are not going as well as they should.

4. The evaluations are inconsistent and biased 

If evaluations are inconsistent or biased, it may be a sign that the performance management system is broken. Evaluations should be objective and based on measurable criteria, and if this is not the case, the system may need to be revised.

5. Your people are disengaged

If employees are not engaged in the performance management process, it may be a sign that the system is ineffective. Employees should be actively involved in setting goals, receiving feedback, and evaluating their performance. If they are consistently disengaged, then your performance management system may not be working as intended.

6. There’s a lack of alignment with business goals

If the performance management system is not aligned with the organization's business goals, it may be a sign that it is broken. The system should be designed to help employees work towards achieving the organization's objectives, but if your goals are misaligned and consistently not being achieved realistically, things need to change.

Reasons why you need to re-engineer your performance management system

Now that you’re done identifying the problems, we can start working on fixing your performance management system. But wait! Before we jump straight into the rabbit hole, allow us a moment to clear all doubts about why you need to re-engineer and fix your performance management system. While you really do not need a massive reason to fix your performance management system, considering how you should naturally do it, there are some specific reasons to be mindful of to further your resolve for fixing the system:

  1. Goals misalignment: If individual goals are not tied to organizational goals, it could lead to demotivation and disengagement among the workforce.
  2. Biased ratings: Humans are biased by nature, and hence, the ratings that they give to their colleagues can be biased and unreliable.
  3. Lack of communication: Most managers cannot help their employees understand how their work impacts the business as a whole, leading to a communication gap.
  4. Compliance over development: The performance management process is often heavily led by HR and is more compliance-driven than proactive people development initiatives by managers.
  5. Wrong priorities: Many performance management systems focus on automating the appraisal form rather than using technology to help employees improve their performance. A technology-based system to aid development can be more efficient and effective.
  6. Lack of ongoing feedback: Annual, quarterly, or monthly feedback is only retrospective in nature and does nothing to improve performance in real time.
  7. Outdated grading system: Grading by the curve or forced ranking of employees can limit recognizing of the top performers and fails to motivate middle-of-the-road employees.
  8. Difficulty in assessing employee potential: Traditional performance management systems only focus on past performance, making it difficult to assess employees’ potential for future roles.

Steps to fixing your performance management system

1. Identify the problem

The first step in fixing a broken performance management system is to identify the problem. Managers should thoroughly review the current system to determine what is working and what is not. This may involve gathering employee feedback, analyzing performance data, and reviewing the current policies and procedures.

2. Set clear objectives

Once the problem has been identified, managers should set clear objectives for what they want to achieve with the performance management system. These objectives should be SMART (specific, measurable, achievable, relevant, and time-bound) to ensure that they are achievable and effective.

3. Communicate expectations

To ensure that employees understand what is expected of them, managers should communicate expectations clearly and frequently. This may involve providing regular feedback, setting clear performance goals, and providing training and development opportunities to help employees achieve their objectives.

4. Provide regular feedback

Regular feedback is essential to the success of any performance management system. Managers should provide feedback to their employees frequently and constructively, focusing on areas for improvement and recognizing successes.

5. Use performance metrics

Managers should use performance metrics to evaluate employees' performance objectively. This may involve using key performance indicators (KPIs) or other metrics to measure productivity, quality, and other critical aspects of job performance.

6. Focus on employee development

Managers should focus on employee development to help them reach their full potential. This may involve providing training and development opportunities, coaching, and mentoring to help employees improve their skills and knowledge.

7. Encourage collaboration

Collaboration is essential to the success of any organization, and performance management is no exception. Managers should encourage collaboration between employees, teams, and departments to ensure everyone is working toward the same objectives.

8. Evaluate and adjust

Finally, managers should regularly evaluate the performance management system to ensure it achieves the desired results. This may involve reviewing performance data, gathering employee feedback, and adjusting policies and procedures as necessary to ensure the system remains effective.

Creating high-performers requires a reliable performance management tool

There’s no denying that a robust performance management tool, that enables companies to consistently monitor and improve employee performance, can play a pivotal role in taking your teams’ performances to the next level.

By identifying areas of improvement, providing regular feedback, and facilitating employee development, managers can foster a culture of accountability that enhances engagement and productivity. If you’re looking for a performance management tool that can help facilitate all this, a quick 1:1 demo can get you started.

At the end of the day, implementing an effective performance management system may seem daunting, but the benefits are well worth the effort. Organizations that prioritize employee development and performance significantly improve productivity and overall success.

Always remember that a performance management system is not a one-time fix but an ongoing process that requires continuous monitoring and improvement. By staying committed to this process, you can help your people reach their full potential and contribute to the organization's success.

Nothing more gratifying than that, now is there?

About Author

Akshit is a valued contributor to our guides, with a passion for sharing insights and expertise from top leaders in the art of creating high performance. As an author, Akshit is dedicated to fostering a deeper understanding of performance management principles, offering readers the guidance needed to navigate today's ever-evolving business landscape.
Akshit Dangi
Content Marketer

The Feedback Revolution: A Guide To Continuous Feedback At Work

Read more

7 Performance Appraisal Tools to Streamline Your Appraisal Process

Read more

How To Implement a 360-degree Feedback System?

Read more

Like what you see?

Consider joining our email community of 7,000+ HR professionals!
Be the first to hear about our educational content sprinkled with a little bit of entertainment. We NEVER pitch slap, and we DON’T spam.