Effective performance management is without a doubt extremely important. Through a series of informal or formal evaluation processes, the performance of each individual employee is measured, and using the data collected, the appropriate action can then be taken. This ensures that the goals of the organization and that of its employees are aligned in a singular direction.

When properly implemented and executed, performance management systems can transform organizations into ultra-competitive, lean, mean fighting machines. For example, General Electric’s CEO Jack Welch managed to revolutionize GE by directing the efforts of more than 200,000 employees towards a singular goal; to be the best that they can be.

On the other hand, ineffective performance management systems can end up being more trouble than they are actually worth. At best, such an organization is only able to perform adequately in a competitive market, and at worst, it becomes unable to cope with constantly evolving challenges in the marketplace.

In this article, we examine some of the reasons why even the most well-planned management initiatives go awry. Here are 5 reasons why an over-reliance on hard data or performance metrics exclusively can lead to disaster.

Numbers don’t tell the whole story in Performance Management

As quoted by Mark Twain, “Facts are stubborn but statistics are much more pliable”. Although antiquated, this quote highlights a common problem inherent in many performance management systems. Instead of being treated as a means to an end, the data collected is instead being used as the end-all and the be-all.

For example, you realize that the number of calls processed by your customer service department has dropped significantly over a period of several months. As a manager, your first impression would be that your team is spending time slacking off on Facebook rather than working. However, a cursory check with your team reveals that a newly released product has many customers calling in with enquiries which has resulted in each call taking longer than usual.

The above situation highlights why organizations should not be wholly reliant on raw data collection as metrics alone are not indicative of the larger problem. Instead, data collected should be used as the basis for further investigation i.e. realizing that a problem exists and looking into solving it using other methods.

Failing to update your metrics

Problems change and evolve with time and so do your employees. A performance metric that was able to address dropping work turnaround times may not be as relevant a year later, after all, has been said and done. The fluid nature of today’s competitive economy means that HR professionals and organizations need to be on the ball so as to not become complacent.

In order to remain up-to-date, performance audits should be conducted annually or even bi-annually. These checks allow the organization to identify and eliminate potentially outdated benchmarks that are no longer relevant and replace them with more effective performance metrics.

A word of warning though, sudden changes to your performance metrics can result in data collected previously becoming obsolete while interrupting any data collection efforts that you may already have in place.

Metrics hamper employee growth and cause dissatisfaction

In a world of big data where we rely upon numbers to tell a story, organizations, and HR professionals are at risk of becoming over-reliant on hard data and metrics alone. Data collection has sterilized performance management which means that managers and leaders are not able to make nuanced judgments on their own.

Such a totally objective form of management means that more subjective factors like EQ, soft skills, and employee attitude are not taken into account when determining an employee’s performance. For example, an employee with a toxic attitude who consistently rates well on paper will be allowed to continue unhindered without any corrective action being taken.

In the long-term, this perpetuates a negative work culture which will no doubt cause an increase in employee turnover and a drop in productivity which will not be identified should an organization rely solely upon metrics.

Too many metrics

Ever heard of the proverb “Too many cooks spoil the broth?” i.e. a situation where too many people are involved in a task will most likely result in unsatisfactory results. The same could be said of performance metrics where including too many of them will result in less-than-stellar results.

While it is okay to be thorough in your performance management efforts, it is not recommended that you include every conceivable measurable factor in your analysis. This is because such extensive data collection is a tedious and time-consuming affair which results in little-to-no useful data being collected.

Secondly and rather ironically, such an approach can also serve to affect your actual work performance as most of your time is spent collating and processing data. Instead, HR professionals should start with smaller more easily-managed chunks of data before moving on so as to keep the workload manageable and to ensure that the data collected pays off in dividends.

The fact that employee engagement is more of an art than a science highlights the clear need for an effective HR management solution. Hence, this is where IQDynamics comes into the picture, with our highly customizable software which offers a wide range of flexible solutions, you can rest assured that your HR management rests in our very capable hands.

If you would like to enquire about our Integrated and Comprehensive HRMS and Talent Management System, contact us here.