The Missing Half of Performance Management
Most organisations know how to monitor performance. Far fewer know how to manage the emotional conditions that determine whether performance improves. Targets, dashboards and action plans matter, but they only tell half the story.
"These traffic lights seem very slow to change."
The Chair is looking directly at the Chief Executive. It is the quarterly performance review meeting. Around the table everyone is focused on the dashboard. Too many red lights. The question hanging in the air is whether these are new problems or the same old ones.
Senior managers have anticipated the questions. They are ready with their answers. Not excuses. Answers.
The discussion quickly settles on the familiar explanation. Key vacancies have delayed implementation of the action plans.
"We've struggled to recruit. The market is competitive. There is a shortage of experienced candidates."
The Chair is unconvinced.
"That's what we heard three months ago. Why can't we recruit and retain talented people?"
Every head turns towards HR.
The HR Director has all the figures. Staff turnover. Vacancy rates. Benchmarking data. Recruitment campaigns. Salary comparisons.
Instead she says, "Would this be a good time to refer to the employee survey?"
At that moment the meeting changes. The conversation is no longer about performance management. It is about something the performance dashboard cannot see.
Most organisations have become very good at monitoring performance. They measure everything. Targets. Milestones. Waiting times. Productivity. Customer satisfaction. Budget variance. They produce sophisticated dashboards and colour-coded reports. Red. Amber. Green.
None of this improves performance.
It tells you what is happening. It rarely explains why.
Monitoring performance is not the same as managing performance. Drawing up an action plan is not the same as delivering one. If the answer were simply better targets and tighter monitoring, every red light would eventually turn green.
They don't.
The reason is that every organisation contains two organisations.
There is the formal organisation. It creates strategies, structures, budgets, policies, performance measures and action plans.
Then there is the emotional organisation. It runs on trust, hope, pride and memory. It is where employees decide whether leaders are credible, whether change is worth the effort and whether promises are likely to be kept.
The formal organisation decides what should happen.
The emotional organisation determines whether it does.
Take recruitment. The formal organisation sees vacancies and responds with recruitment campaigns, revised job descriptions and more competitive salaries.
The emotional organisation asks different questions.
Would you recommend this organisation to someone you respect?
Do you believe the promises made to new recruits?
If you had your time again, would you join?
Those answers determine whether talented people apply, whether they accept the job and whether they stay long enough to make a difference.
Exactly the same is true of performance improvement. When ambitious targets are announced, employees make an emotional judgement before they make a practical one.
Do I trust the people asking this of me?
Is this another initiative that will quietly disappear?
Will extra effort be recognised or simply rewarded with even more work?
Have I heard all this before?
That last question is more important than many leaders realise because organisations have long memories.
Employees remember the restructuring that was supposed to simplify decision-making but created more bureaucracy. They remember the technology that promised to reduce workloads but generated more administration. They remember the consultation where everyone was invited to have their say before the decision that had already been made was announced.
Every disappointment undermines the next improvement programme. Every broken promise weakens trust. Every abandoned initiative chips away at hope. Every failure to recognise extra effort damages pride.
By the time the next action plan arrives, employees are not responding to today's proposal. They are responding to the accumulated emotional evidence of everything that came before it.
This is why some organisations never seem able to shift the red lights. The formal organisation keeps refining the action plan. The emotional organisation has stopped believing the plan will make any difference.
Board meetings often ask the wrong questions. Why has this target been missed? Why has this milestone slipped? Who is accountable?
Important questions, but incomplete ones.
The more revealing questions are these.
Do managers still have credibility?
Do employees believe this improvement programme is different?
Are people still proud enough of where they work to give discretionary effort?
Has the organisation accumulated so much disappointment that another action plan simply reinforces cynicism?
These questions rarely appear on a performance dashboard, yet they often determine whether the dashboard changes.
Performance management is often presented as a technical discipline. Measure. Monitor. Review. Escalate. Repeat.
That is only half the job.
The formal organisation explains performance through targets, milestones and action plans.
The emotional organisation asks different questions. Do people trust us? Do they believe us? Are they still hopeful? Are they still proud to work here?
Perhaps the Chair asked the wrong question at the start of the meeting.
The traffic lights were not slow to change.
They were accurately reporting an organisation that had stopped believing change was possible.
Until organisations investigate the emotional organisation with the same rigour they investigate the performance dashboard, they will continue to monitor performance far better than they manage it.
blairmcpherson.co.uk
