If any of the following sound like your performance management system, you aren’t improving performance. You may think you are, but you aren’t.

1. Employees are crushed if they aren’t “Truly Outstanding” or at least “Exceptional.”

In an era where “all the children are above average,” especially in companies with outstanding employees, how do you accomplish anything by putting people in boxes that do nothing but confirm their preconceptions or shatter their illusions? And why do you want to put managers in a position where those are their choices?

2. The main take away is a rating and a salary change.

We aren’t in high school, anymore. (Though even students lose when the report card becomes more important than the learning.) How can a rating or a raise improve performance? What do labels tell employees about what they need to continue doing or do differently?

When the point becomes a rating and a raise, the result is simply a mix of employees who are:

• Happy with their bigger paychecks
• Angry and feeling under appreciated
• Waiting for the hatchet

Which group do you really think will do even better because of their performance review?

3. Review criteria are so general that mixed messages are unavoidable.

I’ve seen many reviews where the competencies and responsibilities used to rate employees are ridiculously broad. As a result, reviewers deliver mixed messages. They can’t flag anything as “needs improvement” since no one needs improvement on the whole kit and caboodle. Take “communication skills” as an example. Someone may be very articulate and write well, but may neglect to disseminate important information or come across as dismissive. As a result, the rating for the category ends up with the equivalent of  “Meets Expectations,” if not higher, and the written feedback might include several positive comments along with a vague suggestion about trying not to upset people. Zero clarity there! And a serious mixed message on a very important subject!

4. The best employees lose.

Your best employees can be even better with a little guidance, feedback, and additional experiences and responsibilities. But these are the ones who gain the least from the review process. Their reviews are the fast and easy ones for the manager. They get a bunch of high marks, general comments about how wonderful they are, and, if they are lucky, a few vague suggestions about how they  might do better. Unfortunately, these suggestions are usually too vague to be useful and the high marks make them quite irrelevant anyway. Meanwhile, no time is spent looking for the additional opportunities that would help this employee leap to the next level.

5. The paperwork gets more attention than the people.

Companies, especially HR departments, are often too intent on documenting failures, paving the way to termination, and avoiding law suits. As a result, they are obsessed with consistent and complete documentation. Their managers spend more time putting expectations in writing, saving evidence of short-comings, writing up improvement plans, and holding periodic progress meetings  than they do trying to help the employee succeed or understand that another position would offer a greater shot at success. Everyone has lost the point of performance management!

6. Problem employees never go away.

Even super rigorous systems provide no guarantee that managers will identify and remove problem employees. That’s why it is especially sad that problem employees are often what drive companies to create onerous and ineffective performance management systems. The most important consideration in hiring and retaining any employee is a good fit between employee and the demands of the position. Everyone loses when the wrong employee remains on the job.

7. Your best people don’t stick around.

A performance management system can reduce attrition by helping employees know where they stand, grow professionally, and find new challenges. That’s not all top talent desires, but it is a great start!

8. Managers hate the whole process and are often late in performing reviews.

Managers often hate the process for several good reasons. Most systems are onerous, punitive, and ineffective for all the reasons mentioned above. If your managers hate the process, something has got to give. And it is probably the system itself that needs to change.

Do any of those ring a bell?

Everyone has strengths and everyone has weaknesses. If you want employees to improve, you need to build on their strengths and improve their weaknesses or render those weaknesses less necessary. That requires:

• Identifying employee strengths and opportunities for improvement
• Providing clear, specific feedback so employees know what they should do more, less, and differently to have a greater impact on the business
• Getting rid of the meaningless labels and ratings that distract from the purpose and create tiresome bureaucracy
• Finding opportunities to expand employee skills, perspectives, and experiences
• Making employment a partnership where both employer and employee see the importance of finding a great match between people and responsibilities

The goal is to ensure employees are in the right job for their passions and capabilities and then to help them excel and learn. Most performance management systems miss the boat and encourage punitive and tangential activities. Managers have limited time. You need to be sure that time is spent on positive activities that actually help employees improve.