heard the constant drumbeat of discontent from American companies.
Employee performance management as we know it is ineffective. It takes
too long to complete the process. It doesn't really bring about
any change in performance. Employees think it's a sham because of
negative features like forced
ranking. Supervisors think it's a bureaucratic waste of time.
author suggests companies just scrap the process. Create something
better. Shinier. More sophisticated.
Perhaps so. But as the Summer Olympics wind down we
can't help but wonder: is the discontent merely a U.S. centric
Recent research shows that if employee performance management
became an Olympic sport, the U.S. would likely lose by an embarrassing
margin. A new report from i4cp compares performance management
processes and practices in the U.S., Brazil and Russia, and the data
highlights some startling differences. The report details a story that
contrasts two countries intent on doing things right, with one
consistently demonstrating what's wrong.
Management: A Comparison of Brazil, Russia and the U.S., the
report starts by looking at the various levels where performance
management (PM) principles and practices are applied, and immediately
finds some important differences. A majority of organizations in both
Brazil and Russia included executives in their performance management
practices, yet less than half of U.S. firms said they did. What's
more, the percentage of firms in Brazil and Russia also exceeded the
proportion of those in the U.S. in applying PM practices to business
units, project teams, work teams and board members. The U.S. did,
however, have the largest percentage of firms applying PM principles to
the individual employee level.
In U.S. organizations, as Ed Lawler, Distinguished Professor
of Business at the University of Southern California Marshall School of
Business, recently wrote, it appears that "All too often in
traditional organizations, the performance appraisal is something the
top tells the middle to do to the bottom."
And what the bottom complains about is often the inconsistency
in the process. One of the more popular i4cp studies, The 9 Keys to
Performance Management, highlighted the importance of
training managers in how to give an effective performance review and
reduce inconsistency. But in comparison to Brazil and Russia, the U.S.
is failing miserably at this. The percentage of firms offering
supervisory training in Brazil and Russia easily exceeded the U.S.
And U.S. companies don't even have Russian judges to
While the Olympics provide us clear winners and losers,
employee performance management may be harder to judge. Firms in Brazil
look primarily to employee satisfaction and individual goal
accomplishment. Those in Russia also chose individual goal
accomplishment as their top measure of success.
The U.S., as usual, is different. "Completion
rates" is what the majority of firms cited as the primary metric.
Sounds like grounds for disqualification.
These overall findings hint at why U.S. organizations are
discontented with employee performance management. Supervisors are
unprepared. Employees are rushed through a superficial process. And
getting it over with is the primary objective.
But the problems don't end there. Adding to the futility
that employees must feel was this discovery: U.S. organizations
were the least likely of firms in the three countries studied to take
meaningful action for employees in the lowest quartile of employee
performance management ratings. This included being less likely than
firms in Brazil or Russia to use targeted development plans,
probationary measures or terminations for employees whose performance
was lagging. Such inattention to nonperformance can affect the morale,
engagement and retention of higher-performing employees.
These findings serve as a needed wake-up call to firms that
are focusing on organizational performance. The desire to gain business
momentum through increased productivity must be supported by an
employee performance management process that spans top to bottom. Here
are some recommended actions that organizations can take based on the
insights provided by Performance Management:
A Comparison of Brazil, Russia and the U.S.:
- Use a broad brush in applying performance management
principles, not just vertically from the board to executives to all
levels of individual employees, but also laterally to project teams and
other work groups with an obligation to produce.
- Invest in providing supervisors with specific training on
how to develop meaningful goals with their employees as well as in the
art of holding appraisal meetings and giving performance feedback to
others. Model a coaching environment.
- Address low-performing employees by creating targeted
development plans designed to improve performance. If and when the
situation warrants it, use probationary measures or terminations.
- Measure the success of an employee performance management
program in a manner that reflects accomplishment. Each
individual's performance feeds into the department's, the
business unit's and, ultimately, the organization's
performance and success.
Although this report uncovered some factors that didn't
represent U.S. organizations at their gold medal best, i4cp always
drills down to discover what high-performance organizations (HPOs) are
doing to differentiate themselves. The next report in this series will
reveal the practices of those firms designated as HPOs through
i4cp's Market Performance Index.
It appears that those HPOs in the U.S. are ready to go for
that performance management gold.
Donna Parrey is a senior
research analyst for i4cp and the lead researcher for the i4cp Global
Talent Management Exchange and the Executive Leadership Development
Exchange. She has an extensive background in human resources as a
business partner, director and generalist prior to joining i4cp.