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The Challenges of Emphasizing a Performance-Based Culture

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The challenge of a “Performance-based Culture” as a theme or approach is that it tends to focus on outcome (performance) rather than the drivers of performance (employee engagement).

Here are some key challenges we have seen in companies nationwide:

  • Too much of an emphasis on the numbers. Performance-based cultures tend to be driven by the numbers, not the people, and that never bodes well. Mind you, I’m not talking about NOT holding people accountable — that is a given. But we have found that managers, driven by the numbers alone (to hit their bonus target for example), often do things that kill employee engagement (discretionary effort, motivation, etc).
  • It is true that “numbers drive the business.”  But people drive the numbers.  And unless you are focused on what drives workplace performance (the people), you WILL NEVER GET THE FULL PERFORMANCE PEOPLE ARE CAPABLE OF PROVIDING.
  • Big themes like “we are a performance-based company” can set the wrong tone for how the company views & treats employees. If the tone is not calibrated well, it can end up sounding more like “employees are just the tools we need and use to get the only results we care about — hitting our targets.”

Now, there are also positive things about a focus on performance:

  • Challenges (like hitting performance numbers) can increase engagement. Actively engaged employees do NEED to be challenged. Not because they want to work harder necessarily, but rather because they want to show the world what they are capable of and because they want to solve things. THEIR frame of mind will determine whether performance challenges are positive or negative.
  • Actively engaged employees want to be held accountable. In fact, they are very resentful when the organization allows slackers to get away with poor performance. So if your culture “leans” more toward accountability rather than “hitting the numbers” you will be on a much better track.

I must admit I always cringe a bit when a client says they are “performance-based” because of how that mindset can really torque employee engagement in the wrong direction. So I do admit to some bias here. Again, performance is an outcome. What drives high levels of performance, sustainably, in a manner that increases employee engagement (the free release of discretionary effort) is what we need to focus on. There is no question that the firm’s culture will play a key role there.

One last thought. We have found that “culture” remakes/revisions most frequently fail because of the managers that nodded in agreement but remained clueless about what that meant in terms of their own behavior. Employees embrace “culture” and quit managers (but often stay on as what we call the actively disengaged).

BEST PRACTICES TIP:  Performance is key to any organization’s success, but it is far more effective to focus on the drivers of good performance in addition to the metrics.

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