 Big
Picture
By Martin Babinec
Three Steps to Better Performance Management
In the previous issue of HR Wire, I discussed the results of a study that TriNet undertook in regards to Human Capital Management practices. The goal was to build some actual data sets around both HCM practices and outcomes in small high performing companies nationwide, including what worked and didn’t work to maximize their corporate performance. There were 700 companies in the study population with an average wage of $102,000, and an average workforce size of 18.1 employees.
I’ve already shared the results we found in regards to Talent Acquisition practices in these companies (refer to the TriNet blog at http://blog.trinet.com for that article), but now I’d like to focus on what we discovered in terms of Performance Management practices.
The short list for performance management success calls for keeping focused on just three things:
- Set and align goals from top to bottom
- Link performance reviews to compensation
- Touch base on goals throughout the year
We found that very few companies in the small and medium-sized market set concrete goals for their employees, and those that did failed to specifically link compensation to the completion of those goals throughout the year. Rather, promotions and salary increases—or lack thereof—became a matter of the manager’s “gut” instinct, and employees had no clear path to understand how they might grow and advance in the organization since there were no standardized processes for linking performance and compensation.
Even for the companies that did set goals, we noted a lack of willingness to adapt to changing conditions. New business issues may have arisen throughout the year, but there wasn’t sufficient discussion in the company itself that lead to revising the originally defined goals.
None of this is surprising. It is not uncommon for early-stage management teams to believe that sound human capital practices are a luxury—great in principle, but simply not practical given the pressures of the moment. But the hard fact is that every company makes the most critical long-term decisions about people, culture and structure early in its history, and concrete practices in human capital management are ones that can make a difference in a company’s success or failure as it continues to grow.
After all, end-of-year performance reviews shouldn’t be a mystery. Rather, they should be prepared for throughout the year so there are no surprises. What’s not measured is what’s not being managed.
To comment on this article, visit blog.trinet.com.
Best regards,
 |
|
Martin Babinec,
President & CEO,
TriNet |
On the Wires
9 Critical Reasons to Automate Performance Management
A growing number of small and mid-sized businesses are turning to innovative technologies to help improve their performance management processes. From Success Factors.
Go to article >
Battle Retention Deficits With On-Boarding
As organizations place increasingly greater importance on retaining and developing talent, formal on-boarding strategies, processes and programs are becoming a competitive necessity. From CFO Magazine.
Go to article >
Talent Management in a Recessionary Economy
With all of the talk about “are we or aren’t we in a recession,” what shareholders and observers should be really talking about is a companies ability to adapt to uncertain economic times. From The Human Capitalist. Go to article >
On the Canada Wires
Employee Compensation: Wage War
With unemployment at a 33-year low, pay rates are soaring. Here's how to hang on to staff without handing out huge salary hikes. From Canadian Business. Go to article >
What’s New in Business Taxes in 2008
New tax reductions affect Canadian small businesses. From About.com. Go to article >
Learn More About TriNet Canada Here
|
