Saba® People Management Blog

13 August, 2008
Can Performance Management
Systems Hide High-Potential?
Author: A.G. Lambert

I was listening to a series of business podcasts driving home from Tahoe this weekend, and a couple got me thinking about the challenges of measuring performance. The first was Jack and Suzy Welch’s Business Week Podcast call “High Performers Won’t Wait”

Jack counsels that you shouldn’t hesitate to promote high-performers, but that first they must show performance and values. No surprise there. What got me thinking was his comment that performance has to be measured not just by the numbers and goal accomplishment, but by the employee’s ability to surprise and exceed expectations and contribute in unanticipated ways. If a company is too focused on implementing performance management by measuring and rewarding according to a strict set of goals, how will it find the unexpected contributions? Where will the organization be able to measure an employee’s ability to make others succeed and contribute to the team?

The second was an interview with A. G. Lafley, Chairman and CEO, Procter & Gamble, talking about the company’s innovation strategy, and his new book, “The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation.”

He talked about their structured process to review innovations, with an emphasis on aligning innovation to business strategy, as well as their two-to-three hour structured meetings to review innovation strategy with business units--where each innovation is summarized down to a poster that is placed on the wall and reviewed by the team. Their process sounds great, but what about the other 8,757 or 8,758 hours in the year? What about the employees who aren’t in the innovation reviews? How do you align their ideas to business strategy and ensure their innovations can be summarized in something as simple as a poster? And how do you find the high-potential employees ready to contribute to the next big innovation?

Both of these examples point to the need and potential benefit of managing the informal contributions and knowledge of employees across the enterprise. Organizations need communities of practice and social networks that allow employees to contribute knowledge, volunteer to mentor, and be rated for their contributions. The same performance review that considers the accomplishment of specific goals and objectives should also evaluate--in a structured way--an employee’s contribution to the community. Innovative ideas should have a way to be easily published, vetted, commented-on, and evaluated by peers to uncover new ideas and new leaders that can lead to future corporate success.

Without capturing and managing the informal processes that are at the heart of learning, performance, and community, performance management systems risk being a trap that rewards the structured and steady, but overlooks the helpful and innovative.

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Comment from Maksim Ovsyannikov on August 18, 2008
This is extremely refreshing. Basically, contributions in "unanticipated ways" leads to innovation. Granted that not every such contribution will be truly innovative, I absolutely agree that it should be first and foremost encouraged and then ultimately rewarded. Does this mean that "unanticipated goals" should become part of our performance plans?