Every organization wants its performance management system to drive engagement, clarity, and growth. But what happens when employees seem uninterested in using it? At first glance, the solution might seem straightforward (and quick): better training, clearer expectations, or even a more user-friendly system. But as two companies discovered, the same surface-level problem can stem from entirely different root causes and therefore requires entirely different solutions.

Same issue, different causes

In this article, we’ll explore two such organizations that struggled with the same issue: low employee engagement with their performance management systems. These two companies (let’s call them Company Alpha and Company Beta), facing what appeared to be the same challenge, sought a Performance Management System Maturity Assessment to understand the root cause rather than applying a quick fix.

What was the issue? Reports were filled out with minimal detail, goals were vaguely formulated, and the system felt more like a formality than a tool for improvement. While their challenges appeared identical, their assessments revealed very different realities; one pointing to a high-performance culture that simply overlooked the system’s value, and the other exposing deeper structural issues that were holding employees back.

By the end, we’ll see how a Performance Management System Maturity Assessment helped each company diagnose the real problem and why tailored solutions, not quick fixes, are the key to lasting improvement.

About the companies

Company Alpha was thriving by all conventional measures: high employee engagement, strong leadership, and a culture of accountability. Employees received regular feedback, understood their roles clearly, and saw their career paths ahead. Yet their performance management system was collecting dust. Despite the company's overall success, employees provided minimal details in their performance reports and treated the system as a mere checkbox exercise.

Company Beta showed similar symptoms: low engagement with their performance management system, vague goal-setting, and sparse reporting. Leadership attributed this to simple causes like lack of motivation or inadequate training, believing that better communication would solve everything. However, as would soon become clear, Beta's challenges ran much deeper than Alpha's, despite their surface-level similarities.

The assessment process

To uncover the true causes behind the engagement issues, each company underwent a Performance Management System Maturity Assessment. Both companies chose to assess their systems across the 5 key capabilities: strategic planning, performance measurement, performance improvement, employee performance management and performance culture.

This process involved benchmarking their systems against industry best practices, conducting detailed surveys to map the perception of stakeholders about the system, and holding structured interviews with key stakeholders to identify gaps either in documentation or in understanding. The aim was to pinpoint areas for improvement, ultimately helping both companies align their systems with their organizational goals and drive more meaningful results.

Key findings and differences

When we took a deep dive into both companies, their performance management systems revealed more than what initially met the eye. Although both companies appeared to be struggling with similar engagement issues, the root causes were quite different.

Company Alpha

Company Alpha’s performance management system seemed to be functioning well at a surface level. During the documentation analysis, the system was found to be in line with best practices, with clear goal-setting processes and structured evaluation tools. It appeared that everything was in place.

However, as the assessment delved deeper, the stakeholder surveys and interviews painted a different picture. While feedback from employees and managers indicated high levels of engagement and satisfaction, it became clear that the lack of meaningful interaction with the system itself was the underlying issue.

The system was viewed as an unnecessary administrative task rather than an enabler of their performance culture.

✔️ Employees already received clear, frequent feedback from managers.

✔️ They had a strong understanding of job expectations and career progression.

✔️ The system was perceived as a redundant bureaucratic task rather than a valuable tool.

Essentially, engagement wasn’t low because of problems! It was low because employees didn’t recognize the system’s benefits.

Company Beta

Company Beta’s performance management system, on the surface, seemed to function normally. However, the documentation analysis revealed several core issues. The system lacked alignment between employee goals and broader organizational objectives, when it comes to performance measurement. There was no cascading of goals from the organizational level down to departments or divisions, leaving employees disconnected from the company’s vision. Moreover, performance reviews were based on narrative-style objectives, evaluated on a vague 1-5 scale, with no defined KPIs. Employees also had no clarity on how their performance data translated into decisions on promotions or raises.

Despite this, surveys and interviews conducted during the assessment painted a more complex picture. While employees were generally engaged with the system, there was widespread dissatisfaction with its fairness and effectiveness. Many employees felt that their objectives were too vague, and that the performance review process was inconsistent.

The system was viewed as unreliable and ineffective, rather than a tool to guide and motivate employees.

✔️ No clear link between departmental or divisional goals and employee objectives, leading to misalignment.

✔️ Performance reviews based on narrative objectives and subjective 1-5 scale, with no measurable KPIs.

✔️ Employees had no understanding of how performance data was used for promotions or raises.

In short, the system wasn’t failing because of disengaged employees, but because it lacked the necessary structure and transparency to drive meaningful performance improvement.

Recommendations

The recommendations for Company Alpha and Company Beta could not have been more different. Alpha’s solution was rooted in a mindset shift—employees needed to understand that their performance management system was a supportive tool, not just an administrative formality. A short training session focusing on how the system could complement their already strong culture would suffice.

Beta, on the other hand, faced a much more complex situation. Here, the issue wasn’t simply engagement: it was the system itself. Clear gaps in goal alignment, performance evaluation, and transparency meant a complete redesign of the system was necessary. From introducing clear KPIs to implementing a more structured, fair review process, Beta’s solution was about rebuilding the system from the ground up.

Conclusions

At first glance, the performance challenges faced by Company Alpha and Company Beta seemed identical. But a closer look revealed something far more profound. For Alpha, low engagement wasn’t a problem—it was a sign of a high-performing culture that simply didn’t know how to leverage the system. Meanwhile, Beta’s seemingly small issues pointed to a deeper need for structural overhaul.

These cases show how quick fixes often miss the mark. A well-executed maturity assessment doesn’t just identify symptoms, but uncovers the true root causes, leading to effective, tailored solutions that drive real change.