Death of existing Performance Management System is imminent, HR better wake up before they are whipped to do so...Changing paradigm of Performance Management in dynamic business landscape...

“People in many organization are always attached to the obsolete - the things that should have worked but did not, the things that once were productive and no longer are.” ― Peter F. Drucker

To start with, performance management was created to manage (i.e. control) the work of an industrialized workforce to maximize output. Not much  thought was given to creativity and development of the individual. It’s no surprise that a process created to control the output of a workforce where large part of the work was standardized and repeatable do not work as a tool to develop a knowledge-based workforce. It’s time for us to change our lens from performance management to talent development. And I believe HR needs to lead the way. It has already started happening at some organizations where they are thinking different and going beyond the obvious. Adobe is one such example. While surveys and research findings confirm the problem, not many address the solution. Below are some practical ideas to help us re-build and revitalize our performance management  : - 

Start with the reality Check :- Ask yourself -  the time, energy and efforts invested in overall system oriented performance management process is yielding the desired organizational results?. Do some Analysis and see the co-relation with results and return on investment (ROI).

Shift perspectives :- Helping people at all levels in the organization build capability signals a shift in perspective from identifying weaknesses to capitalizing on strengths; reinforcing a cultural shift from judging and grading to coaching and development. Feedback and coaching support innovation and creativity much better than assessing and grading do. And, helps to shift responsibility for growth to the individual by empowering them to ask for feedback versus waiting for the scheduled time for it to be administered from above.

Develop multiple tools of evaluation :- Stop relying only on performance management activity; done once or twice a year, as the basis to drive all your talent-related actions. While you may only set individual goals and expectations once a year, how often to you touch base on those goals & expectations? Three months later? Six? Twelve months later? Not at all? If your annual “review process” is really only an annual event, you are missing a lot of opportunities to take employee engagement to the next level. Take a close look at what you are trying to do with performance management and un-bundle those activities

Focus on creating a Coaching Culture : – In performance management we encourage people to participate in a months-long process where the outcome is to give a grade. This does nothing to prepare them to effectively coach and develop each other. Get the folks some training. Start at the top with your leadership team since they need to model the behavior to ensure it flows downhill. Next, work your managers & team leaders into the mix. Start with small, easily digestible & implementable steps, and work your way into a more fully formed coaching system.

Development of Middle Management is a key : – We should create a culture were focus is on providing relevant feedback as and when required. Most of the managers I see have not been trained to be a manager of people. People are promoted specifically in IT / ITES industry for their individual excellence. However, when they get promoted to next level and become in-charge for the career of 6-7 people as Team Leaders, we do not train them enough on people management skills.

Changing dynamics of Feedback :- Change the notion that feedback only goes top-down. Encourage people to get and give feedback in any direction. Emphasize the idea of agility and feedback when needed. There are lots of good tools out there that can enable this. An informal but regular feedback process conducted by well-trained managers can go a long ways towards helping your employees and organization meet their goals.

Create a culture of Succession planning for key roles : – Make talent reviews and succession planning an ongoing dialogue with leaders. Follow-up on agreed actions and share insights with those being discussed, encouraging people to take an active role in the planning and execution of their development activities.


  1. Anonymous9:42:00 PM

    Dear Raj Gupta
    You have taken up a very relevant issue within the domain of HR. Traditional performance management system needs overhauling in the light of changing which have taken place in the world of work under the influence of industrial revolution and more recently globalization. Giving weightage to creativity and development of human not only crucial for achieving organizational goal but equally for individual development. The talent, abilities, skills, capacities, knowledge ,learning etc., collectively are vital for growth and development of industrial and corporate enterprises. It is, therefore, essential for all of us who are associated with HR to adapt and evolve new techniques of performance management, otherwise, as observed by you .existing performance management system may not sustain itself in contemporary world of work.

  2. Walking around the organization wearing my HR hat on, Raj you are absolutely correct that we need a paradigm shift in managing our human capital.

    Your recommended actions are good steps to start with and I believe that adding one more action with your list of activity will ensure completing the circle.

    Retention of talent: While identifying talents, providing coaching, continuous 360 degree feedback, preparing succession plan for key roles will only ensure that we all are in the right direction. The taste of success/progress only be felt or achieved when all the chosen One stays with the organization ! Thus retention of talents are key to me and HR should have an keen eye on that.

    Interestingly, the other side of the talent retention coin is attracting new talents which ironically runs parallelly and a key factor for the advancement. If we can do a good housekeeping on our own talent, we don't need to worry about the other part.

    Adopting the correct combination of right tools (reward & recognition) for each talent proved to be a better options compare to the traditional bracketing reward & recognition approach.

    I believe, to be a truly dynamic organization, it's time to bring a paradigm shift both in the way we drive our resources for result and how we reward & recognize them for delivering the result.

  3. Wow..Perfect topic which really needs importance and focus as of today. Perfect draft which can help creating a good PMS set up, i think its very important from all HR representatives to conceptually be clear what is expected out of them and whereever they work they should feel its my organization and i have to create any process which is simple, easy to understand and provides constructive results post implementation.

    Along with the above mentioned points if we can incorporate a grooming session as well, means those candidates who could not reach upto our expectation in our evaluation, we should invest time and energy on them to bring it to our level of expectation and if we do so we will mitigate risk of leaving that employee as he has understood that this organization is helping him grow.

