How Well Are Managers Really Evaluating Their Employees?

Associate editor of Entrepreneur magazine Kathleen Davis highlights the key findings of Mercer’s latest Global Performance Management Survey on employee performance evaluation. According to the survey, even though most leaders have a performance management system in place but more than half of them do not align performance ratings and compensation decisions.

More than a thousand organizations in 53 countries are surveyed and the results are as follows:

Mixed Marks for Performance Management:

According to the survey, organizations today still struggle to establish effective performance management programs. Even though they have the programs in place, but only 3 percent said that their program provides exceptional value. 48 percent said their performance management program needs work and 49 percent said their performance management program is working well.

Philosophy – Yes, Performance – No:

Organizations said they adhere to a pay-for-performance philosophy but only a few among them measure the alignment between performance and compensations decisions. 89 percent said they link performance and pay-decisions. 42 percent actually measure the alignment between performance and compensation decisions.

Manager skills top the list:

Participants in the survey said that people-manager skills are critical to accomplish desired results yet only a few of them grade their managers as “highly skilled” in certain categories. 14 percent said their managers are highly skilled in holding formal performance evaluation discussions with employees. 8 percent said their managers are highly skilled in setting “smart” goals. Another 8 percent said their managers are highly skilled in linking individual performance to actionable development planning.

Forced distributions has some fans:

One-third of the respondents globally said their organizations use forced or guided ratings distributions. 5 percent said these practices improved the effectiveness of pay-for-performance programs. Portugal (62%), India (61%) China and South Korea (58%) are the highest users of forced distribution. Whereas, US (15%), Australia (13%) and Italy (11%) are the lowest users of forced distribution.

Do executives lead by example?

Executive commitment has a strong impact on performance management success. The survey showed a mixed reading in that regard. 78 percent executives hold one-on-one performance discussion. 62 percent hold formal performance planning discussion. 50 percent holds their team accountable for performance management success.  43 percent provides regular coaching/feedback and 35 percent regularly talks about performance management.

 

Read More details in Entrepreneur magazine

 

What do you think about Mercer’s survey results? Join the discussion. Leave a comment below.

About the Author Bill Ringle

Bill Ringle is a CEO, former Apple exec, published author, and angel investor. Through Grow Business Now, he offers strategies and tools to elevate growth for executives and entrepreneurs from more than 46 industries. Bill has conducted nearly 200 podcast interviews on My Quest for the Best, where industry and business leaders share their secrets to success.

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