Performance Management Shouldn’t Kill Collaboration

Companies today need cross-silo collaboration to survive a volatile competitive environment and grow revenue. But often their performance management systems discourage it. Indeed, in research involving more than 8,000 senior managers in biotech, banking, consumer products, energy, law, and other sectors, the authors found that a siloed approach to performance targets is a huge barrier to collaboration. Too many companies incentivize employees to take an overly narrow, short-term view, which makes them scramble to hit their numbers and lose sight of their organizations’ bigger objectives.

This article offers a better approach and outlines specific ways companies can retool their performance management systems to boost collaboration. It starts with implementing a four-part performance scorecard for every employee that establishes shared goals for tackling big challenges while still holding people accountable for delivering individual results. Each component—cross-silo goals, team goals, individual goals, and long-range programs—is weighted according to its importance in helping the company achieve its strategic aims.