HR Trend: Performance Management
In an organisation, objectives set the course, provide focus and indicate what a company wants to achieve in the short and long terms. That may be in terms of profits, market share, growth or customer satisfaction. Setting clear objectives makes progress easy to follow and employees can see the effects of their own contributions more clearly. This last factor contributes to the pleasure and productivity of employees.
Companies with committed and talented employees make the difference. Performance management is an essential tool for organisations to increase employee commitment. A survey by Hudson shows 40% of employees are motivated by discussing performance. This is also a learning time, which improves performance.
A survey by Protime Netherlands shows that 22% of employees have no assessment and/or performance interviews. Hudson's figures also confirm this image. This is remarkable, because the landscape for workers has changed. Because of the VUCA environment (volatility, uncertainty, complexity and ambiguity), it is difficult to make plans for the future. Technology has never advanced as fast as today. As a result, organisations need to be able to respond to changes. This is not going to succeed with an annual evaluation.
Instead of holding an annual assessment, there must be timely and accurate feedback through regular, informal performance interviews. Only in this way will you as a business be ready for the future.
The annual job interview is a stressful thing, according to one-third of the one thousand employees in the survey. There's a lot hanging on the interview and because such interviews take place only once a year, it's difficult to evaluate the whole year properly.
'Many managers do not know how much time their people need to do their work, so they ad hoc some more tasks, until their people begin to complain', according to CEO Peter S'Jongers.
Focus on development
The Hudson survey shows that discussing the professional development and career expectations of an employee has a motivating effect on his performance. Unfortunately, managers often discuss the behaviour of the employee (that is, how the job is done). Research by Protime shows that 58% of the employees claim that the manager doesn't know about their performance and what they do.
It shows that we shouldn't only look back over the past, but forwards to the future. The aim of the performance management process is to stimulate employees. That can only be achieved if employees are provided with development feedback and growth potential. 40% of those surveyed in the age category of between 18 and 35 say they would like more coaching. And that's where the talents lie which the organisation can make use of.
The role of People Managers
Leading by example is an oft-repeated management slogan. Research by the Centre for Excellence in Strategic Talent Management has shown that this is not without reason. The leadership of the manager is the most important factor that influences the effectiveness of presentations and involvement. The Hudson survey says:
“Employees who work for a manager who adopts an empowering leadership style are more motivated, more involved and view performance management as effective. However, employees whose managers score low on leadership are not satisfied with the process for performance and have a lower level of involvement."
The study by the Centre for Excellence in Strategic Talent Management investigated the impact of 5 'empowerment leadership' dimensions: leading by example, joint decision-making, coaching, informing and to showing concern. The rating of the managers scored the highest on leading by example (3.56 out of 5), followed by joint decision-making (3.42 out of 5), informing (3.35 out of 5), concern (3.18 out of 5) and finally, coaching (2.83 out of 5). With average scores of between 2.83 and 3.56, employees are showing that their managers must perform much better on these dimensions. It is interesting to note that of all the dimensions, those of 'coaching' and 'showing concern' turned out to have the biggest impact on the involvement of the employees, whereas these are the dimensions that got the lowest score in the eyes of the employees.
Good tools and good people managers are essential for the survival of an organisation. Interviews are necessary, otherwise the employee loses motivation. Companies must invest in managers and tools to continue cultivating the human capital.
Climate of rating
Protime's research shows that 18% only discuss their productivity and objectives when things are not going well. 22% never discuss this. 43% indicate that productivity is important, but is not measured. 47% say that it is not clear and comprehensible who is contributing what to a particular goal. So, if 58% of the employees still feel that their manager is not aware of their activities and performance, the question is: “What are organisations doing?" and "Why is there no greater exodus?".
Traditional evaluation systems are often aimed at identifying weaknesses and ways to improve them. The Hudson survey shows that this makes little sense. It is better to focus on strengths and develop them further, than to keep carping on about weaknesses.
Peter s'Jongers: "I am absolutely convinced that our achievements can be realized by putting our people and culture first. How else can we support our growing business, keep our customers happy and attract new customers? "
To the question 'Into which aspect of the business objectives would you like to have more insight?' 29% chose 'the business objectives themselves' and 27% my individual contribution to those objectives. An important function of performance management is to clarify the expectations of workers and to help them understand how individual and team performance contribute to the mission and purpose of the organisation.
Having a common goal, 'knowing what you're working on', at individual and team level, contributes to greater involvement. And that is where many performance management systems fall short. They are only geared to the individual. An ideal system reveals what an employee and a team contribute to the overall objectives.
Recognizing the contribution
The Hudson survey says that even if all of the above is done, it may still backfire on the rating. Employees like recognition and appreciation for the work they have done. This goes further than a bonus. Money is not the most important source of motivation. Only when a manager has the right leadership skills and gives the employee the opportunity to develop will the employee continue to be motivated.
A large number of organisations do not measure their productivity, but still value it. That makes it very difficult to guide and improve. If this subject cannot be discussed and everyone thinks differently about it, guidance is simply not possible. It is shocking that as many as 40 percent don’t talk to their managers about the subject. Measuring and discussing productivity has to improve, especially in this knowledge-based economy in which performance is so important.
Everyone has talent and it is the responsibility of the organisation to help to bring out this talent and nurture it. This makes employees more involved and happier. So, more time and money must be made available to stimulate personal development. More coaching from the manager will be needed for this. For managers, this means that the directive must be exchanged for a more serving form of leadership. This only works when the objectives and performance are open to discussion. After all, effective coaching only works if you have a clear picture of what the staff are doing. This will only benefit the organisation and make it future-proof.
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