State of performance management in ANZ

A review of current performance management practice within Small & Medium Business and how Continuous Performance Management can improve employee engagement and retention.

Unemployment rates in Australia & New Zealand reached historic lows in 2019. A record number of people are in work or looking for it, with participation at 66%. Low unemployment rates are great for workers and the economy, but creates a challenge for businesses in finding and retaining top talent. It’s an employee’s market and businesses are struggling to fill open positions and avoid losing employees to other opportunities.

A consistent driver for employee engagement and retention is feedback and development opportunities.

• Employees who receive frequent feedback are 3.6 times more likely to strongly agree that they are motivated to do outstanding work
• Employees who receive frequent feedback 3.0 times more likely to be engaged at work
• 42% of millennials have reported they would likely leave a job if they weren’t learning fast enough

With feedback and development cemented as essential elements to the employee experience (and thus retention), Cornerstone sought to understand how small & medium businesses are currently using these tools. Cornerstone conducted a survey to understand current performance review practices, priorities, and obstacles.

• Most small & businesses still use manual processes
• Performance feedback is largely done annually or bi-annually
• The primary driver of conducting performance feedback is to align with business objectives
• Managers are viewed as being “moderately effective” at building actionable performance goals for team members
• Managers largely conduct check-ins for status updates
• Managers are time poor and lack coaching skills to conduct meaningful performance and development check-ins
• Adoption of continuous performance feedback and development must start from the top with leadership.

Findings supported the conclusion that although continuous performance feedback and development is paramount for success to any business, small and medium businesses have failed to adopt the practice. In doing so, they face greater turnover and lack of engagement from employees.

Source: https://smb.cornerstoneondemand.com/

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