Why can’t a company achieve good performance even after implementing performance evaluations?

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Many companies now implement performance evaluations, but some fail to do so effectively and fail to bring about real improvements in performance; in fact, some companies have begun to doubt the usefulness of performance evaluations! Companies that consider performance evaluation to be useless do so because they do not have a thorough understanding of how to use this tool; on the other hand, it is also related to the purpose for which such companies utilize this tool. If a company intends to use assessment results solely as a basis for determining employee salaries, then there is a 50% chance that those results will not meet the company’s set goals; such situations are particularly common in small and medium-sized enterprises. Why say that? The reason is simple: this approach to performance evaluation focuses only on the results, not on the process – on how the performance was achieved and what the process involved. The company is unwilling to put in the effort to pay attention to these aspects, and there is a lack of focus on the process of performance management. “If \"evaluation\" is separated from process management, it becomes very difficult to achieve the ultimate performance goals. This is because \"performance appraisal\" should encompass the process of \"performance management\", which consists of five components: performance planning, process control (process guidance and support, measurement and monitoring of process performance, as well as improvement and correction of any deviations in process performance), evaluation of performance outcomes, performance improvement, and the application of those performance outcomes – thus forming a PDCA cycle. Now, many companies only handle the three processes of performance planning, performance evaluation, and the application of those evaluation results, thus skipping the two most crucial processes for achieving performance goals. So, how should “process control” in performance evaluation be carried out? First, prepare a \"Performance Planning Document\" based on the set performance goals. First, list the performance objectives, then identify the relevant key tasks, the capabilities necessary to achieve those objectives, and the factors that influence performance. Next, assess whether the evaluator possesses the required skills to meet these objectives and whether they have strategies and plans to do so; if not, work together to develop such plans. The preparation of a \"Performance Planning Document\" can be guided by ISO standards such as the \"Product Quality Planning Document\" and \"QC Engineering Diagrams\". Companies with the appropriate capabilities can conduct failure mode analysis based on performance management, addressing potential risks to goal achievement through risk assessment and improvement of obstacles in various stages of the process. Second, the supervisor provides performance coaching based on the established implementation plan, prepares a coaching schedule, and carries out the activities according to that schedule. Third, performance process management is carried out on a weekly basis through regular and random inspections; any deviations are corrected immediately. The form \"Report on Corrective and Preventive Actions\" used under ISO9001 is employed for management, and if the verification results are unsatisfactory, the case is never closed. Fourth, statistical techniques are used to conduct statistical analysis of employee performance, with SPC employed for dynamic monitoring. Once it is detected that the values exceed the control limits or that the trend is moving in a negative direction, control actions are taken immediately, and the level of control is adjusted accordingly to improve management efficiency. Fifth, as for how to manage the \"product/service quality\" performance (under the ISO system), and likewise how to manage other types of performance (such as human resources performance, sales performance, financial performance, etc.), then performance process management will definitely be ensured! “The three processes of input → process → output all require strict planning, control, and measurement; any abnormalities must be corrected immediately. None of these steps can be omitted – this is the most fundamental principle of quality management. ”These are Yang Yuanzhi, the quality director of Guangdong Tianyuan Group,’s profound insights into performance management in terms of “product quality”. Director Yang’s insights on quality management are worth careful consideration when it comes to applying methods for managing \"other forms of performance\"!