Performance management gets a bad review

By Claudine Kapel

How many managers in your organization look forward to conducting annual performance evaluations?

If you sometimes find it challenging to get managers on board with the process, you’re probably not alone. And if you yourself have some concerns about the value or effectiveness of your organization’s performance management process, you probably have a lot of company here as well.

In fact, a recent survey found only 55 per cent of human resources professionals feel annual performance reviews deliver an accurate appraisal of employees’ work.

In the survey, conducted by the Society for Human Resources Management and Globoforce, HR professionals raised a variety of concerns about their performance evaluation process.

• Only 58 per cent felt employees are rewarded for their job performance.
• Only 50 per cent felt managers or supervisors effectively acknowledge and appreciate employees.
• Only 29 per cent felt employees are satisfied with the level of recognition they receive for doing a good job at work.

So what is it about performance management as a process that garners such bad reviews?

Part of the challenge is that organizational budgets for salary and wage increases have been lean in recent years. When your budget for pay increases hovers around three per cent, there aren’t a lot of dollars available for recognizing performance. And the more organizations seek to spread those dollars around, the less there is available to recognize and reward top performers.

But does that mean performance management has lost its value as a process?

If your organization sees performance management as just a vehicle for supporting pay decisions, then the process has probably always delivered limited returns.

If your organization, however, sees performance management as a vehicle for forging stronger links between employees and the business itself, then abandoning the process isn’t really a viable option. Instead, the focus should be on finding ways to make the process more meaningful.

That may require a thorough review of your current performance management practices to identify opportunities for improvement. Here are some actions to consider:

• Ask managers what challenges they face when managing performance. What could the organization be doing better to support them in their roles as people managers?
• Look at your historical practices with respect to connecting pay and performance. Even in times of lean merit increase budgets, are there opportunities to deliver more significant rewards to top performers relative to average or low performers?
• Ask employees for their perspectives on how they are currently recognized and what they would value. Are there opportunities to enhance employee recognition across the organization? Would managers benefit from coaching and training around employee recognition?

It is easy to find fault with contemporary performance management practices and illustrate how they are falling short of the mark. But conversations about where the organization is going and how employees connect to that journey form the cornerstone of corporate performance.

So perhaps the objective shouldn’t be to eliminate performance management as a process, but rather to acknowledge that it needs its own performance improvement plan.