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Performance management (PM) is a critical talent practice for driving individual, team, and organizational performance. Despite being long-standing, many organizations continue to adjust their PM processes—either due to dissatisfaction with current approaches or a belief that more can be done to improve effectiveness. While PM has many components, this new article (and the academic version it is based on) highlights how providing teams with greater clarity on what matters most and how they are measured can drive improvement. A study of 109 teams in a North American mortgage company found that those required to pursue both learning (experimentation, innovation) and performance (precision, flawless delivery) simultaneously were the least effective, as the dual emphasis created confusion about evaluation criteria. By contrast, teams with a clear primary orientation—either learning or performance—reported stronger purpose, higher morale, and better results. The findings suggest that PM can unintentionally send mixed signals when processes attempt to evaluate employees on both learning and performance; while connected, assessing them together can create ambiguity about what is truly valued, if not managed effectively. For organizations, a good starting point is clarifying their PM philosophy and defining its primary purpose. Once that foundation is set, goal-setting, coaching, evaluations, and incentives can be aligned to reinforce it consistently—helping teams focus, understand how they will be evaluated, and ultimately perform at a higher level.
