Performance measurement and management systems have proliferated over the past two decades. Executives in both the private and public sectors have relied on performance metrics for strategic planning, and decision-making to drive bottom line results. Yet recent research reveals that leaders are making some fundamental mistakes, and are subject to myths regarding performance management.
So argues Pietro Micheli, Professor of Organizational Performance at he Warwick Business School, based on his recent research. He argues that the myths and mistakes “often encourage exactly the behaviors their organizations neither need or want.” Here’s a brief summary of myths that Micheli identifies:
Micheli concludes his research by contending “Rather than spending months designing the perfect system that can produce objective, accurate and precise data, efforts should be put in communicating to all employees the reasons and benefits of such systems, and connecting strategy, measurement and decision-making.” And more importantly, rather than assuming that a tight set of measures, targets and rewards will lead to alignment, motivation and improvement, “managers should empower people at different hierarchical levels, build flexibility in these system and use them for learning, rather than control purposes.”