How Do You Measure Performance In Management?

Marcus-Buckingham-_224149k

Marcus Buckingham, the founder of TMBC presented a commentary on what defines performance in management in his recent Harvard Business Review post ‘Trouble with the Curve? Why Microsoft is Ditching Stack Rankings’.


 

Microsoft’s announcement that it was doing away with its historic ‘stack ranking’, and even more surprisingly, it’s decision to discontinue measuring performance through ratings, prompted Buckingham to examine why? What is failing in performance management systems that would lead one of the world’s most successful corporations to do away with them.

Buckingham argues that there is widespread dissatisfaction in the motives of having a performance system, and poses the simple question, why do we implement them? Many managers would state that they exist to accelerate the performance of their people, and Buckingham agrees that this is what they should achieve, however he counters that most systems fail in this.

Examining the metrics through which performance systems are measured, he concluded that while the systems ‘allocate compensation fairly’ and ‘align each individuals goals with the values and strategies of the company’, they do little to improve the productivity of employees.

So what needs to change? Buckingham’s thoughts can be summed up in the title of his follow up article, ‘What if Performance Management Focused on Strengths?

Buckingham acknowledges that the specifics of a new performance measurement system would differ depending on the dynamics of the corporation, but puts forward ‘six characteristics, each of which follows logically from the one proceeding’ which must be included. These characteristics build a blueprint of a system, which the author argues is more strengths-based, lighter, creative and flexible, ‘ultimately more human’. He states his hopes that as companies tailor their own systems utilising these characteristics with current technologies, the old HCM system of ratings to measure performance will be on its way out.

***

Marcus Buckingham was recently ranked by Thinkers50 as one of the top 20 most influential management thinkers in the world. He is the author of the best selling book ‘Break All The Rules’, in which he highlighted the need for management to break with traditions and embrace originality and uniqueness to achieve their highest performance.