Talent Management: How Not to do Performance Management

This post is inspired by a post (Microsoft Was Destroyed By Its ‘Stack Review’ Process, According To New Vanity Fair Expose – Business Insider) in Business Insider about an upcoming article by Vanity Fair Magazine Where part of Microsoft’s business success has been detrimentally affected by its performance management (PM) process.

This PM process is one where there is forced ranking of people within a workgroup/team. Always there will be people who are ranked as unworthy of any rewards and they may even be deemed worthy of dismissal.

Such a system is intentionally meant to prune the lowest contributors thereby enabling renewal and team performance improvement through bringing new higher caliber talent.

In reality, these kinds of systems foster politicization and colleague against colleague type competition. The reason this can be detrimental to business success is it focuses people’s attention not on the outside business competitors but internally on being at least better than the lowest performers in the group.

In terms of my values regarding talent management, which includes promoting business systems that promote business excellence, such PM systems are “evil”.

I argue that PM should install competition to beat personal and business standards, goals, quality metrics, etc. rather than personally succeeding by making another colleague a loser. I argue that my stance helps bring the best out in people. The “stacking” PM type systems do not.

I suggest that any business executive who hears from their HR PM officer (or associated consultants) that the stacking type PM approach is worthy of adopting in your organization should one of the following:

  • Dismiss this PM system advocate from your office and suggest they are dangerous to the health of the company.
  • Dismiss the individual from the organization as they are too dangerous because they may convince someone else in the organization to try their ideas out.

My disdain and revulsion for such PM systems is shared by people like Edwards Deming (quality/continuous improvement management fame). Also, anyone who has had basic grounding in behavioural psychology understands the danger of competing against each other in the pursuit of organizational performance improvement.

PM systems that promote interpersonal conflict (that is what intra-team competition is) in the name of being suitable for business are shameful in their claim.

Postscript: there are organizational settings where this type of PM system would be appropriate – e.g., organizations where the environment is one of combative win-lose. But even here, if strong teamwork is an advantage these PM systems can be detrimental.


About 123stilllearning456

As a management consultant I am passionately interested in talent management and risk/uncertainty issues. In the area of talent management I propose that we seek strategies that look beyond the staffing/employee centric frames of reference. I have been frustrated at the "closing down on possibilities" by these more conventional staffing/employee centric approaches. I have been impressed where people have found systematic solutions to their talent management issues by going beyond the conventional approaches. In the area of risk and uncertainty, I am interested in making this topic relevant to more normal decision making situations. My conceptual foundation is to use the micro-economist's fixed/variable cost theme. I also think it is important to look at these issues for people through their emotional and psychological lens. As a premise I think risk and uncertainty only exist where there is a person who cares about possible events and its consequences. Hence, risk and uncertainty are social based concepts (no sentience, no risk and uncertainty). A major influence on my thinking in this area is Nassim Taleb of "Black Swan" fame. This BLOG provides me with an opportunity to express my thoughts on topics that interest me. As this is an online diary, content is more important to me than polish. I apologize if this distracts from readers' enjoyment and learning. Still I find this a useful way to live up to my namesake, learn more from others and hopefully provoke creative thoughts and ideas in others.
This entry was posted in Decison Making, Performance Management, Strategy, Talent Manangement. Bookmark the permalink.

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