5 Performance Management Issues and How to Overcome Them

There are a range of performance management issues that can derail progress and cost time and money. This article will examine the five most common performance management issues, and how you can overcome them.

Success or failure in business is caused more by the mental attitude than by mental capacities.

Walter Scott, Scottish historian

Performance management is a powerful tool for companies looking to boost employee engagement and productivity. But when companies fail to use it correctly, problems can arise which affect their bottom line.

Jim Harter’s article for Gallup, titled ‘Failed Performance Management: The Fix, outlines the need to transform the way we conduct performance management’ states:

“For organisations and managers, the need to shift from performance management to performance development couldn’t be more urgent. More than 90% of employees who change jobs leave their company. What employees — and particularly those in the up-and-coming millennial generation — want in a new organisation is overwhelmingly ‘career progress.’”

The article continues:

“Employees today demand more from their companies. They are asking for meaningful work and managers who care about them as people and provide ongoing communication, clear work expectations, and opportunities to learn and grow. This requires extreme alignment and harmony in how organisations develop people and hold them accountable.”

Clearly, there are challenges for business leaders who are attempting to get performance management right. 

In this article, we’ll explore five of the most common performance management issues, and the steps you can take to overcome them.

1. Poor communication

Clear communication is the lifeblood of any successful company. On the other hand, poor communication can lead to a wide range of problems.

Infographic showing effects of poor communication in the workplace on performance management, productivity, culture, leadership and costs.

Poor communication can take on many forms, including:

  • Badly-worded emails which are misunderstood and result in a lack of action
  • Poor communications systems which fail to deliver information to the right people
  • Unproductive meetings which go off-topic
  • Distracted managers and team leaders who fail to understand the problems their employees are facing

The effects of poor communication are varied. Employees can lack an understanding of expectations, leading to negativity and poor performance. Lack of trust, absence and sickness, and low morale will follow.

Relationships also begin to suffer, leading to a loss of feedback. If business leaders don’t step in to address the problem it can get out of hand.

Poor communication is one of the most common performance management issues. Fortunately, there are systems that can be put in place to prevent this from happening.

Using a multi-channel communications platform

Multi-channel communications give businesses the framework for a consistent communications strategy. Rather than focusing comms in one direction, they allow for the flow of information across platforms including emails, SMS, and in-app push notifications. 

This is crucial for companies that have adopted a hybrid work model, with remote workers and other off-site employees working with staff based in the office. With a multi-channel communications platform in place, they can:

  • Create more opportunities for dialogue
  • Implement steps to confirm messages have been read and understood
  • Reach employees wherever they’re working, including via phones if they’re on the road
  • Personalise communications to bring them in line with company culture
  • Gather data into the effectiveness of the communications strategy
  • Set priorities and alerts for urgent messages

2. Micromanagement

Micro-managers often feel like they are doing the right thing for their employees and teams. But often their input only serves to lower morale and increase employee stress. 

Some of the signs of micromanagement include:

  • A manager involves themselves in other people’s work
  • A focus on the details instead of the big picture
  • Ignoring the experiences and skills of their colleagues
  • Discouraging others from making their own decisions
  • Expecting regular reports

Micromanagement is one of the more serious performance management issues, blocking creativity and giving rise to poor performance. Micro-managers see themselves as looking out for the company’s best interests. But the end result is often the opposite.

Using performance management tools to avoid micromanagement

Performance management software features tools that can be used to reduce the impact of micro-managers on the workforce. 

Visual dashboards

One of the main problems with micro-managers is their constant need to check in on progress. With a performance management dashboard, they can monitor the progress of individuals, teams, and departments without the need to interrupt their work. 

This allows them to focus their efforts only on those employees who appear to be falling behind with their tasks. Employees who are on top of their workload can then be left to their own devices.

Scheduled check-ins

Providing a clear structure regarding where and when employees meet to discuss progress can help to reduce the interference from micro-managers. One of the major issues with micromanagement is that of constant interruptions. Regularly scheduled check-ins force them to restrict interactions to a set time and place.


3. Lack of trust

If people like you, they’ll listen to you, but if they trust you, they’ll do business with you.

Zig Ziglar, author, salesman, and motivational speaker

There are a number of studies that emphasise the link between employee trust and workplace performance. These studies have found a positive link between trust and performance, which increases in the context of dealing with remote workers. 

An article from Forbes explains how the shift towards digital communications has played a key role in how trust is preserved with ongoing feedback.

The key to performance management across a remote workforce is to enable continuous feedback to be generated and acted upon. It’s only through better quality feedback that better quality outcomes are delivered. This has always been the case, but COVID-19 has really emphasised its importance.”

Performance management tools offer the perfect opportunity to set up a broad range of processes to enhance trust. These include:

  1. A company culture which understands the importance of trust. Business leaders who model this value are more likely to develop a workforce which reflects it themselves. Performance management software can be used to embed values in an employee’s daily workflow.
  2. Employee sentiment feedback systems. Using feedback systems such as employee Net Promoter Scores (eNPS) gives business leaders a direct line to the sentiment of the workforce. These feedback systems will highlight if and when trust is dropping.
  3. Awards and recognition tools. When employees feel their work is valued their levels of trust increases. These awards should go beyond the traditional manager-to-peer awards and include peer-to-peer recognition. This ensures trust and appreciation runs throughout the company.
  4. Real-time performance feedback. Performance-related feedback needs to be proactive. When employees feel their problems are being addressed in a timely manner, they trust their leaders more. Regular conversations also help to build relationships and connect people on a personal level.

4. Not setting goals or expectations

A failure to set clear goals leads to employees who lack focus and direction. Clear goals give employees something to aim towards. Such goals help establish the expected standards and the rewards for success.

Performance management tools overcome problems associated with goals and expectations. They provide a platform to set and track a range of goals. Activities and results can all be tracked through clear metrics to make sure employees know exactly what is expected of them.

Using Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs)

OKRs and KPIs are both excellent ways to set goals and measure progress towards success. OKRs allow users to break down large tasks into easy to manage schedules. 

KPIs function in a similar way, and can be used to line up individual objectives with the company at large. When tracked through performance management software, these goals can be viewed via the dashboard feature. This keeps managers and employees up to date on tasks and deadlines so that expectations are clear.

5. Focusing on the wrong things

Many performance management issues arise because the tools are being used for the wrong tasks. Here are some of the key areas of focus that need to be considered when developing a performance management strategy.

Performance ratings

Josh Bersin outlined the problem with performance ratings in his article, ‘We Wasted Ten Years Talking About Performance Ratings’. He describes a new shift away from the old approach to ratings towards a focus on development.

“The highest-performing companies surveyed in Bersin’s new study said the goal of performance management is ‘growth and development’ – helping people perform better in their role and grow their career.”

This echoes Jim Harter’s sentiments in the Gallup article: performance management fails when it avoids focusing on opportunities to learn and grow. In this sense, performance management is better framed as “performance development”, moving away from the evaluative aspect of the process.

Emphasising annual performance appraisals

The move away from annual performance appraisals has been as consistent as they move from paper-based documentation to digital. Yet many companies are still locked in the once-a-year mindset. Instead, they should be moving towards monthly or quarterly reviews. 

Annual reviews can be inaccurate, as opinions are often skewed by their recent experience of the employee’s performance. This bias is removed when employees are reviewed regularly. As with feedback more generally, employee reviews should be part of an ongoing process if performance is to be effectively managed.