Agile Performance Management Starts with a Deep Understanding of Employees

HR technology expert Juliet Lo explains why incentive managers who understand the role of engagement will drive better motivational programmes and significantly improve their team’s performance

Performance management might seem like a straightforward process, but it is essential incentive managers understand the human element in this equation if they are to build a successful motivational program for teams and achieve organisational goals.

Unfortunately, Performance Management, defined by HR professional body the CIPD as “the activity and set of processes that aim to maintain and improve employee performance in line with an organisation’s objectives”, appears to have taken a wrong turn.

In 2017, global human resources consulting firm, Mercer, examined the issue in its global compensation planning and Performance Management study. It found that a staggering 95% of managers were dissatisfied with their organisation’s Performance Management system.

The missing element: employee motivation

The stark fact is that the practices and systems we are using just aren’t fit for purpose. A fundamental part of Performance Management is missing, namely the human element around employee contribution, engagement and satisfaction. This is the element that makes employees feel happier at work and part of the organisation, and the component that enables incentive managers to build appealing incentive programmes that motivate higher performance by employees. Unfortunately, the control and accountability for employee satisfaction has ended up sitting with HR and this isn’t adequate.

To encourage teams to hit targets in the highly competitive digital economy, incentive managers must seek to understand what makes their teams tick. Researchers at the University of Kansas, for example, 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 major study of a million employee ratings on the same job site highlights the fact that employers who experience improvements in their Glassdoor ratings significantly outperform companies with falling ratings.

Our research at Glint uncovered the same trend: public companies within the top quartile of Glint employee engagement scores achieved a 42% higher 52-week change in stock value over companies in the bottom quartile.

This shows that companies who better understand the needs of their employees and have a positive culture are more likely to succeed.

Empower managers for accelerated results

Highly engaged employees are proven to be more productive and innovative, bolstering a business’s bottom line.

The fact of the matter is that until more non-HR managers get to be a consistent part of the employee engagement process, receiving feedback from their team members on every aspect of the employee experience such as onboarding, role changes, communication, resources, and manager support, the situation is unlikely to change.

Unfortunately, most companies don’t see empowering managers with this information as a big enough priority yet. Nor do they provide helpful guidance on how to take action on team feedback, which is short-sighted as this data is invaluable in driving incentive improvements.

In fact, we see engagement scores improve by seven points within three months where managers create an action plan using Glint’s software, relative to the average manager in the same organisation.

The reason why is simple. When employees believe they are being heard and commitment is made to try and address their needs, they feel more motivated and enabled to do their jobs better. This is where software can play a key role to connect Performance Management with Employee Engagement. By gathering and synthesising employee feedback into actionable recommendations for managers, incentive managers can take the necessary actions to improve both the engagement and performance of their teams.

The route to employee engagement

When team members believe action will be taken as a result of their feedback, they are seven times more likely to say they are engaged, compared to when they believe no action will be taken. This in itself is a huge motivational factor.

Take Europe’s largest broadcaster Sky, for example, which has stopped using outdated ways of collecting data on employee engagement levels in order to help managers take local action to support the success of their people. Discussion about engagement is now year-round and not down to an annual survey. Sky’s CEO has gone on record saying that its modern employee engagement platform is the “single most important data source” his leadership team has access to.

Proof that when organisations bring employee engagement insights into their Performance Management programmes, their incentive managers can keep employees motivated, productive, happy and loyal.

The author is Head of Product Marketing at employee engagement leader Glint, now part of LinkedIn