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Taking a Fresh Look at Performance Management

Juliet Lo
|Sep 18|magazine15 min read

HR technology expert Juliet Lo and Head of Product Marketing at Glint explains why monitoring employee engagement should be high on managers’ lists

When used wisely, performance management is a powerful motivation tool for providing a shared understanding of how individuals can develop and contribute to an organisation’s goals – but somehow it seems to have slipped off the rails. 

According to the CIPD, performance management is about “creating a culture which encourages the continuous improvement of individuals’ skills, behaviours and contributions to an organisation”. It outlines this as a core part of the relationship between staff and managers. Unfortunately performance management systems don’t seem to be living up to this dictum.

A 2017 study by global human resources consultancy Mercer found that 95% of HR managers surveyed were dissatisfied with their company’s performance management system. In addition, 90% of heads of company HR said they felt their performance management systems did not yield accurate results.

When performance management systems aren’t helping HR departments to improve employee performance, something is very wrong. At the same time, performance management is directly affected by employee satisfaction at work, which at present is put squarely at the feet of HR managers. To improve performance, the C-Suite needs to take greater ownership of creating the right culture and experience that allow their employees to thrive in their organisation.

Improving the process

If companies want to compete in today’s digital economy, they have got to attract and retain the right talent. It is therefore little surprise that employee ratings have been linked to the financial performance of an organisation. Researchers at the University of Kansas revealed a statistical link between employee satisfaction and the actual market value of companies. For each company’s overall rating on Glassdoor they saw a 7.9% jump in the market value of the company. The study concluded that: “Our results suggest that corporate culture, as assessed by employees, helps predict subsequent firm performance.”

We carried out research at Glint and uncovered the same trend: public companies in the the top quartile of Glint employee engagement scores achieved 42% higher 52-week change in stock value over companies in the bottom quartile. It appears obvious from this that a positive company culture and employee engagement can help to fuel business success.

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The importance of taking action on feedback

Where managers have put action plans in place using Glint’s software, we have seen engagement scores improve by a staggering 7 points in three months, relative to other managers within the organisation.

These action plans revolve around employees acknowledging they are being heard and there is also a commitment to address any issues. This process starts by harvesting meaningful insight about the feelings of employees. This is where AI-powered software comes in, replacing outmoded annual surveys that offer up a lean set of information at best.

It is also important to highlight the team in this picture. We are seeing greater links between people, processes and technologies to complete tasks. As a result, team performance is just as important as individual performance in budgeting for training, for example.

The value of employee insight

Take security leader Synopsys which has shown how a shift in processes has optimised its HR resources. The company has provided managers with the tools to support employee engagement. This has moved the HR team from administrators and enforcers to coaches, supporters, and strategic planners. HR is now front and centre to its development roadmap.

Or email management specialist Mimecast, which is utilising an employee engagement platform that has allowed managers become an integral part of HR’s performance management processes – sharing both responsibilities and ownership.

Europe’s largest broadcaster, Sky, has gone as far as replacing its two annual cascaded surveys with a short survey and a real-time dashboard for managers providing a continual flow of intelligence. The discussion around engagement is now a continuous one in driving the broadcaster forward, thanks to this now crucial data source.

From these success stories we can see that performance management platforms are now strategically relevant in business plans and not a simple end-of-year tick box.

An informed future

We have seen that traditional ways of finding out how employees are engaging are often flawed. Technological innovation is changing the nature of the workplace and as a result we are seeing forward looking companies establish a new approach to employee engagement – one that gives them the agility today’s digital world demands.

Given the impact that an employee’s satisfaction on work has on their performance, getting the employee experience right is critical to keeping up with a rapidly changing business environment. A technology led approach focused on flexibility, development and continuous improvement should be a key part of every company’s digital transformation to develop much needed skills and retain valued employees.