HR Perspective with Memory Nguwi
MOST organisations say performance matters, but the truth appears when you ask how performance is managed. You often find vague goals, weak measures, late performance contracts, reviews that happen once a year and ratings that cannot be supported by evidence. The organisation may have forms, an online system and a policy, yet have no performance management system. What it has is an administrative exercise that creates scores without improving results.
We have encountered this problem in different forms across many organisations. Senior leaders talk about accountability, and boards ask management why results are poor, but nobody can show a clear line from the strategy to the chief executive’s goals, executive scorecards, departmental priorities and individual employee expectations. People are busy, reports are being produced and meetings fill the calendar, but the work is not connected enough to what the organisation must achieve. Activity is mistaken for performance.
One of the hardest situations is where the system exists mainly to reassure the board. Human Resources presents completion statistics showing that nearly everyone submitted a performance contract and received a rating, so the process appears successful. When you examine the contracts, however, we find goals such as “improve customer service,” “monitor costs” or “ensure effective leadership,” with no clear result, baseline, target, deadline or required evidence. The forms are complete, but management still cannot tell whether the organisation is performing.
The trouble often starts at the top. Some boards demand performance from management without agreeing on their own performance, and some chief executives begin the year without a properly approved performance contract. Executives then create disconnected priorities, departments write whatever measures they can easily report, and employees receive goals that bear little relationship to the strategy. A weak start at the top cannot produce strong accountability further down the organisation, regardless of how sophisticated the appraisal form looks.
Poor goal setting is one of the weakest links we repeatedly find. Performance contracts are crowded with activities such as conducting meetings, preparing reports, coordinating programmes or attending workshops, even though completing those activities does not prove that anything improved. A manager can conduct four customer-service training sessions while customer complaints continue to rise. Good performance management therefore distinguishes between an activity, the immediate output and the business outcome the work was intended to produce.
The annual review then exposes every weakness that management ignored during the year. Managers and employees argue about what was expected, whether targets changed, which evidence should count and why one person received a higher rating than another. Moderation meetings become bargaining sessions where strong personalities, hierarchy and internal politics can carry more weight than facts. Employees quickly learn that the final score depends less on contribution than on who presents the case and who has influence in the room.
This damages the organisation far beyond Human Resources. Poor performers remain in place because expectations were never clear and managers avoided difficult conversations, while strong performers become frustrated when exceptional contribution attracts the same rating or reward as average work. Leaders discover problems too late to correct them, resources continue flowing to failing priorities, and the board receives false assurance from impressive-looking scores. The organisation pays salaries throughout the year without knowing whether effort is advancing the strategy.
When we help a client repair this situation, we do not begin with a new form. We begin with leadership commitment and the organisation’s strategic choices, because performance cannot be managed if leaders have not agreed on the results that matter. The board must agree on how its own performance will be assessed and approve a clear performance contract for the chief executive. Executives must then translate strategic priorities into a small number of measurable organisational outcomes with clear ownership.
From there, we build a balanced scorecard that gives management a complete view of performance. Financial results remain important, but they usually tell leaders what has already happened, so they must be supported by customer, internal process, and learning and growth measures. We select both leading indicators that provide early warning and lagging indicators that confirm final results. The purpose is not to fill a dashboard; it is to test whether the organisation’s strategy is working and allow intervention while there is still time.
Every key performance indicator must then be properly defined. The formula, data source, baseline, target, deadline, weight, reporting frequency and required evidence should be clear enough for two independent people to reach the same conclusion. The responsible employee must have reasonable influence over the result, and management must examine whether the measure could encourage harmful behaviour, such as increasing sales while margins, collections or customer service collapse. Critical safety, ethical, regulatory or financial measures may also require minimum thresholds that cannot be canceled out by good scores on minor activities.
The organisational scorecard is then cascaded according to contribution, not copied mechanically. If profitable growth is the goal, Sales may own revenue, conversion and pipeline quality; Operations may own availability and delivery; Finance may own margin protection and collections; and Human Resources may own the timely placement and development of critical talent. These measures remain connected, but each executive has identifiable responsibility. Managers and employees are trained to write proper goals, understand the scoring rules, and agree on evidence before the performance period begins.
Regular review is where the system starts becoming a management tool rather than a Human Resources ceremony. We normally encourage formal quarterly reviews, supported by more frequent operational monitoring where the nature of the measure requires it. Each review should establish what was achieved, examine the evidence, diagnose the cause of any gap, agree on corrective action and identify the support required. By year-end, the final assessment should consolidate discussions already held, not surprise an employee with concerns that management failed to raise for twelve months.
Evidence must remain the anchor of both ratings and moderation. Managers should not award a score because an employee worked hard, is well liked or produced a persuasive explanation; they should show what was agreed, what was delivered and how the result was verified. Moderation should test consistency and evidence, not secretly alter ratings to fit a preferred distribution or protect particular people. When judgement is required, it must be disciplined by definitions, behavioural anchors, records and independent review.
A credible system must also lead to action. Strong performance should influence recognition, development, succession, promotion and, where appropriate, reward, while weak performance should trigger diagnosis, support, closer monitoring and corrective action. Capability gaps may require training, coaching or reassignment, but persistent failure or refusal to perform after reasonable support may require formal consequences under policy and employment law. Employees lose faith when good and poor performance produce the same outcome.
The real solution is not another template, a new rating scale or a more expensive software platform. It is a management discipline that creates clear priorities, visible accountability, regular problem-solving and defensible decisions about contribution. In our client work, the turning point comes when leaders stop treating performance management as a year-end scoring event and start using it to run the organisation throughout the year. That is when performance management moves from paperwork to execution, and from arguments about ratings to serious conversations about results.
l Nguwi is the managing consultant of Industrial Psychology Consultants and a registered occupational psychologist.