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10 Ways to Undermine Performance Management

Posted by Yana McConaty

Enterprise Performance Management (EPM) is an umbrella term used to describe the methodologies, metrics, processes, and systems that help enterprise companies monitor and manage their business’s performance.

Executives seeking deeper insights into business trends and potentially ambiguous opportunities utilize Performance Management. Sub-components of EPM include: Enterprise Planning, Performance Monitoring & Measurement, and Enterprise-Wide Reporting. 

Benefits definitely outweigh the challenges in deploying an EPM capability. These benefits include:undermine-performance-management

  • Enterprise-wide visibility
  • Strategic “red-zone” monitoring
  • Improved resource planning and allocation
  • Agile decision-making
  • Predictions for future performance
  • Delivery of a broad spectrum of critical business data (Note: this data is generated through monitoring, analyzing, and controlling organizational performance.)

Failing to properly manage or dedicate your company to continuous improvement of your performance management capability can lead to undesirable outcomes. Organizations must be aware of common ways that performance management initiatives can be undermined, causing business performance to stall or decline, instead of thrive.

Here are 10 ways you could be undermining performance management and suggestions on ways to avoid these pitfalls:

  1. Don’t invest the time needed to define good performance metricsYou should invest the time towards developing SMART (Specific, Measurable, Attainable, Realistic, and Timely) metrics. This step is crucial when implementing a sound performance management capability.
  2. Neglect performance data quality Many organizations lack understanding or appreciation of the fact that performance data is “data” that needs to be properly managed and reviewed regularly. Performance data stewardship requires informed management and oversight for modeling, preparing, maintaining standards, verifying quality, and communicating guidelines.
  3. Don’t link metrics to strategic goals and financial performance outcomes - Organizations should consider implementing a performance management framework that links financial and operational metrics. This framework should help companies allocate resources to specific goals based on the appropriate metrics. It should also increase your visibility into how financial decisions will translate into results. 
  4. Manage too many metrics - Creating and managing too many metrics dilutes focus and confuses efforts. People will become less efficient and effective. Focus on what really matters most. Track which metrics will truly impact your business decisions.
  5. Fail to get organizational buy-in - Performance management requires buy-in from leadership, executive support, and your internal stakeholders. You need enterprise-wide collaboration and commitment to succeed. Without these supporters, resentment will develop when performance management is imposed sans input and approval.  
  6. Don’t demand accountabilityPeople will not change their ways unless they are held accountable to their performance metrics. Every leader must become a performance manager for the areas they are held responsible. 
  7. Use metrics to punish, not empowerInstead of viewing increased insights provided by data and metrics as a way of controlling and disciplining staff, managers will be better served by using the metrics as a way of coaching and resolving performance issues. Managers who view metrics as a way to control rather than coach their staff may potentially harm employee morale and increase productivity issues.
  8. Fixate on metrics, not actions - Organizations must focus on actions that will generate long-term results, not short-term performance improvement spikes. You must address the core issues, mitigate known risks, and improve company processes to create and foster a culture that responds positively to tracking.
  9. Don’t automate performance management processesFailure to bring the necessary automation into Excel-based or poorly automated data management and reporting processes can lead to productivity losses, data errors, and decision delays. You also may struggle with decreased collaboration and increased communication barriers. A lack of analytical insight will hurt the company. A comprehensive Performance Management Software can help companies work more effectively and efficiently to achieve strategic objectives.  
  10. Give up improvementContinuous improvement is necessary for applying learned best practices and for adapting to changing environments. Ignoring lessons learned can stall your progress and hinder the efficacy of your performance management initiatives.


Topics: software solutions, Performance-based Budgeting, performance management, methodology, reporting, metrics


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