Employers looking to improve their performance management processes should “crowdsource” feedback, CEB HR advisory leader Aaron McEwan says.
“Managers have more direct reports than they did three years ago – in fact, 50 per cent more – so the average manager’s dealing with a larger team, with people spread out in different geographies and different time zones, and they’re often doing work that the manager technically doesn’t have a background in,” McEwan told HR Daily.
“You can see that having managers as the sole source of truth for performance and feedback isn’t going to work as the world gets flatter in terms of structures, and more matrixed and leaner as well.”
The result is a trend towards employers identifying the individuals who have “the best visibility of an employee’s contribution” and involving them in the feedback process.
Managers are then able to consider more diverse feedback that goes beyond performance against KPIs, for example, to an employee’s contribution to other people and teams.
“We need to look at contribution, not just how well somebody met the individual tasks,” McEwan says.
He adds that employers should think twice before ditching performance ratings.
Although many employers believe employees will be happier, more engaged, and have more meaningful conversations about performance without the pressure of a numerical ranking, CEB has found most organisations that remove ratings experience a “significant” drop in overall engagement.
“We also found the frequency of conversations dropped, and so did the quality of those conversations as reported by the employee,” McEwan says.
And the biggest impact, he says, was on the highest performers. “Their engagement and satisfaction dropped comparatively more than the general population of employees… The average organisation that removed ratings experienced a 28 per cent drop in productivity of their highest performers, and really, that’s something that no organisation wants to experience.”