How crucial is performance management in executive jobs?

Posted by Design & Construct on 27-Aug-2015 04:27:57

In Construction

Performance management is a reality for most people in executive roles. Whether it's a chief financial officer analysing a company's figures for the year, or an operations manager discussing how output can be improved, this is a critical aspect of daily

business operations.

Nevertheless, the usual approach to performance management might not be as effective as it once was. Employees no longer want to be sat in front of their boss once a quarter, year or however frequently reviews take place. Instead, this should be an ongoing process and something that everyone can learn from.

Deloitte revealed in recent years that it would no longer be following performance management strategies. Its own research found that it can be damaging to employee engagement and a means of alienating staff at every level.

Knowing where people's strengths and weaknesses lie gives them greater potential to be effective in their executive positions.

So just what can companies do to ensure executive staff and other employees are performing to the best of their ability, but without the negative side-effects?

Promoting an open working environment

Organisational culture plays an important part in the success of any company - and it can prove advantageous to performance management. Workplaces that encourage openness will be more inter-connected than those where bosses lock themselves away, only to be seen whenever reviews take place.

PricewaterhouseCoopers (PwC) revealed that employee engagement is critical to the success of any business. Being aware of what people are doing and how well they are doing it will be much more insightful than carrying out annual, bi-annual or quarterly assessments.

Research from PwC discovered that as many as a third of employees don't believe their past performance rating was fair, which shows that taking a more withdrawn approach isn't necessarily very insightful.

Instead, businesses where different elements interact with each other - including those at an executive level - are more likely to thrive and better appreciate the efforts of their staff.

Are performance management reviews important for Australian businesses?
Are performance management reviews important for Australian businesses?

Better utilisation of skills

Performance management reviews are an important tool in that they give a better insight into what particular functions are met by employees. Knowing where people's strengths and weaknesses lie gives them greater potential to be effective in their executive positions.

Research from the Australian Industry Group found 95 per cent of companies keep track of skills within their workforce. This is more common in large and medium-sized firms.

Understanding people's capabilities can enable the better allocation of resources, while establishing where more training might be needed. After all, executive jobs are critical to the success of a business, so it makes sense to give them the attention they need.