What goes around, comes around. And what's coming around again is the reexamination of the performance review process.
Towers Watson took a look at how the enterprise is handling the review process these days, now that the economy has improved and finding good talent is becoming ever more difficult.
What Towers Watson found was that management is looking to past performance review advice to inform current practices.
For years, consultants have said the annual review doesn't cut the mustard. It becomes a kind of check-that-box affair where the boss lays out the good, the bad and the ugly about the employee's work, and the employee sits there patiently waiting to hear how much the raise will be.
The cutting edge thinkers today, Towers Watson said, are “replacing annual performance review cycles with more frequent employee and manager interactions, applying a more future-oriented definition of performance and potential, and implementing new technology.”That, the theory runs, will keep both boss and worker more closely aligned on getting the job done right, and will build a better relationship in the process.
Among the details turned up by the survey:
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63% of North American companies say their performance management programs are not effective
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74% say their managers and employees are dissatisfied with the process
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50% say workers and managers don't spend enough time on performance management
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92% are going to keep doing them in one form or another
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29% are either planning to or are considering eliminating them
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50% said they have either changed or eliminated the annual performance review cycle in favor of more frequent interactions between employees and managers, or are planning or considering this change
But will changing the process without changing the people involved work? Not necessarily. Check this out:
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64% of respondents don't believe their managers and supervisors have the necessary skills to conduct a decent performance evaluation
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56% report a lack of effective feedback
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51% think managers don't have the time to do performance management well
“For many organizations, performance management as we know it today is not working. These programs haven't delivered on their promise to improve performance, and there are widespread signs of frustration among managers and employees,” said Laura Sejen, a managing director in the Talent and Rewards practice at Towers Watson.
“Employers recognize the importance of these programs and that significant changes, not tweaks, are needed. That said, most employers believe scrapping performance management programs, including the use of performance ratings, is not the solution.”
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
