Is performance management living up to its purpose?
Only 8% of companies claim that their performance management process had been highly beneficial, while on the other hand, a hefty 58% claim it is a waste of their time. Only 28% of HR executives feel that this process accurately reflects the contributions of the employees. (Source) And the cost of poor management and lost productivity from employees in the U.S is $960 billion to $1.2 trillion per year, according to Gallup.
These numbers say that most existing performance management systems fail to deliver performance that drives desired results. Of the many reasons put forward as to the causes of these failures, one that stands out but often overlooked is culture.
What does culture have to do with performance? Apparently, a lot. A hierarchical, fear-entrenched or dull culture kills performance and makes talented employees leave their jobs.
To the HR executives, this is a big headache, a heavy anchor that prevents the organization from sailing forward and a burden that drains resources both human and financial.
Let us try to describe our workplace culture with more numbers.
• 72% - This is the national prevalence of workplace bullying in the US (source)
• 72% of employers deny that bullying is happening thereby condoning or explicitly sustain bullying
• <20% of employers take actions against incivility
• 21% is the turnover rate of nurses due to bullying (source)
• 60% of the nurses who had to leave their jobs claim that they did so because they have been a target of bullying
• USD 88,000 is the amount needed to replace a nurse
• 75% of the respondents of a study claim that disruptive behaviors resulted in medical errors with almost 30% of these errors leading to patient deaths
These statistics say that the culture of fear is no small matter at all. It destroys performance, drives talents away, and stifles the unleashing of great potentials and bright ideas in the organization. On the business perspective, it wastes resources and efforts that were invested on employee retention and engagement. Achieving ROI becomes a chase game for years.
The culture of fear resulting in poor performance is like continuously paddling a kayak but getting nowhere near your destination. The problem goes unsolved and is just becomes recurring over the years. There is a failure to reach out to employees in significant ways, hence the reason why ‘performance management’ gets much contempt.
HR is having a hard time getting to the root cause of it all. They look into the solution of changing line managers hoping that doing so can turn things around, only to find themselves in the same murky waters that got them all the troubles in the first place.
If changing managers does not solve the problem, why put the blame on them when performance is at an all-time low?
Managers have achievements and years of experience dealing with employees. They may have the most brilliant ideas and the most innovative of strategies, but they could not seem to get to the bottom of it all to improve performance. Why is this so?
Managers, however good and well-intentioned they are, could be severely limited in what they can do because they don’t have the right tools and solutions to lead their teams. It is such a waste changing leadership unnecessarily. Unknowingly, we may be throwing great talents away.
The link between culture, managers, and performance are plain to see, but when a gap still exists between organizational objectives and employee performance, the tools for performance management could be the missing link that is crucial to the organization’s success.
Look into management tools such as a 360-feedback system, a collaboration platform, and knowledge center that are readily accessible to all. Have a recognition system that infuses technology and gamification. Put in place a learning system that is on-going and stress-free. Open communication lines between managers and employees, and then consequently forward a solid foundation that would humanize the workplace.
For years, ManageUp has been lobbying to put emphasis on management tools before drastic and expensive measures of replacing managers are carried out. Give managers the tools which could empower them to unleash their team’s full potentials.
In performance management, managers are always a part of the equation, and they still are the key to driving performance. Provide them what they need to connect with employees. It could be the smartest move you take to keep them in the organization and have them bring to reality all organizational goals.