High performing employees can be what separates a good originator's business from the industry leaders. Research reveals the one key driver that can push employees to reach their performance potential.
Performance management systems are a crucial tool for firms to ensure employees are meeting expectations, and many invest a significant amount of time and money into developing effective processes. Despite this, a recent Gallup survey has found most are overlooking the one factor that can make or break any system - the people behind it.
In a recent Gallup survey, 50,000 employees in 10 major industry sectors rated the performance management system of their company - and the results were not encouraging: more than half of all employees felt that their company’s 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,” observed Gallup researchers Megha Oberoi and Paresh Rajgarhia.
But these statistics are not necessarily a reflection on the system itself, said Oberoi and Rajgarhia.
“Fundamentally, a performance management system is composed of process and people elements.
“Our analysis revealed that most companies invest in world-class processes for their performance management system, but they overlook the importance of the people element.”
By far the most important ‘people’ element, said Oberoi and Rajgarhi, is managers.
Upon asking the same employees to rate their managers, the researchers discovered an interesting correlation.
Seventy percent of employees who gave their managers "best" ratings rated their performance management system as "very good."
In contrast, only 2% of employees who rated their managers as "below average" gave their system a "very good" rating.
“A company might have a world-class performance management system in place, but the system is only as effective as the managers who implement it.
"Companies that want to increase organizational and employee performance and productivity should invest in getting the right managers in place and support them in engaging their employees.”
So what makes a great manager? Oberoi and Rajgarhi’s research showed the managers who rated the highest all exhibited four key traits:
Cearly communicated performance standards and what good performance in a role looks like
Focused on employee strengths rather than weaknesses
Helped employees understand that the purpose of the performance management system was to aid in their development; it was not just an activity required for pay or promotions
Communicated regularly with their team members on performance expectations, rather than once a year