Managing others can be challenging for a whole host of reasons, including, among others, breakdowns in communication, lapses in judgment, emotions, politics, and differences in perception, personality, and expectations. If you manage people who are supposed to achieve specific performance targets within a given timeframe, you face the additional challenges of monitoring each person’s performance, evaluating performance against the target, and then letting them know whether their performance meets, exceeds, or is below the performance target.
A common example is a sales target set for members of a sales staff for a specific period of time, let’s say one month. Inevitably, after reviewing everyone’s performance at the end of the month there is a sales person whose performance is far below the performance target. As the person’s manager, you speak with the person and sure enough, as you would expect, in the next time period the person’s performance improves. Is it appropriate for you to infer that your intervention at the end of the first time period caused the improved performance in the subsequent time period? Should you praise high performers and reprimand or coach low performers after each time period?
The answer to both of these questions is – not necessarily. Let’s explore the situation a bit more carefully to understand why. In general, workers will strive to meet a specified performance target; however, we live in a world of uncertainty where factors that are out of our control can affect our performance. Under these circumstances, it is very unlikely that in each time period workers’ performance levels will exactly match the performance target. Rather, performance levels will fluctuate around the target – sometimes performance will be greater than the target, sometimes it will be less than the target, but on average performance will be meeting the target. In this situation, it is highly likely that sub-par performance in one time period will be followed by improved performance in the next time period even if you do not intervene.
I am not saying monitoring performance levels against a target is ineffective or that communicating managerial expectations is inappropriate. Rather, I am saying that, in the midst of performance levels that fluctuate around a specific target, the average (i.e. arithmetic mean) of the worker’s historical performance levels is a reliable prediction for future performance. If the average of the worker’s historical performance levels meets the target it is likely to remain there regardless of whether you intervene after each time period. For all of the reasons stated above, managing others is hard enough without over-reacting to short-term fluctuations in performance. So relax, and keep your focus on long-term trends. You’ll free up some time for yourself and find yourself making better decisions.