Hay Group (a premier consulting firm) earlier this year produced a report about Strategic performance management is based on research among 1,660 senior decision-makers in large firms across more than 30 countries worldwide. In the U.S., 250 senior decision-makers participated in Hay Group’s research. “U.S. business leaders face a significant challenge as they work to achieve aggressive growth targets with a workforce that is already stretched thin,” said Katie Lemaire, Vice President at Hay Group. “To fully harness the power of their employees, executives need to take a fresh look at how performance is really managed to ensure people are enabled to drive organizational performance.”
While organizations project modest growth for 2011 and beyond, more than half (54 percent) of those CEOs surveyed fear their employees are already too stretched to deliver current business objectives.
Following 3 years of controlling costs, there is heightened focus now on managing performance, primarily “discretionary” performance. Recent findings indicate 40% of an employee’s performance is considered discretionary, which means, they choose to do more or not. While leaders recognize the need to improve individual performance, the systems to do so, remain inadequate or ineffective.
I continually see 3 critical mistakes in performance management systems.
- Individual performance is not aligned with the business objectives and strategies. Employees needs to know how their role affects the company goals. The Hay Study found less than 13% of companies did so.
- Performance expectations aren’t clearly defined and the individual’s performance reviewed or communicated in real time. Employees need to know what’s expected from them and how and when that’s measured, reviewed and recognized.
- Poor performing employees are rarely addressed soon enough. Leaders need to provide guidance, support, and coaching to improve performance to the required levels, or manage the employee (legally and humanely) out of the organization. sooner than later.
Most organizations have a performance management process, but it can be improved to encourage employees to perform in new and beneficial ways–for the employee and the company. A few improvements can reap great rewards in tapping into higher levels of performance.
