Performance Management Not Performing

Performance Management Not Performing

Organizations plagued by an inefficient workforce despite their best training efforts may find the root of the problem in an unexpected place. According to a survey released last week, it all may boil down to lackluster performance management.

Based on a survey of 265 U.S. companies across industries and a complementary survey of 1,100 workers, the study, conducted by the Washington, D.C.,-based human capital and financial management firm Watson Wyatt and the Scottsdale, Ariz.,-based nonprofit human resources professional organization WorldatWork, found that most employers have adopted best practices, such as the 98 percent that say they provide formal annual reviews, and the 91 percent that say they offer coaching and feedback, but not many are successful at implementing them. While 92 percent of programs, for instance, are designed to link pay to performance, only 79 percent of employers say managers at their respective organizations are moderately or greatly effective at it. Moreover, only 52 percent of employees indicated that their managers tie pay to performance.

The study also found a deficiency when it comes to providing formal career development and planning to workers. Eighty-two percent of performance-management programs reported on the survey are designed to include career development, but just 37 percent of employers say that managers at their organizations are at least moderately effective at providing it, and only 31 percent of employees say their companies offer career development.

Management also was deemed sub-par in linking employee goal-setting to business objectives. Such a link was reported in the performance-management program design of 91 percent of the companies surveyed; however 74 percent say their managers are moderately or greatly effective at it. Additionally, only 48 percent of employees report that a link to business objectives is provided.

Some 57 percent of employers say their managers are moderately or greatly effective at providing coaching and feedback to employees throughout the year; 48 percent of employees report this is the case.

The problem may lie with the managers left to execute the programming, the findings suggest. Only 36 percent of the organizations surveyed have a formal training program to enhance managers' ability to manage rewards. This is an essential point since Watson Wyatt and WorldatWork point out that companies that offer such a program are more effective at providing coaching and feedback, providing formal periodic performance discussions and helping poor performers improve.

Full survey results are available for purchase at www.watsonwyatt.com.