Performance Management

Performance management is the umbrella talent management is placed under. The general purpose of performance management is to obtain feedback in order to differentiate chance vs skill in employee performance, recognize employee growth and set new measurable objectives.

How do youIt is however, difficult to make comparisons between employees that aren’t within identical situations?.

Let us begin this discussion by assuming all employees have equal abilities to perform to exceptional standards. Despite this assumption, our measure of employee performance of choice will likely be noisy.

Consider the following example in a normal distribution:

At any given time and any level of effort, results for measurable outcomes of employee performance can vary and lie outside their control. For instance, the efforts of team members or a thriving organization. The key here is to differentiate skill from luck.

In some instances, it’s easy to distinguish between skill and luck:

In this particular distribution, a high efforts distribution is much closer to good outcomes compared to lower efforts. This makes it easy to infer that high levels of effort from employees will likely result in good outcomes and vice versa. While this simple distribution is nowhere from perfect, we can see that under these circumstances employee performance is easy to measure and straightforward feedback can be provided.

In the real world, it is far more difficult to distinguish between skill and luck:

In this case, while higher efforts do correlate to a higher likelihood of good outcomes, the chances of an employee performing exceptionally by chance and skill is mostly indistinguishable. And vice versa, when poor outcomes results,