    1 more point can be incorporated as Stay interviews - This is an important part of understanding the competencies of our existing team members, rather than coming to a point where a need of exit or retention interview comes we should make stay interview a regular and periodic discussion and this will help us build our process internally as risk of loosing some critical resources at a sudden situation with regular interaction we can mitigate that risk.

    Thanks for sharing your ideas, hope we keep on getting new learnings from you on a regular basis.


  4. Raj Gupta, your article is spot on in its characterisation of performance management as an obsolete practice. Performance management programs were adopted by companies with a vengeance, especially in the latter part of the last century, because it gave a concrete purpose to the human resources function beyond the administrative, bureaucratic and its role as part of the organisational judiciary.

    The problem that I see with the measures you recommend is that the proponents of the performance management system would argue that these are precisely the activities that their performance management programs are designed to promote. They would be able to cite the competencies incorporated into their programs for coaching; they could demonstrate connection between the progression of developing management skills and management succession; and they could proudly demonstrate how 360 degree feedback has been a feature of their program for years.

    With the ever-increasing pace of change, I believe the 'talent management/development' paradigm has also come and is almost gone. This is because the knowledge economy is shifting to be replaced by the 'values economy' in which, driven by factors including the Millennial generation entering the workforce, workers will be motivated more by their core values than their career. A key feature of the knowledge worker is that they are a highly mobile worker. The values-based worker is even more so because values-driven action promotes an entrepreneurial spirit which drives them to seek not just meaningful work, but meaningful relationships (with customers, co-workers and suppliers, as well as their employer). In other words, fortified by their beliefs, they will look for opportunities that are fulfilling in ways beyond employment (an area we dance around under the descriptor 'employee engagement').

    The challenge for organisations is to change from their paradigm of looking at what they can 'do to the worker' (i.e. develop them, motivate them, retain them, etc.) to what they must do to themselves. Workers are already taking greater ownership of their own talent development, a responsibility they assume gladly, because it provides them greater opportunity to decide which workplace is right for them. Organisations must work on their own driving values so that workers will be inspired to join them by a shared sense of purpose and meaning.

    The priority of human resources is to develop an organisational infrastructure founded on values - that includes a coaching culture, promotes meaningful feedback, strengths-based management and so on - so that people will recognise the workplace as one in which they can engage emotionally and productively.

  5. I am so pleased to read your thoughts and concur wholeheartedly.

    Change is fact of life and business. The role of Human Resources has grown exponentially in recent years. Leveraging people, values and culture transforming regulatory compliance and record keeping into authentic strategic business professionals.

    Today, more than ever, we must do away with what no longer words. Eradicate the traditional with innovation and new thought leadership. Buzz words, will remain mere words, until action brings them to life.

    Many consumer good industries have transitioned to “visual factories”. The same thought process can and should be applied to annual assessments. The “dreaded” and rearely specific or accurate annual assessment should be replaced with score cards, daily, weekly, monthly, and annual metrics providing teams with at-a-glance updates on major projects, advocating ownership and teamwork. This process should then be replaced or at minimum “enhanced” with “Career Conversations.”

    Career Conversations, are our idea, identifying the “dream job” of our employees, helping to strengthen the relationship between leader and follower, while transforming followers into future leaders based upon business needs.

    Career Conversations are “one” tool in our toolbox to encourage and inspire value based cultures, ignite careers, achieve strategic goals, while aligned individual goals with needs. Add authentic and passionate leadership, open communication, and “transparency” soon you have the ultimate dram: an engaged culture. Linking individual needs to team performance, creates overall life happiness, the results and achievements are infinite. Dreams do come true. People do have emotions. Teams are comprised of individuals. Corporate “politics” can be replaced with sincerity, genuine care when how we do, what we do, matters most.

    Yes, I could continue to elaborate all night, all day. However, we must stop reading and allow the action to begin. Perhaps I should write an engagement book, no one will publish and no one will read !

    Thanks for sharing your thoughts. I am aligned. I’d welcome the opportunity to share more thoughts. My contact information is on my LinkedIn profile.


    Loren Wyatt

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  7. Interesting Article that hits all the reasons why PM has been dead for some years. Over twenty years ago i worked with a group over 100 years old, who relying on PM had slipped from 2nd ranked to 17th in their industry and was looking at total failure. Fixing PM was at the heart of the issue, people needed to come to work each day looking forward to the contribution. No more would thy slip from "Good Morning God to Good God morning"
    We designed and introduced a simple system we call "Contribution Reviews" and within 4 ears the company was back at 2 and closing at being number 1. CR was not the only answer to this turnaround but it didi play a significant.
    The system looks only at "What contribution have you made towards our success this week? We foccused on positives and removed negatives, Negatives are only just "Room for improvement" which actually we are all in, its the biggest room in the World.
    The system relies on constant feedback and working with your fellow employees, removing internal barriers that grow up within organizations.
    Without going into a long paper on how it worked, it worked because our people saw they were appreciated when doing well and helped (coached) when and as required.

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  10. Wonderful Article! If you are you looking for some ideas to boost Employee Engagement during COVID-19? The more bonding you encourage your employees to practice, the more natural collaborative work will come. Online employee engagement activities to keep everyone connected and engaged can be a challenge.