Performance reviews don’t have to be in the too hard basket

BDO GISBORNE ADVISERS: Linda Paulson (left) and Carol Shepherd are human resource advisers at BDO Gisborne. They say performance reviews do not have to be put in the too hard basket. Picture by Liam Clayton

HOW many of your employment agreements have a standard clause “your performance will be reviewed annually?”

That would be nearly 100% of the ones I see.

Yet who checks that you have done what your agreements say you will do?

Most of the people we see simply put it in the “too hard basket” and either never get around to doing it or treat it as a “tick the box exercise” without actually spending much time on the appraisal itself.

Let’s face it, performance reviews are often a painful experience for your entire organisation — owners, managers and staff alike.

Most managers find the approach to be ineffective. There is little guidance on how to coach and develop their employees, people shy away from the difficult conversations, while time is often wasted chasing down managers and employees to submit their paper-based reviews.

Yet they need to be done. Performance management works hand-in-hand with every other phase of the employee life cycle — learning and development, succession and even recruiting as existing performance competencies of star performers can help you define criteria for new employees.

Creating a true performance culture also drives engagement, retention and profits. In a Harvard Business School study, organisations without a performance culture increased net income by only 1% over 11 years, but those with one saw a 756% increase over the same period.

At the speed of business today, organisations risk disengaging and potentially losing their top performers without a performance review strategy and effective review automation.

Here are three reasons to help you make the case for creating a performance management culture —

  • Organisations without a performance management strategy waste up to 34 days each year dealing with underperformers. Managers spend 13 percent of their time managing those poor performers and 14 percent correcting their mistakes.
  • High performers only compose 5 percent of your work force but produce 25 percent of your output.
  • Studies show frequent reviews are a key factor in engagement and retention. Forty-three percent of highly-engaged employees receive feedback at least once a week. Yet many organisations still only do the cursory once-a-year review or sometimes pass over it altogether. Most employees (71 percent) prefer to get feedback as soon as possible.

If you were to tally the number of hours your organisation is spending on performance management (that is if you are managing performance at all), you would find that preparing the forms, holding the meetings, and creating the ratings and then completing the forms consumed many hours a year.

If you could source a system where you could somehow shift your investment of time from talking to yourselves to talking to your people about their performance and career development, wouldn’t that be beneficial?

Here at BDO, we think we have found the solution. We now work closely with Cornerstone OnDemand (a talent management company) and think that its Growth Edition not only simplifies and automates performance reviews, it gives managers practical tips ranging from how to navigate difficult conversations to creating effective development plans.

With these powerful analytics, HR and business leaders can transform performance data into deep insights, all with a click of the mouse and without endless reams of paper! Performance management becomes an ongoing conversation, not a periodic process.

Even if an automated solution is not for you, BDO Gisborne’s People & Performance team can assist you to find out more about how you can improve your performance management systems.

HOW many of your employment agreements have a standard clause “your performance will be reviewed annually?”

That would be nearly 100% of the ones I see.

Yet who checks that you have done what your agreements say you will do?

Most of the people we see simply put it in the “too hard basket” and either never get around to doing it or treat it as a “tick the box exercise” without actually spending much time on the appraisal itself.

Let’s face it, performance reviews are often a painful experience for your entire organisation — owners, managers and staff alike.

Most managers find the approach to be ineffective. There is little guidance on how to coach and develop their employees, people shy away from the difficult conversations, while time is often wasted chasing down managers and employees to submit their paper-based reviews.

Yet they need to be done. Performance management works hand-in-hand with every other phase of the employee life cycle — learning and development, succession and even recruiting as existing performance competencies of star performers can help you define criteria for new employees.

Creating a true performance culture also drives engagement, retention and profits. In a Harvard Business School study, organisations without a performance culture increased net income by only 1% over 11 years, but those with one saw a 756% increase over the same period.

At the speed of business today, organisations risk disengaging and potentially losing their top performers without a performance review strategy and effective review automation.

Here are three reasons to help you make the case for creating a performance management culture —

  • Organisations without a performance management strategy waste up to 34 days each year dealing with underperformers. Managers spend 13 percent of their time managing those poor performers and 14 percent correcting their mistakes.
  • High performers only compose 5 percent of your work force but produce 25 percent of your output.
  • Studies show frequent reviews are a key factor in engagement and retention. Forty-three percent of highly-engaged employees receive feedback at least once a week. Yet many organisations still only do the cursory once-a-year review or sometimes pass over it altogether. Most employees (71 percent) prefer to get feedback as soon as possible.

If you were to tally the number of hours your organisation is spending on performance management (that is if you are managing performance at all), you would find that preparing the forms, holding the meetings, and creating the ratings and then completing the forms consumed many hours a year.

If you could source a system where you could somehow shift your investment of time from talking to yourselves to talking to your people about their performance and career development, wouldn’t that be beneficial?

Here at BDO, we think we have found the solution. We now work closely with Cornerstone OnDemand (a talent management company) and think that its Growth Edition not only simplifies and automates performance reviews, it gives managers practical tips ranging from how to navigate difficult conversations to creating effective development plans.

With these powerful analytics, HR and business leaders can transform performance data into deep insights, all with a click of the mouse and without endless reams of paper! Performance management becomes an ongoing conversation, not a periodic process.

Even if an automated solution is not for you, BDO Gisborne’s People & Performance team can assist you to find out more about how you can improve your performance management systems.

Carol Shepherd is a senior adviser at BDO Gisborne with extensive experience in human resource management, operational management, organisational development, training and facilitation.

To talk about Cornerstone OnDemand performance systems or any other human resources matter, call either Carol Shepherd or Linda Paulson on 869-1400. To register for a free trial or personal demo use the following link: https://www.cornerstoneondemand.com/growth-edition/free-trial?partner_id=bdo-gisborne

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