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Only two percent of Fortune 500 CHROs strongly agree that their performance management system inspires their employees to improve, a Gallup Survey has found.
Just two percent.
That measly number of HR leaders who are happy that their tech is working as they would have hoped when implementing or purchasing the system should be a major wake up call for the profession.
Employees, according to another Gallup survey, are a little more optimistic, but still only 20% of some 18,600 employees say their performance reviews are transparent, fair, or performance-improvement-inspiring.
While HR technology not fitting the bill is hardly stop-the-press level news, the findings of this survey are a new low. Without playing the blame game, it’s time for all those involved in the performance management process to come together and address this shocking statistic.
Why are so few CHROs satisfied with their performance management systems?
Performance management has been in the doldrums for many years. The annual performance review of old has been tossed out by some forward-thinking HR teams seeking a more regular conversation around how the manager could best support the employee in their journey toward improved engagement, productivity, and quality of output.
Unfortunately, the evidence shows that reality is a far cry from expectation, and many employees are still subject to time-consuming, ineffective performance reviews dreaded by workers and managers alike.
At many organizations, performance management still relies on managers to pencil in a review once per year, before prescribing a rough and ready rating on their employee. The worker might be asked what went well, and what didn’t, and the judgments are then fed into any possible pay or responsibility increases for the next twelve months. The worker might take some lessons forward, or they might not. And so the cycle continues.
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Other slightly more forward-thinking organizations might have tried to implement a Google-lite model where feedback is brought in from across the team and colleagues must spend hours painstakingly reviewing their peers, before a committee reviews all the feedback and decides once again on how pay or promotions will be allocated.
CHROs are dissatisfied with these systems because they are static and infrequent, rather than continuous. They look backwards, rather than forwards. They rely solely on subjective judgment from managers rather than drawing on multiple qualitative and quantitative inputs. They are isolated, rather than including team-based discussion. They reflect unclear business goals rather than the day-to-day reality of employees. They focus on too heavily on performance management, and not enough skills development. They are dominated by thoughts of pay and promotion rather than personal growth.
The list could go on. And unfortunately—thanks in part to the sophistication of HR tech salespeople—many businesses fall into the trap of thinking that these issues could be fixed by a new tool, product, piece of technology, or system.
CHROs should fix processes before purchasing technology
Rather than attempting to paper over the cracks with a shiny new toy that promises to automate or augment some or all of the performance management process, HR teams should instead consider how to fix the broken process.
They should start by identifying what problems employees, managers, or the business specifically have with the performance management system in sitū. Do employees feel they are being reviewed against goals that do not reflect their work? Are managers frustrated that they do not have the time to conduct a review each month, quarter, or year? Is the business struggling to develop the talent it needs to achieve goals for revenue growth, innovation, or customer service?
Building or purchasing a new system or platform may well be a part of the answer, but it will not fix the problem in its entirety. Instead, relying on a tool or platform that does not sufficiently address the frustrations of employees and managers would only lead to a smaller level of satisfaction with performance management systems.
The interplay between people, processes, and technology is tricky to get right, but if HR teams wish to be more satisfied with their performance management systems, they must first address the broken performance management processes.
A forward-focus, continuous approach that emphasizes personal and team development would fix many of these broken processes and increase the number of satisfied CHROs beyond the measly two percent.
