The Ugly Truth About Performance Management

Talent Management the Way You Never Looked At

“98% of CHROs believe their Performance Management System doesn’t work.” - Gallup 2024

When I said HR is insane, I wasn’t kidding, was I? They say the definition of insanity is doing the same thing over and over and expecting different results. Case in point! 😅

First off, performance isn’t some kind of religion where belief matters. It’s not about beliefs—it’s about facts. Either we know our performance management systems work, or we don’t.

Second, if 98% of people agree the system doesn’t work, why aren’t we seeing more action to replace it? What’s the plan, folks? Or are we just clinging to broken systems for old times' sake?

Finally, why are we subjecting employees to the absurd rituals of performance management if we already believe the system doesn’t work? I’ll tell you why. Here is something you probably never thought about or looked at performance management this way.

Companies that care about quality output hire top-notch talent—what I like to call high performers. They don’t mess around when it comes to hiring because they know that’s where performance management starts. Or to put it another way, they take performance management so seriously that it starts with how they hire. And once you're in, they performance-manage the cr*p out of everyone. Why? Because they’re laser-focused on delivering top-quality products or services.

Think about companies like Netflix, Google, or GE. Their performance management isn’t for the weak or average. They track everything, measure everything, and if you’re not cutting it, they’re not afraid to show you the door. That’s how you build a high-performance culture. It’s baked right into their performance management systems—not the old-school, once-a-year appraisals, but the everyday management of performance as part of the actual work.

For this to work, they know they need amazing managers and leaders who are great at managing people and their performance. And their training and development programs? They don’t waste time with fluffy, generic stuff. They focus on building the skills that actually drive high performance.

They understand that performance management is not about weeding out low performers but developing the performance of the already highly performing employees. They’re all about pushing their already high-performing people to the next level. That’s the real secret to staying at the top.

On the flip side, average and low-talent companies don’t really manage performance—they just measure it once a year during the good old annual appraisal, and that’s about it.

And honestly, why would they? Or even better, how could they? Average talent managing other average talent isn’t exactly a recipe for success. Let’s be real: managing average talent isn’t exciting, and even if you try, the results are usually mediocre at best. So, why bother throwing millions at it?

Instead, they stick to the usual routine: a symbolic annual appraisal, maybe throw in some quarterly check-ins for show and generic development programs that don’t actually teach managers or leaders anything let alone how to manage performance. Their main focus? Weeding out the really bad ones. And that’s where it ends.

Companies aren’t clueless—they know exactly what they’re doing. They’re not going to waste millions on fancy performance management systems when they’re dealing with average talent. Why would they?

Take the hotel industry, for example. It’s a perfect case of what I’m talking about. The talent is mostly low to average, and everything else matches that—processes, systems, leadership, management, training programs, you name it. It’s all low to average quality because that’s what makes sense for the talent they have.

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