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Stephen  Bevan

Performance Management – HR Thoroughbred or Beast of Burden?

Authors: Stephen Bevan Director of the centre for workforce effectiveness

08 December 2014

Today at the Work Foundation we co-hosted (with Prospect) an important event looking at the contemporary role of HR. We had a great line-up of speakers, including Lord Monks, Peter Cheese (CIPD), Duncan Gallie (Oxford University), Kay Eldergill HR Director Met Office, Paul Hucknall HR Director Lloyds Banking Group, Richard Heron Vice-President Health & Chief Medical Officer BP and Prof Rosalind Searle, Coventry University.

The event posed a number of questions about whether HR should be the custodian of organisational conscience, what ‘good work’ looks like (and how we can generate more), the current state of ‘trust’ in modern organisations and whether performance management processes are ‘fit for purpose’.

It was the performance management question which has occupied me recently. I first published research on this in 1991 – funded by the then Institute of Personnel Management (IPM) – the predecessor of the CIPD. Back then we found that performance management was often no more than a poorly administered and unpopular annual appraisal with a somewhat random (and often discriminatory) link to a performance bonus for those who did best, or those best at ‘gaming’ the system. It was an HR-owned and administered set of paper-based procedures which many line managers resented and which probably did little to drive performance improvement.

In a paper which I produced for the event with Prospect, I examine whether performance management is executed with any greater sophistication or professionalism today and what role the HR function needs to play to make sure it can have a genuine and sustained impact on performance.

One of the challenges getting attention at the moment is the used of ‘forced distribution’ in performance ratings – the practice of specifying what proportion of the workforce can get the highest – and the lowest -performance rating. Aside from the equal opportunities challenges of performance ratings which this throws up, I think there may be real questions about some of the very tough approaches to performance management being practiced in some organisations today might run counter to the rhetoric of employee engagement and wellbeing which is simultaneously being espoused in the same organisations. I discuss the challenges (or folly?) of forced distribution systems here.

Another challenge is that performance management remains, in many organisations, a set of procedures which still alienates line managers. It is not often ‘owned’ by line managers in the sense that they accept it as an integral part of the way they manage their people. In addition, performance management can also be seen as a vehicle for the delivery of several processes – objective-setting, performance review, performance-related pay, identification of training and development needs and careers advice. The danger is that, in trying to deliver all of these processes, performance management only manages to under-deliver on all of them. To this extent, a big challenge for HR is to prevent performance management from becoming a ‘beast of burden’ by clarifying its purpose and streamlining its bureaucracy. Only in this way can performance management deliver as a ‘thoroughbred’ performer itself.