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Business Journal
Hospitals' Performance Management Must Be Improved Fast
Business Journal

Hospitals' Performance Management Must Be Improved Fast

by Chris Groscurth

Story Highlights

  • Performance management strategies aren't meeting challenges
  • Hospitals need to select the right managers and employees
  • A strengths-based approach to employees is essential

As the rules of healthcare in the U.S. change, quality and performance metrics are more important to hospitals than ever before. Healthcare leaders are now tasked with turning enormous quantities of data into meaningful outcomes -- and many of them are discovering their performance management strategies aren't up to meeting the challenge.

Performance management is a continuous process that includes goal setting, real-time feedback and coaching, appraisal, employee development, and rewards and recognition. Gallup's analysis of more than 50,000 employees reveals that effective performance management systems encourage teamwork, communication and collaboration between managers and employees. When done right, performance management is a powerful tool for achieving business results.

However, a 2015 Bersin study found that only 10% of global business and HR leaders surveyed believe that their performance management process is worth the time that leaders put into it. And more than 89% of those surveyed have recently overhauled their performance management process or plan to do so in the next 18 months.

For many healthcare organizations, simplicity may be the secret to improving and sustaining performance over the long haul. Before investing in new technologies and processes, healthcare leaders should take a step back and rethink performance management. By aligning performance management with their overall leadership strategy, leaders can position their organizations for high performance that lasts. Here are the key steps:

Dispel Performance Management Myths

Before a performance management system can be improved, leaders must challenge a number of false assumptions about performance management. By separating performance management myths from facts, they can then lay a foundation for a system that will drive business results.


Performance Management: Myths Versus Facts

Creating or improving a performance management system to drive business results requires leaders to separate performance management myths from facts.





Everyone can perform at a high level with the right training or the right process.

Talent fit for a role is the best predictor of performance in that role.

The same performance measures should be applied to all roles.

Performance measures should be defined based on success within a role.

Experience is the best predictor of high performance.

The combined effect of talent, experience and engagement is the best predictor of performance.

HR is responsible for performance management.

Employees and managers are responsible for performance management.

Evaluating performance once or twice a year is sufficient for closing performance gaps.

Achieving desired results requires ongoing, open and direct feedback and coaching.

Performance management should focus on fixing weakness.

Performance management should focus on developing strengths.


Select the Right Managers

A company might have a world-class performance management system in place, but the system is only as effective as the managers who implement it. Gallup finds that 70% of employees who rated their managers as "best" also rated their performance management system as "very good," while of the employees who rated their managers as "below average," only 2% gave their performance management system a "very good" rating.


Great managers have the right talents for supporting, positioning and engaging their staff. These managers:

  • empower employees to make decisions
  • recognize or praise employee achievements
  • care about their employees
  • have regular and open communication with employees.

Companies that want to increase business and employee performance and productivity should invest in getting the right managers and then support them in engaging their employees.

Select the Right Employees

Highly talented individuals have an innate predisposition toward performance and naturally exhibit the thought processes and behaviors that lead to better performance. For example, when hospitals use quality of care and patient satisfaction to measure performance, selecting employees who quickly and easily form emotional connections increases the likelihood they will successfully meet those measures. Hiring employees based on objective selection criteria -- especially for pivotal roles that drive organizational results -- can help organizations achieve their performance goals more effectively.

Involve and Engage Employees

The relationship between an employee and his or her manager is crucial for creating employee engagement. In a healthcare setting, engaged employees not only are more productive, they are also better able to engage patients. Meaningful conversations, well-established expectations and a focus on strengths will develop employees who are connected to an organization's mission, and not just along for the ride. To foster engagement, managers should:

  • Clearly communicate performance standards and what good performance in a role looks like.
  • Focus on employee strengths rather than weaknesses.
  • Help employees understand that the performance management system is designed to aid in their development.
  • Communicate regularly with their team members on performance expectations, rather than once a year.

Adopt a Strengths-Based Approach

Gallup has found that leaders who focus on employees' strengths can practically eliminate active disengagement. Only 1% of U.S. employees who agreed that their supervisor focuses on strengths rather than weakness were actively disengaged in their jobs, while 61% were engaged at work. In contrast, among employees who report that their manager focuses on weakness rather than strengths, active disengagement levels jump to 22%.


By understanding employees' strengths, leaders and managers can help employees learn and grow in the areas where they have the greatest likelihood of success -- their areas of strength.

Leaders who want their companies to benefit from a strengths-based performance management strategy should keep these key guidelines in mind:

  • Don't assume that employees know their strengths or the strengths of their coworkers.
  • Discuss ways to apply strengths in a team setting to achieve shared performance objectives.
  • Help employees -- individually and collectively in teams -- align their talents to meet role expectations.
  • Incorporate strengths into performance conversations and reviews, and help employees set goals based on their strengths.
  • Consider formal strengths-based management training for managers.

Ineffective performance management is a problem that plagues many healthcare organizations. There is no doubt that high performance pays off, both in quality of care and in business outcomes. But there are no quick fixes for changing an organization's performance culture. Improving performance management in healthcare will require hard work and smarter management choices.

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