Can We Fix What’s Wrong With Continuous Performance Management?

May 16, 2022

Are you a devoted practitioner of outcomes and key results (OKRs) and continuous performance management? Even if you’ve barely heard the terms, I have two objectives for this article:

  1. Introduce three fatal flaws plaguing continuous performance management to apply OKRs.
  2. Tickle your imagination with alternatives.

In his book “Measure What Matters,” John Doerr popularized the now-ubiquitous concept of using OKRs to measure performance. I greatly admire how Doerr expanded on Andy Grove’s mentorship at Intel and facilitated the success of Google and other high-profile organizations.

In Chapter 15, Doerr helped popularize another phenomenon—replacing the dreaded annual performance review with regular performance and feedback conversations. Now famously known as continuous performance management (CPM), Doerr helped codify this formal process for implementing OKRs by writing:

To reach goals almost beyond imagining, people must be managed at a higher level. Just as quarterly OKRs have rendered pro forma annual goals obsolete, we need an equivalent tool to revolutionize outdated performance management systems. That transformational system, the contemporary alternative to annual reviews, is continuous performance management.

No argument from me. The following line is where I think Doerr veers off track, and the mess begins to take shape. He continues explaining CPM by writing:

It is implemented with an instrument called CFRs, for:

  • Conversations: an authentic, richly textured exchange between manager and contributor, aimed at driving performance.
  • Feedback: bidirectional or networked communication among peers to evaluate progress and guide future improvement.
  • Recognition: expressions of appreciation to deserving individuals for contributions of all sizes.

Agreeing on measurable objectives and replacing clunky annual performance reviews with regular coaching to achieve those outcomes make sense. Aside from drowning in alphabet soup, implementing OKRs through CPM using CFRs seems worthwhile, practical and nonthreatening.

But too many good ideas take a bad turn through faulty execution, resulting in a mess of unintentional consequences.

The 1st fatal flaw: Conversations aimed at driving performance

Robert Greenleaf coined the term servant leader, defining a servant-first leader as focused on a person’s highest-priority needs. Science has empirically validated people’s highest priority needs: the three basic psychological needs required for optimal motivation and thriving, namely choice, connection and competence (my terms for Self-Determination Theory’s autonomy, relatedness and competence).

Conversations “aimed at driving performance” are leader-centric, outcome-focused and erode the opportunity for a leader to provide the basic need reinforcement required for achieving and sustaining high performance. When leaders encourage choice, deepen connection and build competence in their one-on-one meetings, they help fuel people’s vitality.

Satisfying people’s psychological needs instead of driving performance leads to the outcomes leaders seek. You can drive cars, cattle and golf balls. But driving people to perform just makes them crazy.

The 2nd fatal flaw: The feedback fallacy

Oh, dear. Doerr lost me with this Sheryl Sandberg quote on feedback:

Feedback is an opinion, grounded in observations and experiences, which allows us to know what impression we make on others.

How ironic is it that Doerr promotes the power of objective measures, then quotes a definition of feedback based on opinion to understand other people’s impressions?

Many, including me, have written extensively on research showing the effectiveness of pure and informational feedback over personalized and opinion-based feedback (praising and reprimanding). You don’t need research to validate our collective feedback experience doing more harm than good. And I’ve often promoted a cultural shift to flip the feedback, encouraging self leaders to accept responsibility for taking the initiative and asking for the feedback they need to make progress and achieve their goals.

What I find so frustrating about feedback these days is how it’s become tied to the third fatal flaw — recognition. (This is a rather complicated mess that can’t be sorted out in one article, but I hope you’ll read on.) Somehow, we’ve conflated the idea of feedback, progress and recognition.

The 3rd fatal flaw: Why create cultures of recognition?

An overemphasis on recognizing progress becomes an easy leap to a false conclusion that the best way for people to make and continue making progress is through recognition. We establish systems to reinforce praise and rewards. We shower learning and success with feedback in the form of “likes,” tokens and badges.

We’re back to B.F. Skinner, carrots and sticks, and a totally wrong-headed (and empirically proven ineffective) approach to motivation.

We need to stop the madness and ask: “Why recognition?” Why do we perpetuate an insidious culture of recognition?

Maybe we mistakenly interpret recognition as caring. To thrive, we need genuine relationships where people care about us (and allow us to care about them) without ulterior motives. What people need — indeed, yearn for — is connection. People thrive when their goals are values-based, they have a meaningful sense of purpose and their work contributes to something greater than themselves.

Why not replace recognition with connection, purpose, gratitude, contribution or collaboration?

It’s not too late to fix CPM’s fatal flaws that threaten to undermine its positive intentions. We need to be willing to rethink conversations aimed at driving performance, opinions masquerading as feedback and recognition that incentivizes, externalizes and devalues people’s workplace experience.

I hope you might be open to exploring a new approach as contemporary as OKRs and CPM by teaching leaders how to reinforce people’s psychological needs by encouraging choice, deepening connection and building competence.

By Susan Fowler