The outcome of the ANCs long-awaited KwaZulu-Natal conference was a win for the Thuma Mina crowd. (Delwyn Verasamy/M&G)
Top performing employers are choosing a simpler and less formal process of reviewing performance that puts greater emphasis on coaching opportunities, ongoing dialogue, employees’ abilities to collaborate and the impact they have on their team, according to the Performance Management Report published by the Top Employers Institute. The study is based on a global HR Best Practices Survey among 600 companies in 99 countries.
High performing employers are opting for more transparent goal setting and regular feedback — 91% of the organisations that qualify for the Top Employers certification now consistently re-align performance goals during the year in response to changing business needs.
David Plink, chief executive of the Top Employers Institute, says: “A key finding of our study is that performance management has evolved from an annual event with rigid objectives to a transparent process of continuous dialogue, with flexible goals, that is more embedded in day-to-day operations so it can better deal with change. Companies that become Top Employers redefine performance as the ability to collaborate and contribute to the success of a team. We are definitely on the verge of a paradigm shift in the way we look at performance management.”
Previously the focus of performance management was on the individual and individual tasks. But as many companies foster a more connected and team-based working culture, key capabilities are now social awareness, agility and flexibility. Top performing companies aim to assess the effectiveness of employees in the broader work environment. Consequently, Top Employers are increasingly encouraging their teams to be more involved in their own performance management, so they can feel in control of their own progression. In South Africa, 84% of the participating organisations take the input of colleagues into account for the performance evaluation.
While employers consider it important to measure performance, current processes are viewed as too complex and over-engineered, reliant on rating scales. The survey shows a trend for employers to offer coaching and development opportunities, rather than rankings.
Microsoft, a certified Top Employer, has completely overhauled its existing approach by removing all ratings in favor of a new, conversation-based approach to performance. Lisa Dodge, director of global performance programs at Microsoft, said: “Traditional performance management was not going to get us where we need to go. We redefined performance as the actual impact an employee has on a team, business or customer.”
Finally, the survey reveals how overall performance management objectives are changing; highlighting a weakening link between the traditional application of individual performance management practices relative to employee compensation i.e. 10% of Certified Top Employers still do this. A rigid link between performance and pay emphasises individual performance; and remains a historically applied practice in many organisations. However, it’s not necessarily effective in helping the employee connect their own performance to that of the team or organisation.
The full Performance Management Report is available on hr-insights.top-employers.com/report-summary-performance-management