Global research shows lack of support for dynamic processes
Performance management provides exceptional value for just three per cent of organisations, a global survey has revealed.
Employers know that talent offers a competitive advantage in business but say that establishing effective performance management remains a challenge, according to Mercer’s 2013 Global Performance Management Survey.
The research, with leaders at 1,050 organisations in 53 countries, showed that more than a quarter of organisations in the Europe, Middle East and Africa (EMEA) region have substantially changed their performance management process within the last year.
This is not surprising given that 58 per cent of managers were deemed ‘marginally skilled in providing career development coaching and direction’, by survey respondents, and, only 7 per cent of managers were felt to be ‘highly skilled at having candid dialogued with their direct reports about performance’.
Roughly one in three organisations worldwide said improving managers’ ability to have candid dialogue with employees has the greatest impact on overall company performance.
Sue Filmer, principal at Mercer, said: “While having a robust process is important, it is critical to have managers who are skilled at effective performance conversations for setting performance expectations and providing feedback on achievements and outcomes. Overall, there is a lot of scope for improving performance management within European organisations.”
The research also found that no region or country can claim it leads on performance management best practice. In general, organisations in Asia Pacific are more likely to have tools, guidelines, and metrics in place compared to those in Europe that typically place more emphasis on career development in their pay-for-performance policies.
Colleen O’Neill, senior partner at Mercer, said: “In today’s challenging business and economic environment, companies are struggling to achieve important outcomes – like focusing employees on the ‘right’ things and driving them to perform at higher levels – with their current performance management programmes.
“And even though there is a lot of talk about workforce segmentation and innovative performance management practices, few effectively support dynamic performance and career development processes, and a minority of companies has made revisions to their practices in the last few years.”
Technology alone is no panacea for good performance management according to more than half of employers asked, despite 40 per cent of organisations using these processes to differentiate between performance levels.