SALT LAKE CITY--(BUSINESS WIRE)--Many organizations struggle with having an effective performance management system. Research has shown that performance reviews result in negative outcomes more than 30% of the time. As a result, some organizations have abandoned traditional appraisals and others have eliminated rules altogether and let people govern themselves. Every organization needs to find a middle ground because performance management, in some form, is here to stay, while at the same time there is a clear mandate for change.
“When a performance management system is done well, there are positive outcomes,” said Jack Zenger, CEO of Zenger Folkman, “With no system in place, feedback between leaders and employees is less frequent or often non-existent. Organizations need systems that set objectives and define work plans. Compensation requires an underlying rationale for its administration. Additionally, the periodic appraisal provides legal protection for the firm in cases of demotion or termination. Even more importantly, employees want feedback on their performance and need to know how they can improve performance and further their career.”
Zenger Folkman research has shown some key elements that can improve the quality of any performance management system.
- The system must be accurate and fair.
- The system must be efficient. The program must be more than a “box checking” process or a flurry of paperwork. Bottom line, it should improve the way that people perform.
- The system should elevate performance; not just measure against lower limits. An effective system should clearly link the individual’s performance to the organization’s strategic objectives and current initiatives.
- Compensation decisions should be a by product of performance management.
- The system should use multiple data sources. When the manager’s view is augmented with two peers and two subordinates, rater bias is erased, allowing the system to evaluate performance accurately.
- The process should include formal development on coaching skills.
“Performance management needs to be remodeled, not thrown away,” said Zenger. “It should encompass new processes that take advantage of more than the immediate bosses’ views and that emphasize the future more than the past. To succeed, the remodeling should preserve the positive elements of past systems, eliminate the major problems of current processes, and meet the objectives of a more modern and effective approach for achieving performance management goals.”
To learn more ways to improve your performance management system attend Jack Zenger and Joe Folkman’s webinar, Redefining Performance Management: How Celgene and General Motors Are Approaching the Challenge, on Wednesday, Feb. 22, 2017. For more information on these findings, and how to incorporate them into a leadership development plan, visit www.zengerfolkman.com.
Zenger Folkman exists to develop better leaders. We research leaders from all over the world and create insights that are delivered to individual leaders in a personal and constructive way. These scientifically derived insights include prescriptive actions that become measurable business results. To learn more, please visit our website: www.zengerfolkman.com.