Has something gone wrong with Performance Management — that branch of Human Resources that the HR body the CIPD defines as: “the activity and set of processes that aim to maintain and improve employee performance in line with an organisation’s objectives”?
In 2017, the world’s largest human resources consulting firm, Mercer, attempted to address that question in its regular global compensation planning and Performance Management study. Its researchers found:
- 95% of managers contacted said they were dissatisfied with their organisation’s Performance Management system.
- 95% of HR leaders were convinced that the system they were using did not yield accurate information.
- Nearly half (48%) of managers polled admitted their Performance Management system would need further work to be effective.
- A rather woeful 3% of those researchers spoke to, believed it was delivering them “exceptional value”.
Positive changes to stock value
The practices and systems we’re using to try and help our staff achieve what we want them to achieve are not really delivering. A key component of Performance Management that’s missing is truly listening to what your employees need to be happier and more successful. Unfortunately, much of the ownership and accountability for employee satisfaction has ended up with one part of the average organisation — HR, and that’s not going to be sufficient.
After all, if you want to survive and thrive in today’s ultra-competitive talent market, you have to be thinking in a more structured way about what your team feels. There’s a growing body of research to support this insight: researchers at the University of Kansas found that for each 1-star increase in a company’s overall rating on Glassdoor, you get a 7.9% average jump in the market value of a company. This extensive study of a million employee ratings on the same job site, shows that employers who experience improvements in their Glassdoor ratings significantly outperform companies with declining ratings.
We did some research on this at Glint and discovered the same trend: public companies within the top quartile of Glint employee engagement scores achieved 42% higher 52-week rise in stock value over companies in the bottom quartile.
There’s clear evidence that a positive company culture and employee engagement are linked to business success. If you start doing employee engagement better, you also make your environment a more attractive place to work. High Glassdoor ratings are strongly linked to high employee engagement score drivers. Organisations in the top quartile of Glint scores have, on average, 35% higher Glassdoor ratings (4.2 vs 3.1) than those in the bottom quartile. CEO approval ratings are also 27 percentage points higher (93% vs 66%) than those in the bottom quartile — securing a very enviable 87% ‘Recommendation’ rating among employees.
When managers can take action, results are immediate and impressive
Invariably, those high scores circle back to employees convinced their employer offers them space for personal growth and career potential. Highly engaged employees like where they work, so work harder and are more creative. This, in turn, drives higher overall productivity and company success. So what’s going wrong with Performance Management, and why isn’t that really delivering enough value to employers?
Our data shows managers outside HR, including the C-Suite, need to take more part in supporting employee engagement. This is not happening enough, and if it is, it’s not taking place in a consistent enough way.
Why? The data that managers need to do this job isn’t being shared properly. Most organisations do not empower their managers with this information. This is senseless, because the data shows that when managers are so empowered and can take action on feedback, their teams experience significant improvements in engagement within just one quarter — the start of delivering those beneficial Glassdoor effects firms want.
So, what is an action plan in this context? It’s what happens when employees say something that’s heard and recognised, a commitment to fix any issues is made and the manager takes concrete action against those issues. Indeed, we see engagement scores improve by 7 points within three months where managers created an action plan using Glint’s employee engagement software (relative to the average manager in the same organisation).
That process begins in most cases with a long-overdue fix of the way employee sentiment is captured in the first place. Surveying has too often meant a grim annual process that never cascades any useful intelligence down in time. This is where AI-powered modern software can help.
Real-world examples
We have witnessed the proof points. When team members believe action will be taken as a result of their feedback, they are eight times more likely to say they are engaged. Let’s consider a few short use cases to show what this looks like in the real world.
Application security leader Synopsys, among the top 20 software companies in the world, decided that non-HR managers lacked the tools to quickly act locally to help staff. However, in just six months of using manager empowerment techniques and software, employees felt managers were listening. When asked whether they believed actions would be taken as a result of feedback, the answer went up by 10 points across the entire organisation.
For Synopsys, the new surveying process for the company’s HR team meant their roles evolved from administrators and enforcers to coaches, supporters, and strategic planners.
At the UK division of email management specialist Mimecast, its head of HR told us that prior to installing the modern employee engagement platform, “We didn’t have a lot of information available for managers to use in order to feel like they could engage in that process.” That was recognised as a real issue as the company leadership also believes that, “Employee engagement is a shared responsibility and managers have to have a strong level of ownership in that process.”
How was this turned round? By using modern employee engagement tech to create a wholly new way of asking staff what they feel and driving continuous feedback and improvement. A great bonus is that a special new company-specific ‘Career Competency Model’ has emerged that helps its managers help their teams carve out their career paths, a tool created almost 100% from insights derived from its new, super-frequent team surveys.
Another example is Europe’s largest broadcaster Sky. It has stopped using outdated ways of capturing employee engagement levels and is improving its Performance Management stats. It replaced its old annual 45-question top-down cascaded results process with two annual surveys, which have just 19 questions and include a real-time dashboard for managers to quickly explore results. The conversation at Sky about engagement is now year-round, leading to changes in manager empowerment. The CEO has gone on record to state that Glint is the “single most important data source” his leadership team has access to. Sky’s CEO has said to his line of business managers that they now have the power in their hands to change the company with this data.
Meanwhile, a final example, in our own parent organisation LinkedIn, has found that better employee engagement approaches helped it manage the transition following an acquisition. LinkedIn became part of Microsoft in 2017, but by using employee engagement recommended tactics and tools it returned to pre-acquisition engagement levels within just eight months, versus the typical global average of 36.
I hope you agree that these are compelling success stories — success stories about how a new approach to employee engagement can quickly boost managerial access beyond HR to effective ways to listen to and help their teams — and so finally ensure Performance Management is working smoothly, and delivering a happier workplace and a more profitable environment for everyone.
The author is Head of Product Marketing at employee engagement leader Glint, now part of LinkedIn
Glint is the people success platform that leverages real-time people data to help global organizations increase employee engagement, develop their people, and improve results. Leading brands like United, Intuit, and Sky leverage Glint’s unique combination of intuitive design, sophisticated analytics, and actionable intelligence to help employees be happier and more successful at work. For more information, please visit www.glintinc.com.
