Managers play a critical role in rewarding and engaging employees… but they get low marks on their ability to deliver.
If you think about the best boss you ever had, what images come to mind? Did that individual influence your decision to stay with the company? Did that person have an impact on your commitment to deliver your very best?
The recent study, The Towers Perrin Talent Report: New Realities in Today’s Workforce, indicates that managers play a critical role in helping organizations to retain and engage employees. The study finds, however, that employees give their managers two thumbs down when it comes to inspiring them to do their best work.
When it comes to compensation issues, only 18 per cent of more than 6,000 workers polled gave their managers a passing grade for recognizing and rewarding good performance.
HR practitioners have an important role to play in helping managers deliver results through their people. A solid performance management system that links effectively with compensation programs is a critical starting point. Are managers clear about their role in defining performance expectations? Do they know how to provide timely and meaningful feedback to their employees? Do they understand how to create links between performance and rewards? Are they involved in the process of determining how their employees should be rewarded? Do they know how to recognize and motivate high performers? Do they know how to tackle performance issues?
In organizations where managers are actively engaged in optimizing employee and organizational performance, performance management is a way of doing business, rather than an annual “event.” There is a clear goal-setting process that aligns individual performance objectives with broader business goals. In such an organization, employees understand what is expected of them. They understand how they can make a difference, regardless of their role or organizational level. And, they understand how their contributions will be rewarded.
Most organizations have a variety of vehicles in place that can be used to create meaningful links between performance and rewards — from base pay increases, incentive awards and stock options to development opportunities, promotions and non-monetary recognition. However, the best designed HR programs and processes will fail to live up to expectations if managers aren’t somehow engaged in utilizing them effectively.
To that end, organizations can take some important steps to ensure managers are delivering effectively on their critical people management accountabilities. These include:
•revisiting the design of pay and performance management programs to test for issues that may be hindering their implementation;
•providing managers with training and support tools to ensure they understand how the programs operate and what is expected of them, both in terms of performance management and rewards management; and
•ensuring managers understand their people accountabilities to ensure they understand the scope of their decision-making authority.
Many organizations acknowledge that their performance management systems are far from being “best in class.” They also acknowledge that their managers don’t always do a good job of differentiating rewards based on performance. A key first step in moving towards a more performance-based culture is to get feedback from managers and employees alike on what’s working and not working. There could be design issues at play that are hampering the process. Perhaps the performance management process is too bureaucratic. Perhaps the incentive plan has too many measures — or people don’t understand the measures. If you haven’t audited your pay and performance management systems in a while, now might be the time.
Beyond design issues, another potential — and frequently overlooked — barrier to effective manager engagement is the lack of training and support on company-specific programs. While managers are often provided with general training on leadership or managing performance, all too often organizations fail to explain the workings of their own programs. As a result, managers may not be clear on how certain programs actually operate — or their role in program execution. This, in turn, will undermine how well managers communicate with employees about matters such as performance expectations, or how results will be rewarded. It will also undermine the quality of decisions made around issues such as compensation and employee development.
Further, the process of managing performance and linking results and rewards sometimes requires managers to make tough or unpopular decisions. Managers need ongoing training and support to ensure they utilize programs — particularly those related to pay — effectively. This includes training and support on how to address performance issues and how to effectively communicate around performance and reward issues so that messages to employees — including the tough ones — are delivered in a clear and consistent manner.
A good way to test how well things are working in your organization is to examine the distribution of performance ratings, merit increases and incentive award ratings. If managers are recommending the same ratings across the board, or if they’re reluctant to tackle a performance issue, then some additional coaching may be in order.
However, while getting managers to address people management issues is critical to organizational performance, it is equally critical to ensure managers understand the boundaries of their decision-making authority. You may want a manager to play an active role in developing merit increase recommendations and managing performance, but should they set a hiring salary on their own? In defining performance expectations for managers, you should be equally clear about when they need to consult with HR or defer to corporate policies.
In the end, building a high performance culture calls for attention to how HR programs are designed and implemented. But organizations that are serious about inspiring employees to deliver their very best need to take steps to ensure that managers — a vital link in the chain — are engaged in being the best leaders they can be.
