Featured Research: Moving Towards Continuous Performance Management
Leverage employee recognition to advance employee performance
Posted on 06-18-2018, Read Time: Min
Share:
Employers have long struggled to develop effective performance management (PM) programs. All too often, these programs result in employee morale problems rather than increased performance levels. Some experts believe that the once-a-year nature of many PM programs is problematic and that continuous performance management programs could be part of the solution. To investigate this notion, HR.com collaborated with BetterWorks to conduct research into the role of continuous performance management.
About one-third (34%) of participants say employees are most motivated by linking the PM software to career trajectory and promotions. About one quarter indicate that employees will use the software when other managers and leaders use it (25%). About 24% of the respondents think that employees will use it when it is tied to bonuses and rewards.
Almost half of the participants felt that unconscious bias is likely impacting many manager-employee relationships. Respondents were also asked if they would prefer to work with a “technology system” that helps remove bias from the performance reviews/management process, and 68% agreed they would.
Most employers are focusing on employee retention (71%). This is not surprising, given the record low levels of unemployment. It is also promising to see many organizations (47%) planning to prioritize the improvement of their performance management processes.
Survey Statement: How would you rate your organization’s current performance management system? (Use graph from the layout)
The majority of respondents (89%) think continuous performance management is superior to the annual or bi-annual review process. Some experts argue that by using CPM, employees will get more growth-oriented feedback about goals and, as a result, will be more likely to achieve those goals.
When asked about which accomplishments managers are most likely to recognize, about one-third selected promotions/title changes. However, nearly as many (28%) chose teamwork/successful collaboration and excelling at an internal project (26%).
Although only 8% of organizations rate their recognition systems as excellent, nearly two-fifths think they are good.
Just about two-fifths of respondents regularly use recognition feedback for employee raise and promotion decisions. This could be one of the reasons many organizations are not satisfied with their performance and recognition systems. Feedback often fails to be included in discussions about promotions and raises, partly because managers forget about it.
Organizations that use continuous performance management systems and also have a recognition program in place are about two times more likely than average to view their performance management systems as being good or excellent.
High Performers are more likely to use feedback from recognition when making compensation and promotion decisions. In fact, nearly two-thirds of such organizations (62%) factor in recognition for this purpose, compared with just two-fifths (32%) of Lower Performers**.
High Performers are more likely to let recognition be seen by everyone.About three-fifths of such organizations (58%) let everyone in the company from the CEO to the intern see the recognition system, compared with about two-fifths of Lower Performers (that is, those with less effective PM systems) (39%).
When it comes to onboarding, nearly three-quarters of High Performers (74%) review performance management systems, compared with just 57% of Lower Performers. What’s more, about half of High Performers (52%) discuss employee recognitions systems during the process, which is significantly higher than 34% for Lower Performers.
Taken as a whole, today’s conventional performance management process is broken. To get a better return on investment on PM, many organizations will need to adjust or even overhaul their systems.
In light of these research findings, what steps should organizations take to improve the overall performance management process? To learn more about the research - Moving Towards Continuous Performance Management- along with key strategic takeaways, we invite you to download and read the complete report here:
*High Performers are those respondents from organizations with better performance management systems: that is, those that rated their performance systems as excellent or good.
**Lower Performers are those respondents from organizations with less effective performance management systems: those that rated their performance systems as average, poor or very poor.
Below are key findings from the study:
• Performance management remains a major challenge, and many organizations plan to revamp their processes and systems.
• Continuous performance management has a good reputation, but is not yet widely used.
• The majority of organizations with good PM systems, however, use continuous performance management processes.
• A majority also use employee recognition programs.
• Integrating aspects of performance management with employee recognition programs is often associated with greater PM success.
• Continuous performance management has a good reputation, but is not yet widely used.
• The majority of organizations with good PM systems, however, use continuous performance management processes.
• A majority also use employee recognition programs.
• Integrating aspects of performance management with employee recognition programs is often associated with greater PM success.
Performance Management Systems
Over the years, performance management practices have evolved from highly subjective conversations led by managers (and the use of paper-based review forms) to more sophisticated systems that include components such as key competencies, performance targets, self-appraisals, 360 reviews, and more. Traditionally, the review process occurs on an annual or biannual basis. More recently, some experts have begun advocating for a more frequent review and feedback process. According to the survey, the majority (92%) of participants use a performance management system.What Is Driving Performance Management System Usage?
