HBR IdeaCast It’s Time to Fine-Tune Performance Management
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Sep 20, 2022 Heidi Gardner, a distinguished fellow at Harvard Law School and co-author of an insightful HBR article, argues that traditional performance management systems undermine collaboration. She introduces a four-part scorecard to align individual and organizational goals while enhancing accountability. Gardner emphasizes the importance of qualitative assessments over numeric ratings to foster employee motivation. The conversation also delves into the benefits of a customer-centric approach in performance management, showcasing how shifting away from rigid metrics can lead to stronger client relationships and team engagement.
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Misaligned Incentives
- Individual performance metrics can misalign incentives.
- Focusing on narrow metrics like revenue can lead to unsustainable practices and poor customer service.
Reverse-Engineer Goals
- Start with organizational goals, like customer satisfaction, and reverse-engineer individual goals.
- Encourage "smart collaboration" by bringing together the right people and departments.
Client Perceptions
- Clients can often detect when firms implement new compensation systems based on changes in employee behavior, such as aggressive cross-selling.
- This perception cheapens the relationship and makes clients feel like a source of revenue.