Performance Management v Career Development

I listened in to a HR seminar given by Mike McDermott from HumanR yesterday and it answered a very fundamental question for me: what should drive learning and development in a knowledge sector organisation, performance management or career development?

Mike described how performance management up until the turn of the century was based on the following paradigm:

PM = ability * motivation

With the advent of performance management tools over the last decade, alignment started to play a more significant role:

PM = alignment * (ability * motivation * opportunity)

According to Mike, this process is based on work that can be planned with expectations set, where performance can be monitored and abilities developed, performance rated, ratings summarised and top performance rewarded.  This approach is based on scientific management ideas from the likes of Fred Taylor from the turn of the last century, ideas designed for largely uneducated factory workers.

Automating this process made it more administratively efficient, a record was kept, there was legal compliance and it drove compensation within organisations.  Unintended consequences however included the process becoming too formulaic, it became a numbers game, inhibiting meaningful conversations, reducing the voice of the employee and growing the gap between managers and employees with a greater emphasis on external motivators and where the PM process is seen as a necessary evil.

The question Mike posed is what type of performance management system should we use for highly eduated knowledge sector workers who spend their time establishing relationships, evaluating priorities, identifying trends, making connections, brainstorming, focusing, creating new capabilities and strategies?  Mike’s answer focused on intrinsic motivation which directs behavious towards particular goals,  leads to increased effort, increases initiation of activities and enhaces cognitive processing, essentially leads to greater employee engagement.

Mike’s answer involves taking an holistic approach to performance management with 3 cornerstones based on everyday conversations, engagement principles and leadership practices.  Engaging conversations include conversations about what is important, about goals, learning, meaning, recognition and appreciation.  Engagement principles include widening the circle of involvement, connecting people to each other, creating communities of action and promoting fairness.  Leadership practices include speaking honestly, being transparent and being authentic.

Mike concluded with a new paradigm for knowledge sector performance management:

PM = [Org Capabilities * (Conversations * Community * Leadership)] – Under Performers

Mike then went off to ride his bike in the Washington sunshine having greatly enlightened the members of his audience.  The answer I concluded to the question of peformance management versus career development is that it is the wrong question, the real choice is between industrial age performance management and knowledge age performance management.  The sooner knowledge sector organisations realise this distinction the sooner they will increase their performance.