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Top Leadership Perspectives on Performance Management

by AIMM MAITD

How important is your leadership team's support of the performance management system in your organization? Sibson Consulting's 2010 study into the attitudes of human resources professionals towards their appraisal systems sheds some interesting light on the value of top level endorsement.

Sibson Consulting teamed up with WorldatWork, an association of human resources people, in mid-2010 to survey HR staffs on performance management practices and the challenges they were facing in their organizations. The survey was conducted in a number of countries and with organizations ranging from just a few employees to large multinationals. From the 750 people that responded, we can draw a picture of the current state of performance management in organizations today.

To begin with, what are the key messages from the report? One maybe not surprising finding that shone through was the low confidence that human resources professionals had in the efficacy of their performance management processes. Although 91% of respondents reported that their organization had a performance management system in place, over one quarter (28%) said that their managers regarded the appraisal process as an administrative burden only.

Alarmingly, not even half of those surveyed (47%) saw their performance management system as helping their organization achieve its strategic objectives. In addition, less than one third (30%) reported their employees as trusting the system. Overall, less than half of all respondents (43%) regarded their performance management system as effective.

HR professionals reported three key challenges to making their systems more beneficial to their organization. They said that appraising managers lacked the courage to have difficult performance conversations with employees (63%). Secondly, they lamented that managers viewed performance management as a HR process not critical to business success (47%). Thirdly, they observed the poor goal setting skills of managers at the start of each employee appraisal cycle (36%).

In effect, only a little over one third of HR professionals thought that managers complete thorough performance assessments. Another one third of respondents openly disagreed. Not even half (46%) thought the system worthwhile considering the amount time expended in conducting and reporting the evaluations.

With such a dismal picture painted, what role is the executive currently playing in supporting the performance management system in their organization? The good news is that nearly three quarters of all survey respondents (74%) felt the support of senior managers for the system. Soberingly, that still leaves one in four organizations struggling with displaying confidence in their appraisal process at the top level.

With such widespread support from top management, why are organizations struggling with their performance management processes? Perhaps the answer lies in how the leadership team views the importance of their performance management system. According to the HR professionals surveyed, in only one third of organizations do the executive strongly or mostly consider the appraisal system business-critical. According to the respondents, the same number of executive teams consider the process a mostly pencil pushing exercise.

And perhaps it is this attitude to the system that prevents top managers' supporting words from being translated into real action. Only 40% of survey respondents reported seeing their leaders model the right behaviors. As a case in point, in only 65% of organizations did senior management require completed employee evaluations for all employees.

How important then is senior management's support for the performance management system in driving business results? The survey designers tackled this question by separating companies into quartiles according to shareholder value over a three year period. The survey authors found 87% of respondents working in the top quartile of companies feel their senior managers publicly support the performance management process. This contrasts with 66% of respondents working in the bottom quartile of companies feeling likewise. The margin between the top and bottom performers is not huge, but it is significant.

Of more significance is the difference in number that felt that their senior management team did not support the process. Here, only 3% of respondents in the top quartile reported the lack of top management support. Contrast this response with the 14% working in the bottom quartile companies. The implications are clear. Top leadership support is an important factor in the success of any performance management system. As this survey shows, HR professionals by and large enjoy that support. The next challenge for HR managers is to translate verbal support for the system into modeled behaviors.

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Copyright © Leslie Allan

About the Author
Leslie Allan

Leslie Allan is Managing Director of Business Performance Pty Ltd; a management consulting firm specializing in people and process capability. He has been assisting organizations for over 20 years, contributing in various roles as project manager, process consultant and trainer for organizations large and small.

He is also the author of five books on training and change management and is the creator of various training tools and templates. Leslie is a member of the Australian Institute of Management and the Quality Society of Australasia. He is also a member of the Divisional Council of the Victorian Division of the Australian Institute of Training and Development (AITD). Leslie may be contacted by email at office@businessperform.com

Leslie Recommends
Managing Change in the Workplace

Find out more about keeping employees engaged through times of change. Check out Leslie's resource kit, Managing Change in the Workplace. Its tools, exercises, techniques and tips cover every aspect of managing change. Visit the Managing Change in the Workplace information portal to find out how to download the free Introductory Chapter and start using this practical change management guide and workbook today.

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