6 Common Performance Management Mistakes to Avoid

1. Don’t Drive the Car by Staring at the Dashboard: You cannot keep your car on the road if you continuously stare at the dashboard. Look out of the wind shield, check the rear view mirror, pay attention to road conditions, tra?c patterns, and aggressive drivers, as well as the dashboard. Similarly pilots seldom ?y by staring at the instrument panel. They utilize its visual input, but also rely on their intuition, feel, conditions, and other inputs. Get out of the o?ce. Talk to colleagues, customers, and suppliers. Combine this input with your intuition.
2. Don’t Measure Everything: You should develop a framework that focuses attention on important value and performance drivers. Failure to do so will result in selecting too many measures and some may not be consistent with priorities and important performance drivers.
3. Don’t Measure Only What Is Easy and Available: There is a tendency to select KPIs and build dashboards based on the information that is readily available. While it may be challenging to measure things like Net Promoter Score, innovation or human capital, their importance to success justi?es attempts at measuring and evaluation. Even if the measures are imperfect, they will focus attention and provide insights into critical areas.
4. Don’t Replace Judgment or Intuition: Sometimes you may resist performance management initiatives because you might argue that PM is an attempt to replace or limit your judgment and intuition. While analysis and performance management can signi?cantly improve decision making and management, many important decisions must incorporate your experience and judgment. PM can facilitate and bring full information, leading to better decisions.
5. Don’t Measure Too Frequently: New information availability may encourage you to “take the pulse” of the business and key activities too often. This will lead to frustration and may also result in decisions or actions based on small sample size, cycles, or minor alarms.
6. Don’t Make It a Finance or Information Technology Project: Many projects fail because they are driven exclusively by the Finance or IT function. In order to be successful, PM must be driven from the top and integrated into the fabric of the management systems. Functions such as Finance and IT are critical in the development, implementation, and support of PM, but all stakeholders must buy into and support it to be successful. Many organizations look to a software as the silver bullet in measuring and improving performance. While a software can be an important element, it is equally important to develop context, select measures, train, and integrate with other management processes.

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