Although companies are spending substantial amounts of time and money on performance management, too few business leaders are confident that their approaches are supporting the workforce of the future or improving the performance of the business itself, a report released by Accenture Strategy has warned.
The findings of the report, “Is Performance Management Performing?” are based on a survey conducted December 2015 to January 2016 of 2,100 leaders and employees from organizations across North and South America, Europe, and Asia Pacific. The survey showed that while 94% of the respondents agree that performance management improves business performance, only 34% believe their organization’s current performance management approaches effectively support the delivery of business objectives, and just 32% think performance management is providing a clear line of sight between organizational and individual performance. Moreover, 89% of the employees surveyed said they believe their performance would significantly improve if performance management were changed.
Less than half of respondents expressed confidence in their company’s capacity to manage the basics of performance management, including developing and growing employees (40%), retaining employees (28%), engaging and motivating employees (40%), and making fair decisions regarding bonuses, pay raises, and promotions (36%). The leaders and employees surveyed indicated that they lack confidence in their organization’s management of more complex workforce needs, with only around one-third saying they think current performance management approaches effectively promote collaboration (35%) and creativity (32%).
Nearly half (48%) of the leaders surveyed said they think increased workforce diversity is creating a greater variety of employee motivations and expectations. In addition, 77% indicated they believe that personalizing performance management practices to individuals or groups is mandatory to meet the needs of the workforce of the future, and 41% of respondents said they believe that “one-size-fits all” performance management practices have a major negative impact on performance management. However, just 34% reported that their organization has moved away from standardized performance management approaches.
While 50% of the leaders surveyed said they believe that employees are increasingly looking for development and coaching opportunities, and 53% said they think that personalizing feedback and coaching would significantly improve employee performance; 52% of the leaders acknowledged that the annual review process is often used as an alternative to engaging in actual performance development, and 73% of the employees polled reported that they have not seen performance management practices move away from a focus on paperwork to a focus on conversations.
Yet researchers observed that some companies are experimenting with new approaches to performance management: for example, rewards can be allocated based on real performance data or survey data from all of an employee’s project leaders, or employees can determine rewards for one another in a crowdsourced approach.
From Benefit Trends Newsletter, Volume 59, Issue 5
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