As we kickoff 2023 and put a fine point to our New Year’s resolutions and finalize our professional annual objectives, we are proposing a goal for all of us to consider—let’s do away with performance goals altogether.
The practice of performance goal setting has been rightly under critical fire for some time—and deservedly so. In short, here’s where the critics often find consensus:
- It’s seemingly (but not really) data driven and objective. Numerical ratings feel like science, but they are influenced by a range of cognitive biases (e.g., confirmation bias, recency effect, negativity bias, etc.).
- While the practice may make distributing bonus awards easier, it does not actually motivate employees.
- Though performance ratings offer a legally defensible way of letting people go, they are riddled with subjectivity. Think grade inflation, the same phenomenon applies to assessing employee performance.
- People generally dislike the practice, but they also crave the clarity goals seem to offer and they covet the affirmation that come with good reviews.
Here are three alternatives to traditional practices that can help in weaning one’s organization away from setting annual goals:
- Emphasize purpose over goals.
One challenge with setting goals, whether it be annually or quarterly, is employees become myopically focused on delivering that goal. This may seem sound in practice, but the reality is that business environments are rapidly changing and hypercomplex. Conditions and dependencies routinely change, leaving most goals less relevant, and often obsolete. In an earlier era of industrial work this was not the case and companies could set widget subcomponent manufacturing targets with confidence. The reality is that we are no longer working in static conditions where we can reliably predict the inputs needed to reach a larger enterprise goal. That said, most companies continue to cling to the outdated industrial-age goal setting model that does not prove useful in today’s complex world.
Rather than setting formal annual goals, ensure managers informally calibrate weekly with their direct reports. Sadly, we must also acknowledge that this is an ambitious task as expectation setting and coaching conversations is a difficult, but critically important, endeavor. This ability has steadily eroded as we continue to introduce performance management systems and digital communication platforms that falsely advertise the promise of making leading easier. In addition, these systems sometimes allow us to avoid the positive or difficult conversations. When this happens, we risk undermining the relationship with this employee. In turn, this can lead to other longer-term consequences like the failure to build trust, increased impediments to sharing ideas and spikes in unnecessary flight risk.
- Routinely pull employees together to do improvisational work on cross-functional problems.
Imagine if we were asked to a record symphony with the caveat that all instruments would be recorded individually and then assembled later. Though it might be challenging, it would be feasible because symphonies are composed and the elements can be consistently and reliability assembled into a greater coherent whole. The challenge with business is that it more closely resembles improvisational jazz than it does a set classical piece of music. And if we asked someone to build an improvisational jazz piece with the same constraints, it would be impossible. Improvisation is continuously interdependent; isolating instruments from each other would render the whole endeavor pointless. Trumpeters would be left guessing what the pianist might be doing, the pianist would be left guessing what the saxophonist was doing, and so on.
Most organizations think they do a decent job of this for a variety of reasons: they set up cross-functional project teams; they create open workspaces for cross-functional collaboration, or they implement a ‘walk-a-mile’ program where employees can experience a week in the life of another department. These efforts tend to be superficial and make boards feel better about a firm’s ability to collaborate. The reality is that improvisational work is just that—improvisational, or said differently, spontaneous. Find ways to not only bolster opportunities for individuals to work cross-functionally, but also facilitate the building of deeper cross-functional relationships that endure beyond mandatory formal events. There are several ways to do this: (1) hire individuals with deep experience working cross-functionally, (2) move talent across functions and (3) celebrate improvisation whenever it happens, and not just fixate on the outcome.
- Pull people back in the present and spare them the torture of obsessing over the future.
The increasingly complex and everchanging workplace is a reflection of what has been happening nationally where focus is outward on what others do and on the lives we aspire to live. Whether we call it fear of missing out, the curse of comparing ourselves to others, or an insistence of projecting glossy versions of our lives on social media, it is clear we have lost touch with being present with ourselves. Though we don’t have an answer to this existential conundrum, we do argue that performance goals compound and exacerbate this problem. When setting a goal, we fixate on what we are missing and articulating exactly what will make us whole—at least from a performance perspective. In this endeavor, we discredit the present moment, and how we are performing right now, as it is relegated as simply a means to a greater end…and simply a subcomponent of something we continually chase with unfulfilled longing. Further, by directing our attention to an aspirational future, we also lose sight of the only thing we do have—doing meaningful work in the present moment.
It is also important to clarify what working with presence is not. This is not some type of new age practice where employees whimsically do what strikes them. Rather, this is about continuously keeping employees abreast of what matters and how they can make their work impactful. Talent leaders can help employees find meaningful endeavors in their daily, weekly and quarterly contributions. Like boxers who enter the ring with a strategy, our employees must be able to dynamically adjust to their opponent. This also requires tight and frequent communication between the manager and their teams.
Performance goals offer the illusion of control, but there is no way to ensure predictability, stability and certainty. The only thing traditional performance management seems to ensure is frustration for employees and companies alike. Rather than perpetuate this frustration, let’s part with the practice of setting annual goals and instead focus on ways to facilitate improvisational communication and center our attention on helping employees be present in doing purposeful work daily. Though ambitious, the goal of going goalless may lead to improvisational productivity.