The “Performance Problem”

I’ve spent the better part of 40 years helping employees and organizations perform.  Most organizations have a performance management (PM) process dedicated to this goal.  I know this process well…I’ve owned it, lived it, studied it, and tried to fix it…repeatedly.   I can say with some confidence this process is broken and I’m not alone in this conclusion.  But I think there is reason to be hopeful.

Given the state of this process, I propose we begin referring to this area as a problem, like we do other problems—the climate problem, the homelessness problem, the wealth gap, the digital divide, the consciousness problem, the last mile problem, etc.  We call these problems “wicked problems.” [1]

“A wicked problem is a social or cultural problem that’s difficult or impossible to solve—normally because of its complex and interconnected nature. Wicked problems lack clarity in both their aims and solutions and are subject to real-world constraints which hinder risk-free attempts to find a solution.”

                                                      －Wikipedia

The Performance Problem

I suggest we begin integrating all the discussion of PM and allied topics under the umbrella of “The Performance Problem.”  I think this makes sense for several reasons.

Long track record of failure.  We’ve have spent 70 years trying to fix it with little success.  Many conclude the problem isn’t solvable and we have all heard the rationalizations from business and HR leaders:

• “All PM processes have ‘warts,’  you pick your warts.”  No process will please everyone.  Every few years companies trade one set of warts for another.

• “Good medicine tastes bad.” PM tells employees what they don’t want to hear, and they won’t always like it.

• “The world isn’t fair.” PM delivers tough messages employees need to hear. It won’t always seem fair, especially to those on the losing end.

• “Not everyone can get a trophy.”  Some people come out on top, and some don’t. That’s life.

• “It’s just HR stuff.”  PM noise isn’t fatal.  Don’t over-invest in trying to fix it.

Heavy investment.  Companies spend an estimated $345B in merit and bonuses every year in the US alone, much of this determined by PM processes.[2]  It consumes  significant time from busy managers and employees.   The noise around it represents a distraction for business and HR leaders who deal these issues and have to deal with the seemingly endless PM projects designed to reduce the noise.

Significant reach.  PM is connected to everything.  In one PM design project, I captured 31 other processes and decisions linked to this process. 

High stakes.  PM affects important outcomes for every employee:  Compensation; promotion; career; status (HiPo, Successor); access to development programs; separation; and more.

Difficult to change.  There are strong forces working against change.  Traditional PM principles and practices are deeply institutionalized in organizations.  They are, by definition… legitimate.  Organizations also rely on consultants to help them redesign their processes.  They control the narrative.  Their benchmarking studies document “best practices” (frequently common practices) and they push clients toward these practices.  If everyone does it the same way, could everyone be wrong?  Big technology providers are also complicit.  Their applications are deeply embedded in organizations, and they push organizations toward configurations based on the same modal practices.  It is often difficult to customize their configurations.

 Implications

Labeling this area The Performance Problem has several advantages.  First, it recognizes what we all know, it’s broken.  This becomes a given and our starting point.  We don’t need to defend our practices and find ways to justify what we’re doing.  Second, it reframes our approach and slows us down.  It highlights the problem is a symptom of deeper issues that need to be examined.  This shifts the focus from searching for solutions and quick fixes to understanding the nature of the problem better. In the words of Chris Argyris, it forces us out of single-loop thinking and into double-loop thinking, questioning our assumptions, beliefs, and ideologies. [3]

Finally, it forces us to collaborate, bringing all stakeholders together, understanding their different views, positions, needs, and values and creating a shared mindset around the nature of the problem.

But this is not an easy task.  Leaders don’t want talk, especially about theory, principles, mindsets, paradigms, and ideologies, they want action.  They want to jump to solutions.  But we’ve seen what happens when we do.  We have endless, debates and arguments about tactics because we haven’t agreed on principles.  And leaders don’t like to have their assumptions and beliefs questioned.  Their experience got them to where they are today and they trust their judgement.  It isn’t easy for them even entertain alternative mental models and mindsets, let alone to abandon principles formed based on years of their hard-earned experience.

You may decide solving the Performance Problem isn’t for you or your organization.  That’s fine, after all it isn’t fatal.  This problem is like a “pebble in your shoe;”  you can function pretty well, but it is annoying and distracting.  I think organizations have enough distractions.  And, in the hyper-competitive and complex world in which today’s organizations exist, maybe the organization with the fewest distractions wins. 

Alternatively, you may decide you simply want the noise to go away by reducing the burden…making it “suck less.”  This is fine and legitimate.  However, stakeholders need to have realistic expectations about the value of a project like this.  I have been a part of many of them.  In 2 or 3 years, you will likely be back at the table again, facing a redesigned PM process that is still making employees and managers crazy.  The noise doesn’t stop for long.

Conclusion

I think this is a problem worth solving, and we now have the now have the perspective, information, insights and models to do it.   It’s available in a new book:   “Performance Enablement:  A New Model for Driving Organizational Performance. [4]  This book brings together the best thinking, the best science, the best organization design frameworks, and the best practices to solve The Performance Problem.

 I believe there will be a real advantage for organizations willing to take on this problem.  It will give them the value proposition to win in the talent marketplace and the business marketplace.

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End Notes

[1] Rittel, H. W. J., & Webber, M. M. (1973). Dilemmas in the general theory of planning. Policy Sciences, 4, 155–169.

[2] Shaw, J. D., & Mitra, A. (2017). The science of pay-for-performance systems: Six facts that all managers should know. WorldatWork Journal, Q3, 19-27.

[3] Argyris, C., & Schon, D. A. (1974). Theory in practice: Increasing professional effectiveness. Jossey-Bass. 

[4] Goldberg, E., & Colquitt, A. L. (2026).  Performance enablement:  A new model for driving organizational performance.  Oxford University Press.