Britain’s performance management not fit for purpose
Latest research from global professional services company Towers Watson suggests just 36% of companies in the UK consider their performance management process to be effective.
In addition, one in three managers and employees are shown to be dissatisfied with their performance-management process, according to The EMEA performance management survey.
It found that 87% of companies surveyed said performance management is their primary method for aligning individual performance objectives with strategic business priorities yet 45% say managers don’t see the value in it and 53% say managers don’t have the time to do it well.
Radha Chakraborty, Director at Towers Watson, said:
These findings will not surprise many people, but they do highlight the important gaps that companies will need to address if the effectiveness and perceptions of performance management are to improve. It’s clear that a fix is required, particularly if we consider the importance of the process to business performance. The research revealed that most organisations in the UK will continue to evolve their performance management approach through targeted changes including automating the process through technology. Traditional approaches to performance management are still dominant with over three quarters of organisations in the research operating a once or twice-yearly process and 66% citing the primary outcome of the process being a single rating or score. Less than 10% of companies have scrapped performance management altogether, or are planning to do so. And although 30% of companies are considering eliminating performance ratings or scores, just 7% have already taken the step to do this.
Performance management has hit the headlines recently with several organisations announcing changes to their plans. However, this research suggests although some organisations are making more significant changes to their existing approach, these changes are not necessarily on the scale, or in the direction anticipated by recent articles on the topic.
The headlines are a perfect catalyst for reconsidering the tools and approaches we use to manage employee performance. Clearly, we have an opportunity to make a business impact by reshaping the delivery of performance management. How we do that must align to the culture, as well as the priorities of the business. If we do this in a way that is efficient and effective for managers and employees to execute, then all the media hype will have had a positive impact.
Petaurum Solutions’ Comment
Our article published in October this year titled “More companies to ditch yearly performance reviews – PwC” highlighted the shift in thinking amongst large companies in particular, who are moving to an approach of continuous feedback, rather than a more traditional performance management process. Our advice at the time was to “keep it simple if you really want to embed performance management into the daily activities of your managers”.
Nothing in this latest research really changes that advice as it’s all about adopting an approach that suits your business, fits with your culture and delivers the outcomes you need it to. Evolution rather than revolution is the mantra coming out of this latest survey, with the overriding message being that how you manage the performance of your people isn’t really the issue, it’s the outcome of alinging their performance your business priorities in order to drive the desired results that’s the key to success.
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