By Martin Palethorpe, Leadership Coach, The Pragma Group

Performance management is now generally considered a key part of any good organisation. As the name suggests, the process is designed to help leaders manage the performance of their staff. That means reviewing and appraising an individual's performance against key goals and appraising their capabilities and behaviours.

If done well then a development plan for the individual to work on moving forward will be produced. The end result being a more inspired, more focused, more productive and ultimately more valuable team member.

But of course that doesn't always happen - there are some common traps that managers can fall into, which can end up costing a sizeable amount of time and money.

Avoiding the traps - six common mistakes in performance management

1. Missing the 'people development' mindset

Business results depend on the quality of people in an organisation and how well they work together. Unless you want huge staff turnover, business growth can only occur year-after-year if you develop your people. Sometimes leaders miss this 'people development' mindset. They think only about business strategy and results, with little regard for development people, which fundamentally contradicts the whole point of performance management.

2. Not leading by example

Senior leaders may support the concept of performance management, but struggle to do it for their own direct reports. This could be down to a number of reasons: they may not prioritise it as an important core business need, they may think that their reports are too senior and shouldn't need it, they may have issues with giving difficult messages or generally in personal one-to-one conversations. But if they don't do it, they're sending a strongly contradictory message to others about the importance of performance management – ‘do as you're told, not as I do.’

3. Poor at giving feedback

Giving feedback is a critical part of the performance management process and sometimes senior leaders can have issues doing that. They've actually never been taught how to do it well, so they do one of two things: they give feedback bluntly, focus on the negative and end up demotivating the individual; or they find it hard to give the negative feedback, so they dance around the subject and dress it up in positives. The result is that the really important messages are lost and the individual loses the opportunity to gain vital insights.

4. Failing to align business and personal goals

In performance management, the idea is that every individual's personal objectives feed into the highest level business objectives. So if all individuals in a business achieve their personal goals, the business will achieve its goals. This is the blissful situation where everyone is happy, but there are two mistakes which can commonly happen here:
- The leaders are not really clear about or aligned on their business goals in the first place, or
- The leaders haven't communicated (or won't communicate) the broader business goals.
In either situation, you're missing an opportunity to motivate and focus staff by helping them link their own goals with those of the business.

5. KPIs are only focused on results

Leaders are often guilty of making an individual's KPIs solely about business objectives. In this situation, they fail to allocate any time to performance indicators such as development of succession, employee engagement or personal leadership behaviours. If this happens, they're missing a valuable part of the process, as performance is about how people perform in all areas, not just the business results achieved.

6. When the pressure's on it’s all forgotten

When leaders are under pressure it can be easy to forget the importance of aligning behaviour to people initiatives. Focus can purely become about business performance. In these situations, appraisals and performance management can be at best forgotten, at worst completely contradicted. Whilst this behaviour may seem justified, it's not the way to build a development-centric culture and will ultimately have a negative effect on business results.