How can HR boost performance and productivity in 2020?
The UK’s productivity levels are continuing to drop – and one of the reasons for this (among many others) is the outdated way that businesses are dealing with employee performance. As we head into a new year, how can HR transform its approach to performance management?
The Office for National Statistics’ (ONS) most recent Labour Productivity report revealed that UK workforce productivity fell by 0.5% in Apr-Jun 2019 (versus Apr-Jun 2018) – the sharpest drop in five years. Prior to this, the ONS announced two quarters of zero growth in productivity. It certainly paints a stagnant picture. How can it be that the UK is still struggling with productivity?
Performance and productivity are inextricably linked. While plenty of research suggests that employees want feedback, and value the opportunity to learn how to do their jobs better, one of the worst-kept secrets is that traditional approaches to performance management just don’t work.
Our recent Cezanne HR survey helps to answer these challenges. We polled 1,000 UK employees to gather insights into the state of performance management today. We asked for their thoughts on performance management, and we gained a picture of what the average UK performance review looks like.
The findings, centred around appraisal apathy, reveal a concerning, albeit actionable, picture of UK performance management practices.
A third (33%) of UK employees said they were ‘indifferent’ to performance appraisals, and nearly one in five (16%) admitted to ‘usually dreading’ or ‘always dreading’ them. Of these, nearly two-thirds (64%) cited their reason as ‘finding the process uncomfortable’ or ‘believing them to be a waste of time’.
Apathy towards appraisals is one thing, but apathy towards performance and the overall success of the business is another! Identifying how to fix the former before it evolves into the latter is key.
Notably, employee apathy towards performance reviews grew in line with age and length of service. While less than 12% of younger, newer employees said they were indifferent to performance reviews, this rose with age (45% of all ‘baby boomers’), and length of service: two in every five workers who had been with their company for at least five years stated an indifference towards performance reviews.
How can we optimise performance management for employees in 2020?
So, how do we take these collective findings on board, and move the dial with both performance and productivity in 2020?
These are the five key trends we predict for the coming year...
1. Employee experience
Performance reviews are just one aspect of the overall employee experience. How an employee feels about your organisation starts before they are hired and is then influenced by everything from onboarding and remuneration to flexible working and progression opportunities.
So, it comes as no surprise that the employee experience needs to be personalised, and performance check-ins are a great opportunity to do this. Our survey shows that a majority of employees have expressed a need for ‘more focus on career opportunities and training’ or ‘more focus on future goals and objectives’. But, we need to understand how these needs translate to individual employees.
2. The growth of regular conversations
Tailoring employee engagement is an ongoing process, and it relies on regular dialogue to keep it up to date. The idea that ‘continuous conversations’ are preferable to the traditional once-a-year performance review isn’t new, but many managers still struggle with it.
Are organisations worried about the administrative burden of multiple conversations? The reality is that addressing a problem early on reduces the time and financial burden both line managers and HR partners could otherwise face down the track. Using HR technology that simplifies recording and storing the outcomes of continuous conversations helps to shift line managers’ approaches and attitudes to ongoing performance management.
3. A continued focus on engagement and wellbeing
Employee engagement and wellbeing is only going to increase in importance in 2020. Performance management conversations need to be reframed as a two-way-street: it’s equally important that managers are happy with output and employees are fulfilled by and engaged with their roles.
In our survey, when asked what would help them perform better in the workplace, more than half of respondents cited flexible working and ‘feeling like my employer cares about my wellbeing’. So, employees are definitely linking engagement and wellbeing with productivity. The CIPD is recognising the importance of flexibility, with its 2019 CIPD People Management award for diversity and inclusion going to O2 for their programme helping mothers return to the workforce.
When asked what personal issues they’d feel comfortable talking about in a performance review, 71.8% of respondents said work/life balance, and 49% said mental health – interestingly, both ranking higher than physical health (42.8%).
Work/life balance and good mental health is unique to each employee. For example, when considering the aging workforce, working part time can be a good way to maintain a foot in their working life while starting to transition to retirement.
But, for some older people, a busy full-time working schedule might be essential to their mental wellbeing. So, employers need to capitalise on an employee’s willingness to share their needs and to have open and honest conversations.
4. Managing change and building resilience
The current political climate and the pace of technological change can be unsettling for employees. It’s certain we’ll see more change in 2020, and HR professionals and line managers need to be mindful of how this will impact productivity.
Where most organisations fall down is in failing to communicate openly and regularly with their employees about how changes are affecting the business and individuals. Some matters are of course confidential, but often managers say nothing because they don’t know what they are allowed to say, or communications are badly cascaded.
HR can help to bridge this communication breakdown by working with the business and internal communications professionals on change communications. Performance management that includes clear career and succession planning can also help employees, as they focus on long-term goals rather than being distracted by short-term upheaval.
5. Technology solutions
The slow adoption of performance management technology may be contributing to the UK’s productivity problem. In our survey, just one in every five (20.7%) employees reported using online performance management software, while nearly half (41.8%) said their performance reviews are still documented in printed form.
So, why isn’t performance tech the norm for UK employees yet?
The HR community widely understands the value of HR software, and employees who do use it for other HR processes, such as holiday management, tend to stand by the support and efficiency savings it provides. That said, the adoption of modules that enable continuous performance reviews is still very much in its infancy – partly because continuous performance management itself is only just starting to gain traction.
The transformation of performance management from a tick-box HR exercise to a strategic business necessity will ensure that the adoption of technology continues, gathering speed as we head into ‘HR 2020’.
About the survey:
The data is drawn from a survey of 1,000 UK employees conducted at the end of September 2019. All those surveyed had been with their current organisation for more than a year. Just over 50% had been at the same organisation for more than 5 years. Respondents came from a wide range of industry sectors, including public sector.