Claudine Kapel and Mairéad MacLure are consultants in Towers Perrin’s Rewards and Performance Management practice in Toronto. Claudine can be reached at (416) 960-7515. Mairéad can be reached at (416) 960-7715.
The recent study, The Towers Perrin Talent Report: New Realities in Today’s Workforce, indicates that managers play a critical role in helping organizations to retain and engage employees. The study finds, however, that employees give their managers two thumbs down when it comes to inspiring them to do their best work.
When it comes to compensation issues, only 18 per cent of more than 6,000 workers polled gave their managers a passing grade for recognizing and rewarding good performance.
HR practitioners have an important role to play in helping managers deliver results through their people. A solid performance management system that links effectively with compensation programs is a critical starting point. Are managers clear about their role in defining performance expectations? Do they know how to provide timely and meaningful feedback to their employees? Do they understand how to create links between performance and rewards? Are they involved in the process of determining how their employees should be rewarded? Do they know how to recognize and motivate high performers? Do they know how to tackle performance issues?
In organizations where managers are actively engaged in optimizing employee and organizational performance, performance management is a way of doing business, rather than an annual “event.” There is a clear goal-setting process that aligns individual performance objectives with broader business goals. In such an organization, employees understand what is expected of them. They understand how they can make a difference, regardless of their role or organizational level. And, they understand how their contributions will be rewarded.
Most organizations have a variety of vehicles in place that can be used to create meaningful links between performance and rewards — from base pay increases, incentive awards and stock options to development opportunities, promotions and non-monetary recognition. However, the best designed HR programs and processes will fail to live up to expectations if managers aren’t somehow engaged in utilizing them effectively.
To that end, organizations can take some important steps to ensure managers are delivering effectively on their critical people management accountabilities. These include:
•revisiting the design of pay and performance management programs to test for issues that may be hindering their implementation;
•providing managers with training and support tools to ensure they understand how the programs operate and what is expected of them, both in terms of performance management and rewards management; and
•ensuring managers understand their people accountabilities to ensure they understand the scope of their decision-making authority.
Many organizations acknowledge that their performance management systems are far from being “best in class.” They also acknowledge that their managers don’t always do a good job of differentiating rewards based on performance. A key first step in moving towards a more performance-based culture is to get feedback from managers and employees alike on what’s working and not working. There could be design issues at play that are hampering the process. Perhaps the performance management process is too bureaucratic. Perhaps the incentive plan has too many measures — or people don’t understand the measures. If you haven’t audited your pay and performance management systems in a while, now might be the time.
Beyond design issues, another potential — and frequently overlooked — barrier to effective manager engagement is the lack of training and support on company-specific programs. While managers are often provided with general training on leadership or managing performance, all too often organizations fail to explain the workings of their own programs. As a result, managers may not be clear on how certain programs actually operate — or their role in program execution. This, in turn, will undermine how well managers communicate with employees about matters such as performance expectations, or how results will be rewarded. It will also undermine the quality of decisions made around issues such as compensation and employee development.
Further, the process of managing performance and linking results and rewards sometimes requires managers to make tough or unpopular decisions. Managers need ongoing training and support to ensure they utilize programs — particularly those related to pay — effectively. This includes training and support on how to address performance issues and how to effectively communicate around performance and reward issues so that messages to employees — including the tough ones — are delivered in a clear and consistent manner.
A good way to test how well things are working in your organization is to examine the distribution of performance ratings, merit increases and incentive award ratings. If managers are recommending the same ratings across the board, or if they’re reluctant to tackle a performance issue, then some additional coaching may be in order.
However, while getting managers to address people management issues is critical to organizational performance, it is equally critical to ensure managers understand the boundaries of their decision-making authority. You may want a manager to play an active role in developing merit increase recommendations and managing performance, but should they set a hiring salary on their own? In defining performance expectations for managers, you should be equally clear about when they need to consult with HR or defer to corporate policies.
In the end, building a high performance culture calls for attention to how HR programs are designed and implemented. But organizations that are serious about inspiring employees to deliver their very best need to take steps to ensure that managers — a vital link in the chain — are engaged in being the best leaders they can be.
Claudine Kapel and Mairéad MacLure are consultants in Towers Perrin’s Rewards and Performance Management practice in Toronto. Claudine can be reached at (416) 960-7515. Mairéad can be reached at (416) 960-7715.
