Time for a rethink on performance management

Author: Liana Cafolla | Date: 9 Mar 2016

Employee disillusionment with appraisals is driving a shift in approach to assessing and improving performance

Almost half of employees in Asia-Pacific say that performance management processes are either ineffective or neutral, according to recent research from Willis Towers Watson. A lack of effective feedback, lack of time or skills on the part of supervisors and line managers, and lack of belief of managers and supervisors in the value of performance management processes are some of the reasons why employees are disillusioned with the process.
 
“Today, work is much more fragmented, complex and project driven than in the past,” says Dhritiman Chakrabarti, Asia-Pacific leader for rewards, talent and communication at Willis Towers Watson, whose 2015 Talent Management and Reward Pulse Survey measured performance management in Asia Pacific. “In this context, traditional performance management is outdated and irrelevant.”
 
In many cases, employers are measuring compliance rather than focusing on the effectiveness of their performance management programmes, he says. Almost 40 per cent of survey respondents said they measure effectiveness by the number of line managers who complete annual reviews on time.
 
So how can the process be improved? One way is to ensure employees’ voices are being heard, says Christine Wright, managing director of Hays in Asia.
 
“In employee engagement terms, the important factor in any feedback system – either an annual performance review or a more regular ongoing feedback system – is that your employee also has a voice,” she says.
 
Instead of telling staff what they need to do and leaving them to it, she says employers need to talk regularly to each staff member about their progress and priorities. ‘’This keeps staff productive and adding value to the organisation throughout the entire year.”
 
Setting performance goals is another important part of effective employee performance appraisals, she says. Goals should be limited in number and should include the steps that need to be taken to achieve those goals.
 
“Keep the number of goals to a reasonable number and make them easily measureable,” says Wright. “That way, when you come to review performance again, whether as a manager or employee, it will be an easier and clearer process for both parties.”
 
Employers need to step back and determine how they want their employees to affect results by asking whether employees are improving efficiency and customer satisfaction, says Chakrabarti. He suggests signs are emerging that employers are planning changes to how they measure performance, including assessing whether employees have the skills needed to power the organisation in the future and measuring performance achievement and future potential. Impact goals are also appearing.
 
“Impact goals take into account the impact an employee makes or the contribution she has on the broader organisation,” he says. ‘For example, is she contributing to the performance of another division? Is she leveraging the good work of others? Switching to this type of thinking signals a move away from a competition-driven culture to one characterised by more collaboration and sustained performance.”