The Workplace Has Changed. Has Your Performance Management System?

The following is adapted from Culture Shock, Gallup’s new book about the biggest leadership challenge of our time. For more insights, order your copy of Culture Shock today.

Traditional performance management systems are set up to rate and rank employees, focusing primarily on their weaknesses.

With the rise of the Industrial Revolution bringing processes that enhanced production efficiency, there were good reasons to focus on weaknesses. Leaders were simply using one of human nature’s greatest strengths -- brains hardwired to critique and find fault. Identifying errors has been critical in environments where defect reduction is paramount, particularly in settings where lives and safety are at stake.

But focusing on weaknesses does not improve employee performance. Just 19% of employees strongly agree that this approach motivates them to do outstanding work.

That’s because while we may be naturally wired to give criticism, we sure aren’t wired to receive it. We crave praise any time we can get it, and constant criticism makes it nearly impossible for a manager and employee to build a trusting relationship. This is especially true in workplaces with much more remote work where managers and their teams have fewer opportunities to build bonds in person.

So, what is the right balance between criticism and praise?

Critical feedback is necessary, and everyone needs to be aware and accountable for their shortcomings. But to inspire great performance, managers must lead with meaningful feedback that’s based on team members’ strengths. This simple starting point builds trust and increases the chance that negative feedback will become real development.

And regardless of how many studies have illustrated the positive impact of humanistic psychology, too many leaders and managers still use management systems that assume people operate like machines; that we all develop in the same way.

A scalable "coaching manager" process can fix this by changing the starting point from "we are all the same, develop in the same way and need to be well rounded" to "we all have our own unique innate talents that can be turned into exceptional competencies."

Creating the Ideal Day for Employee Engagement and Performance

Engaged employees aren’t immune to negativity or job stress. Gallup research shows that whether they're engaged or not, employees experience more stress during the workweek than on the weekend. But this is not surprising because most employees always deal with unexpected requests and workplace drama.

How then should managers structure the ideal day for employees to encourage higher engagement and performance?

In a study conducted years before the COVID-19 pandemic and the emergence of far more hybrid and remote work, Gallup asked employees to review their most recent workday and report the number of hours they spent doing various activities. What best differentiated engaged from actively disengaged (miserable) employees was time spent using their strengths -- feeling so absorbed in their work that they experienced timelessness and flow.

Engaged employees spent 4x as much of their day using their strengths compared to what they don’t do well. Miserable employees spent about equal time on both their strengths and weaknesses.

Gallup replicated the above study in 2022. We asked 9,129 employees to reflect on their most recent workday and found strengths mattered even more in today’s workplaces. Engaged employees spent 5x as much of their day using their strengths compared to what they don’t do well. Miserable employees again spent about equal time on both their strengths and weaknesses.

A strengths approach to performance is not about glossing over weaknesses or ensuring employees only get to do tasks and projects they like. Everyone’s role includes responsibilities that aren’t much fun.

Likewise, there will be times when it’s necessary for managers to provide constructive feedback to help employees improve in their roles. Performance management falters when managers treat feedback like it’s a balancing act. They shouldn’t equally match criticism with praise. The scales should be heavily tilted toward what employees do best. And this emphasis is even more important in our increasingly remote workplaces.

Gallup data suggest the current workforce expects their manager to coach them primarily based on their strengths.