Despite more and more focus on performance management and personal development many organizations still struggle to make significant improvements year over year. Are you one of those organizations or perhaps your channel seems to have grown stagnant when it comes to talent growth or performance? If so, you are not alone. Below are what I believe to be the top 6 reasons performance management systems and 360-degree feedback fails inside most organizations.

Now, before you come looking for me or put me on blast because I left out “reason X”. I will be the first to say that this list is not an all-inclusive list.  We could easily go on for another 100 reasons and fill an entire book about this topic. Indeed, there are dozens or even hundreds of books on this subject. We don’t have time for that. Let’s be impactful and discuss the most common and elusive of issues.

1. 1. Using 360 feedback or performance management for pay raises, promotions, and/or terminations.

This is most often the cardinal sin of performance management and organizations don’t even realize that they are doing it or why it’s hurting them. This reason is more than likely negating all possible impact for future development and increases in performance. The primary reason is that supervisors, peers, coworkers and even subordinates will never give you negative and honest feedback about an individual that they like or care about; if they know this feedback will affect pay raises, promotions or terminations. The entire purpose of performance management and 360 feedback is to develop talent and show improvements. You cannot create true performance improvement strategies without at least first understanding the problem at heart and the true reason for underperformance. This doesn’t happen without honest feedback.

2. Focuses on past failures and not future success.

Most often performance management systems are focused on the failures of the past instead of what needs to be done to improve moving forward. Look at the structure of your performance management system. Is the semantics heavily focused on what went wrong over what needs to be done to win? How do you expect to see improvements in the future when your entire system is focused on the failures of the past?

3. It’s top secret until the last minute.

No one knows what they are being evaluated on throughout the year. Even worse, some organizations will tell employees what metrics they are being evaluated on as part of the performance improvement or management system, then at the last-minute change the metrics. This is not only counterproductive but often frustrates employees creating resentment and damaging morale. Even if this isn’t you, go ask an employee what metrics are measured annually as part of your performance management system. If they can’t tell you easily, you need to improve communication with your teams about the system.

4. Lack of training on the performance management system.

Organizations don’t seem to fully realize the impact on the overall performance management system due to lack of training. This one seems like common sense, but it’s an issue that I see consistently. The list of issues with the lack of training are numerous, but the most common are rater bias and subjective ratings. What someone on the east coast believes to be an excellent rating, might be a needs improvement rating on the west coast. Do you see the issue? Lack of training on the system is usually the culprit.

5. Lack of developmental programs after the feedback is delivered.

Ever had an employee that needed, and was rated needs improvement, on a particular metric only to find they are still needing improvement next year when evaluation time rolls around? This is usually due to most organizations not having the training or developmental programs in place to improve the behaviors that they measure, access, or believe to be important. I know, sounds crazy, but look at the constructs your system measures and then consider what programs are in place for those that need improvement.

6. The system is too subjective and difficult to quantify.

The metrics that are measured and associated definitions for the ratings are vague and very subjective. This issue is exacerbated by number 4, the lack of training on the system. The metric of “caring for others” (yes seen it) is not only extremely subjective to the rater, qualitative, and difficult to measure, but can mean one thing to one rater and something very different to another rater. Qualitative metrics can be a good thing for performance improvement, but vague and subjective instruments should be minimized.

What makes these 6 challenges so difficult to assess is that they are so obvious. They creep into even the most well-planned performance management systems without you even realizing it, but the damage they do is enormous. They reduce employee buy-in and participation to the system and strangle any potential year over year developmental growth. What is the point of having a performance management system if it makes no impact?

What other challenges with performance management systems have you witnessed? Do you have a story to share about one of the above? Please comment below and join the conversation!!!!