Death by data: Why simplifying performance management will boost your bottom line

In a world driven by KPIs, metrics and endless information, it’s easy to fall into the trap of believing that more data means better decisions, writes Tom Lewis.

While this might be true in some cases, when it comes to performance management, the complexity of data can become the thing that actually stifles progress. Over-engineered processes add administrative headaches, alienate employees, and distract managers from what truly matters – improving performance. Because, ultimately, we need to create a high-performance culture if we want our companies to thrive.

For this reason, we need to rethink performance management as a tool for growth, not just measurement.

Understanding performance

Overly complex performance systems fail because they focus on measurement rather than development. Simplicity doesn’t mean lowering the standards of performance review; it means getting clear on what’s important and focusing on strategies and systems that drive results.

The working week is busy, but that’s no excuse for waiting for performance reviews as an annual one-off event. Ongoing feedback is a much greater driver of performance, as these regular conversations help address challenges in real time, turning feedback into a tool for growth rather than a post-mortem exercise.

Continuous feedback also provides an opportunity for both reflective and pre-emptive performance management – helping people to learn from the past and apply lessons learnt to the future.

By simplifying the process and focusing on meaningful interactions, you can shift from simply tracking performance to inspiring it.

Aligning effort to strategy

Setting a few clear objectives that align with company strategy is critical for unlocking motivation and productivity. Employees perform better when they see how their work contributes to the organisation’s goals.

With this in mind, we see smaller companies often have a higher percentage of high performers because everyone is “close enough to see the magic”. Companies that have managers with a smaller span of control (with one to three direct reports on average) also have the highest percentage of high performers on their teams, meaningfully outpacing companies that have, on average, larger teams. So, for an employee’s magic to shine, it is better to be one of few rather than one of many.

With this in mind, larger organisations need to make a more concerted effort to help every person at every level understand their relevance and role in achieving the company’s overarching vision and mission.

Nurturing high performance

Performance can be a complex beast, so simplifying your approach through streamlining the way data is gathered and shared is essential.

Rapidly scaling companies often have to deal with a double-edged performance sword, as they typically have both more top performers (14 per cent) and more underperformers (13 per cent) than stable organisations, showing a clear need to nurture talent in these fast-moving environments.

While it’s tempting to focus efforts on the high performers in your team, our research has found that organisations often over-prioritise high performers and overlook the potential of their mid-level employees. However, data has shown that high performance isn’t always sustainable over time, so nurturing mid-level performers is a great way to have a strong performance pipeline, rather than putting all of your eggs in the high-performer basket.

Our research has found that top-performing employees are often having an elevated experience. They have managers who go the extra mile for them, they are given more recognition, and they feel safe in raising their hand to share ideas for innovation. Culture Amp data has found that high performers are 25 per cent more recognised for contributions and 16 per cent more supported by their managers.

So consider this when supporting and encouraging those mid-level performers in your team; they’re a goldmine of performance potential.

Keep it simple

Complex systems demand time and resources that could be better spent developing employees. Simplifying performance management means your team leader can be freed up to focus on meaningful development rather than navigating convoluted metrics.

Try using performance management to recognise efforts and encourage experimentation, reflection and learning so that you can foster performance while focusing on what matters. Rather than drowning in a long list of data that becomes irrelevant when only aired once a year, you can focus on the metrics that matter and help your managers bring out the best in their people.

By offering every person in your team consistent managerial support and fair performance evaluation on an ongoing basis, you’re laying the foundations of strong performance.

Tom Lewis is the lead solutions consultant at Culture Amp.