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Only a third think performance management is effective

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Nearly half (45%) of companies say their managers do not see the value in performance management

Only 36% of companies in the UK consider their performance management process to be effective, according to research from professional services firm Towers Watson.

The EMEA Performance Management Survey found that 45% of companies say their managers do not see the value in performance management, and 53% think managers don’t have the time to do it well.

The researchers also asked what organisations spend their time doing. Nearly a third (32%) said they spend too much time filling in forms, and 72% were concerned that they cannot spend as much time as they would like having ongoing conversations with employees. Nearly seven out of 10 respondents (69%) said they spent too little time collecting feedback from their colleagues.

The report follows announcements earlier this year from several large firms, including Netflix, Microsoft, GE, Adobe, and Dell, that are planning to or already have abandoned the traditional performance review system and scrapped annual appraisals.

Accenture, which halted its performance appraisal system in August, moved to a new approach called ‘Performance Achievement’ that aims to give employees “timely feedback from their managers on an ongoing basis throughout the year”.

Towers Watson director Radha Chakraborty said the findings highlight important gaps that companies will need to address if the effectiveness and perceptions of performance management are to improve. “It’s clear that a fix is required, particularly if we consider the importance of the process to business performance,” she said.

“The headlines are a perfect catalyst for reconsidering the tools and approaches we use to manage employee performance. Clearly, we have an opportunity to make a business impact by reshaping the delivery of performance management. How we do that must align to the culture, as well as the priorities of the business. If we do this in a way that is efficient and effective for managers and employees to execute then all the media hype will have had a positive impact."