Does performance management actually work?

Question

Reading the headlines about all the companies "turning up the heat" in one way or another got me thinking... does this actually work? It appears that this method of motivating employees doesn't do much based on study after study. Curious if there are other ways companies incentivize productivity in meaningful ways or if we're all rabbits chasing carrots and getting rewarded with snack boxes and bananas.

3o2jnMOhLwr · Accepted Answer

This is a really great question and one that gets talked about a lot in leadership/culture transformation (usually when execs leave and there are voids left in management).

One thing I try to explain to my clients is human capital is exactly that, CAPITAL. How you choose to invest (or not invest) in the team they built directly impacts the bottom line. In study after study, results show that making strategic investments to strengthen the skills of employees greatly improves productivity, workplace satisfaction, and overall company health.

Put simply, if a company is trying to be cheap and not spend $30k on training and professional development that could result in 10x that amount in revenue, they probably have other issues they need to resolve (like needing to adopt a growth mindset versus one of scarcity).

One reason is that they value (and account for) humans as a cost rather than as capital.

NUjc20o3jQ · Answer

Everyone knows about SMART goals and my question is, how many people managers ACTUALLY use this framework... consistently. As in, every review cycle, there are clear goals for all parties. in my experience, it's been sporadic and the emphasis usually comes when 💩 looks like its going to hit the fan... a la recession.

TLDR: managers dont use this framework and it's fluffy buzzowrds most of the time

LKwqij7BoHe · Answer

It depends on the company culture AND if the managers are actually good. I used to work for a company that had incentives for performance that were all monetary and while some people would go for it, a lot of other people were LESS motivated by the idea and instead just focused on doing the bare minimum. It's a combination of a lot of things but it boils down to how leadership communicates and follows up.

j83nINcpqkmJBw · Answer

You usually see this in sales organizations and teams with bad performance metrics/leadership usually have high turnover and the culture is a grind. When you have a good sales performance team, objectives are clear, compensation and forecasting are strong, and even with high turnover, you have a great pipeline of reps where you can develop leaders. It boils down to communication, goal-setting, and development of your people.

Does performance management actually work?

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