The death of the annual appraisal has been written about for more than a decade, but rather like cockroaches in a nuclear apocalypse, they are still clinging to life. They persist in a significant number of organisations, where senior leaders retain a traditional view of the role of managers and the workplace, and are reluctant to change. They see it as a management tool to control the workforce and weed out those that are underperforming.
For some, performance management is something that employees do rather than senior leaders; they are too busy or above the process. They fail to see how it relates to them and how it can be important for their role. There might also be a reticence to have their own performance scrutinised.
If performance management is to flourish in an organisation, these views need to be countered with compelling arguments that show them that there is far more to the process than a single, annual meeting. At its best, performance management can positively impact a whole host of different areas and have a significant impact on the bottom line.
How can you challenge senior leaders’ perception?
To encourage senior leaders to see performance management with fresh eyes and appreciate all the benefits it offers, you need to frame it in a different way. This can be done by linking it to the issues that are on the top of their agenda. By showing how it relates to other parts of the business, you can show how integral it is to ensure employees feel valued, challenged and heard.
The top five benefits of performance management that senior leaders need to know about
While effective, relevant and continuous performance management can provide a whole range of positive benefits, here are the 10 that are most likely to make your senior leaders sit up and take notice:
Increased employee engagement
Having enthusiastic, motivated employees who want to do a good job is something that every employer wants. Employees want to feel their role matters and it offers genuine value. This is especially important to the youngest generation in the workforce, who want to work in fair, inclusive environments.
Encouraging regular check-ins between line managers and employees gives employees a chance to ask for assistance, request training and make sure they know exactly how they are contributing to the success of the business.
Key fact: Employees are three times more engaged when they receive regular feedback from their manager as opposed to feedback just once a year.
Anyone who has ever watched The Boat Race will have seen for themselves the importance of the cox keeping the eight oars’ people in time. If one gets out of step, it can have a catastrophic effect on the rest of the time. Effective performance management is like the cox, keeping employees pulling in the same direction.
By setting employees goals that relate to the overall strategy of the organisation, it ensures they know exactly which tasks to prioritise and ensures their efforts are contributing to the overall success of the business.
Key fact: Employees who know how their goals connect to the larger mission of their organisation are more inspired and 10 times more likely to feel motivated.
Enhanced employee development and advancement
With many employers still struggling to find people with key skills, it makes sense to place an emphasis on training and developing their existing employees. Developing people from within ensures better succession planning and helps to close the skills gap.
Through regular reviews, managers can identify which areas employees want to develop and how they would like their careers to progress. With this information, career plans can be created, so employees can see the opportunities that exist for them within the organisation.
Key fact: 94% of employees say they would stay longer with their employer if they invested in their learning and development.
Creates a positive culture where employees want to work
With so much of their waking hours spent working, employees want to look forward to that time rather than dread it, working with people who respect and appreciate them. Developing a supportive environment that encourages employees to be honest and open if they are feeling overwhelmed, is becoming increasingly important.
Regular check-ins between employees and line managers, allows problems to be spotted quickly and solutions to be put in place before they spiral out of control, supporting improved workplace wellbeing and helping to build mental resilience.
Key fact: 60% of employees say they’d feel more motivated and more likely to recommend their organisation as a good place to work if their employer took action to support mental wellbeing.
Highlights when employees are struggling and allows something to be done about it
No one comes to work wanting to do a bad job. However, sometimes they may not be able to perform at a level that is required. If an employee is not up to scratch, there could be a host of reasons for it – a lack of training, issues outside the workplace, a poor relationship with someone in their team. Hoping the problem will go away is rarely the right answer.
Encouraging managers to address poor performance early can save a lot of time, resources and energy. It will show if the problem can be fixed or, if sadly, the employee is not suited to the position. Having a realignment check will identify the issue and ensure a plan is created to rectify it.
Key fact: The cost of a poor performer can be at least 30% of the employee's first-year expected earnings.
All these areas – engagement, alignment, development, culture and performance – are ones that senior managers pay close attention to. By demonstrating how these can all be improved through effective performance management, you can begin to get senior leaders onboard.
To help you shift perceptions further, we’ve developed a guide that highlights the rationale in greater depth and also a business case template to help you put your argument in a coherent way. Hopefully these will help you demonstrate performance management is an essential business tool that your business can’t afford to do without.