Vast majority of organisations set individual targets and conduct formal year-end review discussions. FILE PHOTO | NMG
In an article appearing on Mckinsey and Company website, someone
recently wrote, “the worst-kept secret in organisations has long been
the fact that the yearly habit of evaluating (and sometimes rating and
ranking) the performance of employees epitomises the absurdities of
corporate life.”
It could not have been captured
better because the headache of performance evaluation for the modern CEO
and HR manager is all too real. Apparently, the appraisee, the managers
and staff alike, too often view performance management as time
consuming, excessively subjective, demotivating, and ultimately
unhelpful, the article observes.
In such cases, it
does little to improve the performance of employees. It may even
undermine their performance as they struggle with ratings, worry about
compensation, and try to make sense of performance feedback. But is this
the best approach to inspire, engage and improve employee output?
In
early 2013, 1,056 companies globally shed light on global performance
management practices by getting involved in Mercer’s Global Performance
Management Survey.
The findings of the study revealed
while there are some notable differences in performance management
across regions, globally, overall design of the process looks nearly the
same.
The vast majority of organisations—95 per cent
of them, set individual targets and conduct formal year-end review
discussions. Despite the commonalities in performance management process
around the world, only three per cent of the companies reported that
their overall performance management system delivers exceptional value.
Most aspects of organisation’s performance management approach were
evaluated as ineffective.
Most corporate
performance-management systems do not work today, because they are
rooted in models for specialising and continually optimising discrete
work tasks. These models date back more than a century.
Getting rid of ratings which demotivate and irritate employees
and adopting employee performance management programme as researchers
Bob Sutton and Jeff Pfeiffer have shown, makes sense. Such a system
creates an approach for assisting the performance of the employees to
improve rather than a grading system that highlights the employee flaws.
Who feels inspired to try harder when they just
learned of all the things they are doing wrong? Negative feedback does
not inspire positive results.
There are companies, such
as GE, Gap, and Adobe Systems, who have done just that in a bid to
improve performance. They’ve dropped ratings, rankings, and annual
reviews, practices that GE, for one, had developed to near perfection in
previous decades.
Mercer’s periodic surveys reveal
that the key drivers of performance management success are manager
skills, executive commitment, technology, and calibration. These skills
include capabilities such as setting goals, providing feedback,
evaluating performance, and linking performance to critical talent
management decisions such as compensation, development and careers.
In
addition to managers’ skills, executive commitment has a strong impact
on the likelihood of performance management success. Companies reporting
a higher level of executive commitment are more likely to report
effectiveness in performance management.
Nine out of
10 companies indicated that their highly committed executives provide
regular coaching and feedback to direct reportees and hold their direct
reportees accountable for doing the same with their own teams.
Technology
and calibration are also major drivers. Mercer noted that calibration
among managers to discuss employee performance has many benefits,
including reaching more accurate performance rating decisions,
increasing talent awareness, and identifying individual employee
development needs and opportunities. Technology on the other hand can
afford key benefits, such as ready access to accurate data and
actionable insights to all stakeholders.
Performance
management systems that are fully integrated into other HR and financial
systems, maximise the ability to leverage performance management data
to better allocate rewards, improve recruiting, and enrich career
planning.
mndegwa@kim.ac.ke | Twitter: @MuriithiNdegwa
No comments :
Post a Comment