Getting employees to properly use any system—whether it’s technology-based or not—can be a tough process. So, what factors motivate employees to use a PM software?About one-third (34%) of participants say employees are most motivated by linking the PM software to career trajectory and promotions. About one quarter indicate that employees will use the software when other managers and leaders use it (25%). About 24% of the respondents think that employees will use it when it is tied to bonuses and rewards.
Almost half of the participants felt that unconscious bias is likely impacting many manager-employee relationships. Respondents were also asked if they would prefer to work with a “technology system” that helps remove bias from the performance reviews/management process, and 68% agreed they would.
Most employers are focusing on employee retention (71%). This is not surprising, given the record low levels of unemployment. It is also promising to see many organizations (47%) planning to prioritize the improvement of their performance management processes.
How Successful Are Performance Management Systems?
Just 7% of organizations rate their systems as excellent and only one-quarter think their systems are good. The rest viewed their systems as average or worse.Survey Statement: How would you rate your organization’s current performance management system? (Use graph from the layout)
Continuous Performance Management
Although performance management systems today are widely adopted, only one-third of those with systems use a continuous performance management (CPM).The majority of respondents (89%) think continuous performance management is superior to the annual or bi-annual review process. Some experts argue that by using CPM, employees will get more growth-oriented feedback about goals and, as a result, will be more likely to achieve those goals.
Employee Recognition
About three-fifths of respondents (57%) today use a company-sponsored recognition program. The vast majority of HR professionals (89%) view positive feedback as a form of recognition. Recognition can be a simple acknowledgement/thank you message and may or may not be accompanied by some type of gift.When asked about which accomplishments managers are most likely to recognize, about one-third selected promotions/title changes. However, nearly as many (28%) chose teamwork/successful collaboration and excelling at an internal project (26%).
Although only 8% of organizations rate their recognition systems as excellent, nearly two-fifths think they are good.
Recognition Is Linked with Engagement
Organizations were asked to choose the most effective actions HR can take to increase employee engagement. Nearly two-thirds cited providing more feedback (39%) or employee recognition (28%) as the most effective ways of boosting engagement. These were more widely cited than perks and bonuses (11%) and diversity initiatives (10%). The remaining 12% were specific references to setting goals correctly and improving overall communication and training.Just about two-fifths of respondents regularly use recognition feedback for employee raise and promotion decisions. This could be one of the reasons many organizations are not satisfied with their performance and recognition systems. Feedback often fails to be included in discussions about promotions and raises, partly because managers forget about it.
Classifying High Performers*
We conducted various analyses in order to gain insights into which practices appear most likely to result in greater satisfaction with performance management. High Performers are more likely than their less effective counterparts to have a recognition program in place. In fact, more than two-thirds (68%) have a recognition program in place compared with just over half of those with less effective PM systems (55%).Organizations that use continuous performance management systems and also have a recognition program in place are about two times more likely than average to view their performance management systems as being good or excellent.
High Performers are more likely to use feedback from recognition when making compensation and promotion decisions. In fact, nearly two-thirds of such organizations (62%) factor in recognition for this purpose, compared with just two-fifths (32%) of Lower Performers**.
High Performers are more likely to let recognition be seen by everyone.About three-fifths of such organizations (58%) let everyone in the company from the CEO to the intern see the recognition system, compared with about two-fifths of Lower Performers (that is, those with less effective PM systems) (39%).
When it comes to onboarding, nearly three-quarters of High Performers (74%) review performance management systems, compared with just 57% of Lower Performers. What’s more, about half of High Performers (52%) discuss employee recognitions systems during the process, which is significantly higher than 34% for Lower Performers.
Taken as a whole, today’s conventional performance management process is broken. To get a better return on investment on PM, many organizations will need to adjust or even overhaul their systems.
In light of these research findings, what steps should organizations take to improve the overall performance management process? To learn more about the research - Moving Towards Continuous Performance Management- along with key strategic takeaways, we invite you to download and read the complete report here:
*High Performers are those respondents from organizations with better performance management systems: that is, those that rated their performance systems as excellent or good.
**Lower Performers are those respondents from organizations with less effective performance management systems: those that rated their performance systems as average, poor or very poor.
Error: No such template "/CustomCode/topleader/category"!
