According to findings from the new Lumesse Performance Management Assessment Tool companies in the US and Canada are global leaders in employee performance management. Companies in the Asia Pacific region were ranked second best at enabling their employees to see a connection between performance and compensation
, however, only 22% of APAC organisations provide cascading goals for the majority of employees. Moreover, just 17% measure the majority of their managers on leadership effectiveness. Erik Schmit, Group Managing Director APAC, Lumesse commented, “Although APAC is the second leader in the survey, there’s still a lot of room for improvement. Using financial metrics to create employee goals would be the most challenging topic to be discussed.”
Based on assessments of 500 business and HR executives in 44 countries worldwide, the results highlighted the contrasts between North America, Europe and Asia Pacific concerning the maturity of employee performance management processes. The report also detailed five key areas, based on real-world feedback from the best practitioners, where companies could make the most noticeable improvements in performance management. Areas examined included key processes such as the use of cascading goals, the identification of career plans, links between pay and performance, and good use of financial metrics.
North American companies came out on top at every basic performance management practice; other regions had much more variable results. In the UK, for example, 37% of organisations had cascading goals for the majority of employees—the second highest of all regions—but proved to be the least effective at providing financial metrics. Meanwhile, Germany, France, Italy, Benelux and Scandinavia were above the global average, 24%, in terms of setting business goals and linking them to financial metrics, but still struggled to make a connection between pay and performance—all falling below the global average. The global data showed, for example, that the best companies were setting their employees cascading goals so they could understand how their work supports the company objective. Almost half of the best have cascading goals for most or all employees and just over a third retained more than 90% of their high performers and high potential employees over the past five years.
Francis Chan, Country Manager Hong Kong, Lumesse said, “Goal setting is the basic action that has to be taken in performance management processes. A transparent platform where employees know what they need to do and how their work is related to organisation goals can have a significant impact on the performance of individuals and hence the organisation.”
The best companies were also found more likely to hold their managers accountable for leadership effectiveness, with nearly half confirming they measure most or all managers’ leadership ability. However, while leaders fare well in connecting pay and performance, 40% say most or all of employees were able to see a clear relationship between performance and compensation. Only 28% of leaders had financial metrics in place to create employee goals.
Paul Arkwright
Publisher
