The modern economy demands that organisations get the most out of employees. It’s this desire that has prompted the performance management industry, of which of course Work.com is a significant part, to blossom.
The latest Institute for Corporate Productivity report has looked at the changes made across industry over the last few years in an attempt to improve performance management. The research highlighted four major trends in performance management:
- Use of performance ratings remains high. The study found that 86% of responding organisations used performance management, with this number remaining consistent across industries and company sizes. What’s more, this number remained strong over the past seven years. Of more concern however was that just 55% reported positive business benefits from their performance management efforts. Even more alarming, just 28% of respondents believed their organisations were good at performance management.
- Nothing much is changing. When you have an environment where lots is being done, but not much of it is effective, one would imagine many changes are afoot to alter that picture. The reality is however that very little is set to change, with just 30% of respondents saying their organisations had made any changes in the last three years, with just 6% of these regarded as radical changes.
- Traditional performance management is flawed. Part of the reason for this lack of action is that for many respondents, no alternative had presented itself. Although the time spent on reviews and ratings can be significant, a replacement system of continuous conversations and instant feedback also requires a lot of time from employees. The value of that time should be better in a constant feedback system, but if the only goal is to free up employee time, this may not be the best answer for some companies.
- There are few easy answers out there. The performance management sector has unfortunately become synonymous with compensation, and as such it is now difficult to separate the two. 73% of respondents used performance management primarily to support compensation decisions, a rate which has remained virtually unchanged since 2006. As long as compensation management and performance management remain linked, it is very unlikely that we will see fundamental changes in the core concepts of performance management.
So it seems that whilst interest in performance management remains positively high, few organisations appear to be doing it well. For those that do, and of course the companies that help them do that, these are a positive sign that much can still be done to improve things. Change does appear to be happening, albeit somewhat slower than we would perhaps like.