98% Of Brands Think Performance Management Is Essential: Here’s Why
You’d think that if 98% of business owners interviewed in a massive nationwide study thought that performance management was essential, they’d be managing performance. You’d be wrong because only 64% say they have an effective strategy in place to track it. There are other worrying figures to add into the mix – according to Workhuman, 51% of employees feel performance reviews are inaccurate, and 53% say it doesn’t motivate them.
Before we get into statistical overload (there are many negative statistics), let’s dive into the effectiveness of performance management when it’s done right.
Micromanagement Is A No-Go
Micromanagement is when management gives excessive supervision to employees. What they’re essentially saying is – “you can’t do your job properly, so I’m going to watch your every move.” According to Trinity Solutions, 79% of employees said they’ve experienced micromanagement in the workplace, and 69% were considering leaving their roles because of it.
Traditionally speaking, micromanagement is a way of tracking performance – it’d be hard for managers not to if they’re involved with every part of their employee’s working day. But, we can confidently say micromanagement is officially a no-go because there are numerous ways to track performance that encourage employees to be more productive.
Micromanagement styles are reported to lead to stress, anxiety, decreased productivity, and even poor health and mental well-being. None of those is a recipe for productivity and success.
The following section explores the gold standard way of tracking performance.
Incentives Are A Must
What drives performance? Incentives. Rewarding employees on performance indicators is the perfect way to track productivity while not being overbearing – leaving it to the employee to manage their own performance and seek rewards. Effective employee reward and recognition are essential for top-level businesses or ones that wish to be high-performing – click here for a great example of a program.
The statistics speak for themselves. Did you know that disengaged employees who feel undervalued are 18% less productive and 15% less profitable for a business? But 78% of employees will work harder if they’re rewarded. It’s a natural human instinct; we work harder when we know there’s a reward at the end.
The Ongoing Benefits Of Performance Management
We’ve listed a few statistics that highlight the benefits of performance management, but what are the long-term benefits of rewarding performance?
Highlighting a need for additional training is one benefit – employees who aren’t performing at the same level as other employees might need additional support within their role. A Korn Ferry survey highlighted that 58% of employees feel their managers fail to help them advance in their role, thus supporting the need for performance management to highlight team members that need developing.
Benefits also include boosting morale. Performance management shouldn’t be entirely about identifying improvement needs – reviews should have positive feedback that supports the growth of employees. Using performance reviews solely for highlighting areas for improvement can be demoralizing and stressful.
Employee management is a finely tuned skill that, sadly, many businesses get wrong. Some companies like Spanx, Google, and Cisco get it right year after year. Spanx, for example, gave every employee two first-class tickets to anywhere in the world with a $10,000 spend. Not every business can go to that extreme, but small rewards go a long way with performance management.
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