My wife works for one of the largest financial institutions in the world. This weekend while she toiled away on writing mid-year performance appraisals for her direct reports I couldn’t help but think about how many managers view this activity as pure drudgery and just another task to check off their HR action item list. But it doesn’t have to be that way.
It’s true that performance appraisals, regardless of how frequently they are conducted, are a necessary part of the overall performance management process. However, the appraisal event itself does little (if anything) to impact the critical outcomes associated with an effective performance management process such as aligning individual and team/company goals, establishing clear accountability for performance, providing employees with formal coaching and feedback focused on improving future performance, and linking employee development plans to performance.
Unfortunately, most companies don’t seem to get it. According to a 2008 study conducted by Bersin & Associates, 80% of companies conduct annual performance appraisals, but only 57% of the nearly 1000 organizations surveyed have a standardized process for establishing goals for individual employees. In addition, less than half of the organizations studied align individual goals to corporate goals, link training to employee development goals or have formal coaching programs. What a missed opportunity!
Performance management should not be viewed as a once or twice a year “task” but instead as an ongoing, daily driver of business value. When the process is designed and implemented correctly it isn’t drudgery. When done properly it’s a key enabler for assisting managers and employees in achieving their business goals and a driver of organizational effectiveness.
Of all the core human resource processes in your organization, I would argue that performance management is the most important to overall productivity and business performance. Where does your organization stand? Do you have a clearly defined performance management process? If yes, how effective is it? How would your managers and employees answer that question? If you’re not getting the most from your process, I encourage you to take action to improve it. It can have a profound impact on the success of your organization.
