- Little in the design and execution of performance management has changed in the six years since Mercer last ran a survey on the subject, the HR consulting firm said in the release of a June global study. Responses from the 1,154 HR leaders in the study showed only 2% of companies feel their performance management system delivers "exceptional value," Mercer said.
- At the same time, Mercer indicated that employers aren't necessarily slow to realize there's an issue. Seventy percent of companies represented in the study said there should be a stronger link between performance management and other talent considerations. An empathetic approach by management may be key, Mercer said, citing its previous research that showed so-called "thriving" employees are four times more likely to work for a company that understands their unique skills and interests than their "non-thriving" peers.
- Mercer said its research found no fool-proof solution for managing talent in the future, but it did identify four best practices: 1) showing employees how their goals fit into the company’s goals; 2) connecting performance feedback to employees in a personalized way; 3) creating a feedback culture that is fair and presents meaningful information about performance; and 4) integrating performance management with business priorities.
By several accounts, the annual review model of performance management is losing steam with employees in myriad studies that favor more frequent feedback delivered in less structured formats. Experts who have previously spoken with HR Dive aren't necessarily ruling out the annual review entirely, but instead have emphasized that no single model can play to the preferences of every employee.
Mercer isn't the first to conclude that standard performance management approaches have failed to raise workers' productivity. A Deloitte report released in April criticized such approaches for subjectivity and failing to focus on future improvement rather than on past performance, among other things.
Emphasizing a two-way approach might help managers better conduct the feedback process. Collaboration may be an important element of such processes as younger generations grow to encompass a larger share of the workforce. Managers also need to be trained on the structure of such strategies in order for them to be effective.