What Your Performance Management System Needs Most
29/04/2013
What Your Performance Management System Needs Most
Gallup Business Journal: businessjournal.gallup.com
What Your Performance Management System Needs Most
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A company can have a world-class system in place -- but it's only as effective as the managers who implement it by Megha Oberoi and Paresh Rajgarhia
Performance is the true litmus test for survival in the marketplace. High-performing employees contribute superior performance, giving the companies they work for a competitive advantage -- and their extra effort differentiates great organizations from merely good ones. It's crucial for businesses to have systems in place to identify, recognize, reward, and retain their top performers to achieve sustainable growth. Most companies understand this and spend enormous sums acquiring a performance management system to help ensure their success. Yet wide variation in employee performance persists despite this investment. An effective system should encourage collaboration, teamwork, and communication.
To investigate why this variance occurs, we reviewed employee engagement data from one of the most significant emerging economies -- India. Our analysis included data from more than 50,000 employees working in 10 major industry sectors in 22 global companies. We learned that more than half of the employees (54%) felt that their company's performance management system was not effective. This perception is likely to demotivate employees, creating feelings of anguish or frustration that negatively affect their performance, which ultimately defeats the whole purpose of designing and setting up an effective system in the first place. We also wanted to discover why the same system was viewed differently by different employees -- and why some found the system to be effective while others didn't. To determine the elements of an effective performance management system, we asked members of the human resources function in the 22 companies: "What makes
What Your Performance Management System Needs Most
Gallup Business Journal: businessjournal.gallup.com
What Your Performance Management System Needs Most
Share
A company can have a world-class system in place -- but it's only as effective as the managers who implement it by Megha Oberoi and Paresh Rajgarhia
Performance is the true litmus test for survival in the marketplace. High-performing employees contribute superior performance, giving the companies they work for a competitive advantage -- and their extra effort differentiates great organizations from merely good ones. It's crucial for businesses to have systems in place to identify, recognize, reward, and retain their top performers to achieve sustainable growth. Most companies understand this and spend enormous sums acquiring a performance management system to help ensure their success. Yet wide variation in employee performance persists despite this investment. An effective system should encourage collaboration, teamwork, and communication.
To investigate why this variance occurs, we reviewed employee engagement data from one of the most significant emerging economies -- India. Our analysis included data from more than 50,000 employees working in 10 major industry sectors in 22 global companies. We learned that more than half of the employees (54%) felt that their company's performance management system was not effective. This perception is likely to demotivate employees, creating feelings of anguish or frustration that negatively affect their performance, which ultimately defeats the whole purpose of designing and setting up an effective system in the first place. We also wanted to discover why the same system was viewed differently by different employees -- and why some found the system to be effective while others didn't. To determine the elements of an effective performance management system, we asked members of the human resources function in the 22 companies: "What makes