Despite its complexities, we decided to launch our first survey with performance management as the topic. Given how rapidly and drastically the world around us has changed, our goal was to truly assess the current performance management models, and discover if they are relevant to today’s time, and how effectively they inspire employees to deliver greater performance and productivity.

A successful performance management system starts with the organization recognizing why the process exists and how it needs to be understood and utilized by the employees. For this to happen, it is imperative that the organization takes into account the core values that it lives by when designing the models.

Additionally, it is equally necessary for organizations to communicate, with complete clarity, the intent and purpose of the process while also ensuring that the employees know that the process is fair and transparent. However, our survey highlighted that only 38% of employees had complete clarity about their organization’s performance management process. An equal number of employees had moderate to little knowledge (38%) but alarmingly, some people had absolutely no knowledge (24%) about these processes.

It’s safe to say that our survey didn’t paint a positive picture of how employees perceived their organization’s performance management processes. However, this also points to room for much-needed change.

Performance management processes exist in every organization. While everyone is aware of these processes, the lack of understanding of ‘why’ they take place, how they are supposed to impact employee performance, and how they align with organizational values and goals is a glaring gap that needs to be addressed. 

With a significant number of employees stating they had absolutely zero clarity about performance management processes in their organizations (24%), organizations must see this as a wake-up call. While this result can be attributed to some respondents being new to the company, in an ideal scenario, organizations must not have any employee who lacks clarity about such a key program especially when it directly impacts their own growth in the system.

The solution is obvious but urgent. Every organization must continuously communicate with their employees, helping them understand the “what, why, and how”. Such communication must be proactive instead of being limited to induction programs or sessions during the performance appraisal cycles. The goal should be to ensure that every employee can clearly and with utmost certainty articulate what their organization’s performance management process entails and why it exists.

Clarity about the process also helps employees understand whether the evaluation is fair and objective. A successful performance management model hinges on these two pillars. While it is agreed that no system in its implementation can be entirely fair and objective, it is also important to realize that every effort must be made to not only be fair but also appear fair.

What’s also alarming is that an overwhelming portion of employees (95%) indicated that the performance management process in their organization is either not fair at all or is only partially fair. This is not an ideal place for organizations. It not only indicates a communication hurdle but also a deep-rooted sense of disengagement and lack of trust that leaders must promptly address.

Often, organizations do not undertake a survey after the performance appraisal process. The common belief or ‘fear’ is that employees will be dissatisfied and have several complaints to make.

However, growth cannot come from a place of comfort. It is important for companies to give their employees an opportunity to share their feedback, regardless of how positive or negative it might be.

Both types of feedback can be instrumental in shaping a fair and more effective performance management system. Letting the employees know that they are being heard fosters a sense of value and belonging. This is even more impactful if leaders take this feedback seriously and work with genuine intent to resolve any gaps.

A critical part of performance management systems is the idea that they help boost individual careers / professional journeys. Our survey findings showed us that this is yet another area that organizations must work to strengthen.

When asked if their organization’s performance management process helps power professional growth, 60% of employees disagreed. This number is a strong indicator of poor engagement; revealing that this is “just a job” and a stop-gap plan for the individual. The absence of action or intent to propel their professional growth keeps them from building a connection and impacts loyalty, almost always resulting in them looking to move out to greener pastures. Such a system is unconsciously focused on retaining employees for the here and now and lacks long-term vision.

This approach needs an overhaul, especially at a time when talent retention is a massive challenge facing businesses around the globe. Organizations must pay close attention to building a variety of frameworks such as well-defined career paths, job competencies, career progression plans, training programs, etc, to enable the scaling process and more. They need to articulate these well and start creating examples for the other employees to witness and want to pursue.

In conclusion

A performance management system is not just another process that takes place annually. It exists for a reason, and it’s time that leaders and employees both understand the value and purpose of this process. Organizations need to build stronger internal systems and processes that are not only relevant to the times and the new generation of workforce but, also ensure that they communicate the true intent and value such a process adds to the employee’s career.