The Dark Side Of Performance Management - Continued
The previous post triggered me to post something on the dark side of performance management. Something I should have been doing weeks ago, since we started this thread with Frank Buytendijk on his weblog.
The previous post suggests what we think is the right way to approach performance management: linking overall goals to what employees can understand and control, and rewarding them accordingly. However, as Frank so eloquently introduced, behavior may very well be influenced by performance management systems, but too often the behavior invoked is not in the best interest of the organization. We thought it might be interesting to make a small inventory of some of the flaws in performance management today.
We've all heard the stories about top executives earning huge bonuses. I'm not sure about other countries, but in The Netherlands this always leads to a lot of discussion in the media. Apparently, when bonuses are big enough, people will try whatever they can to earn their bonus. One of the problems I encountered with bonuses is that they often drive performance at the department or individual level, but tend to overlook performance of the organization as a whole. From my own experience in consulting I have seen this lead to situations where a project would be staffed with people from one group, where it might be better to use consultants from another group. Apparently, in this case the performance management system promotes high productivity instead of co-operation. It would however be in the best interest of the consulting firm to promote having the most qualified team, in order to serve the client the best way possible.
Please let us know your experience with the dark side of performance management. I'm passing this thread over to Tom Hudock, who commented on our previous post on his BI for Business People blog. Let's find out what dark side he has experienced. I hope it's not as bad as with Luke Skywalker...