What’s so special about performance management systems?

Usually companies want to implement or improve performance management systems (绩效管理系统 jì xiào guǎnlǐ xìtǒng）in order to address a perceived performance issue. Sometimes the desire to strengthen PM comes from legal compliance issues; in China, performance management systems are not legally required, but are still vital for legal reasons. Without good documentation about poor performance, a company will risk lawsuits and damaged government relations when the management dismisses poor performers. However, I argue that the best use (and motivation to implement) a performance management system in China should be as a tool to positively create culture change within an organization.

Large companies usually have performance management systems in-place. Or, at the very least, they expect to be able to plug-and-play centralized systems. Many new (or less experienced) HR managers will copy a pre-packaged system into their operations without much customization. More often, they will implement centralized systems. The implementation usually does not consider what skills are necessary to effectively use the system. The problem here is that performance management systems ultimately are about managing the behavior of individual people, which is not easy. Success largely depends on having a management team who are capable of driving adoption of the system over a long period of time. Anyone can copy a performance management system from one company to another. Implementation is easy. But adoption is usually very difficult. The system must match business needs. The system needs people who know how to use it and have the right skills. The system should be aligned with corporate objectives.

In short, any semi-competent manager can introduce and implement a performance management system within a month. But in most Chinese companies who I have called upon (including foreign owned, JVs, and SOEs), the system will be viewed by managers as well as staff as just another HR system which creates “busy-work”. Gaining passionate adoption is a multi-year crusade which requires commitment and support from all levels of management. For a company to succeed in implementing and adopting a performance management system, the management must view performance management not as just another HR system, but rather as a tool to slowly change the way people behave. Change the way they think. Change their culture.