Thanks to Stephan Bevan at the Work Foundation writing in HR Magazine this month I learned that forced distribution performance reviews aren’t a thing of the past and are alive and well.
He wonders why – in a world where top management talks about employee engagement and discretionary effort (i.e. getting something for nothing from your staff).
Companies are still using this kind of performance review where the bottom 10% are destined for the chop via a performance improvement plan (PIP) or by being “performance managed” – usually out of the company.
Apparently it’s not so common now in the USA because of legal challenges (Jack Welch would be unhappy about those) but is on the increase in the UK.
Yahoo talks about quarterly performance reviews, General Electric calls it the “vitality curve” (presumably if you’re not vital you’re out). The Civil Service call it “expected” or “guided distribution“.
The bottom line is that a manager can have a really high performing team but has to put 10% of them into “special measures” as Ofsted would say – even though they might all have exceeded their targets!
As Bevan says this approach is toxic. And generally performance review systems don’t work, and are based on faulty scientific thinking around distribution curves. Staff themselves aren’t happy with being rated average because they met the targets they were expected to.
We may not have decimation in its original sense viz 1 in 10 roman soldiers killed by their colleagues as a punishment for the whole cohort showing cowardice or disobeying orders, but we do have 360 feedback!
I read in HR magazine that employee engagement was up in 2011 from 56% to 58% world-wide.
I was surprised to see these figures as most others I’ve seen over the last couple of years suggest that employee engagement and trust in leaders is at an all-time low.
This survey came from a compensation and talent management company’s survey of 3,100 organisations representing almost 10 million employees world-wide.
There were regional variations; Europe up 1% to 52%, Latin America down 1% (but still highest at 71%), North America unchanged at 64%, Asia-Pacific region up 3%.
Broadly employee perception improved in 3 areas: effective leadership at unit/division level was up from 54% to 61%; people & HR practices creating a positive work environment up from 47% to 53%; and perceiving relationships with customers as rewarding up from 70% to 75%.
But employee perception also declined in 3 areas: effective communications was down from 46% to 42%; innovation down from 55% to 52%; and workplace safety and security down from 78% to 75%.
So what do you make of this? Is the sample size truly representative? Who did the researchers ask? Were the organisations surveyed clients of the consultancy? H as there really been an increase in employee engagement during the recession?
A representative of the consultancy said more needed to be done to retain top talent as the economy recovers and; “Our research shows that organisations with higher engagement have significantly higher total shareholder return than the average company, so organisations that focus on what matters most in connecting employees to their work will emerge as leaders ….”