Bersin & Associates, a research and consulting firm, has announced new research that shows senior leaders who coach, develop and hold others accountable for coaching and development are three times more effective at producing improved business and talent results than those who do not.
The research findings are included in a new study, High-Impact Performance Management: Part 1 – Designing a Strategy for Effectiveness. The research also found that while 70 percent of organizations claim they coach their employees, many managers lack coaching skills, and only 11 percent of senior leaders actively coach regularly. Despite such challenges, 10 percent more organizations say they use a coaching and development model of performance management today than did in 2008.
“High-performing organizations are moving from competitive assessment toward a coaching and development model for performance management to address an unusual confluence of events: a slow recovery from a deep recession, the rise of a younger generation that expects more coaching and development and the globalization of much of the workforce,” said Stacia Sherman Garr, senior analyst for performance management, Bersin & Associates. “A coaching and development approach to performance management empowers organizations to provide support when they cannot offer more compensation. It also facilitates the development of younger workers and helps retain employees in competitive emerging markets.
“Our research also shows that organizations are moving to a coaching and development model of performance management because it drives innovation and growth, which is a top priority in organizations today.”
For example, Kelly Services transitioned from a competitive assessment model to a true coaching and development model of performance management. It has required two performance conversations: one at mid-year, and the other at year-end. Kelly found the inclusion of performance scores at year-end inevitably led to a focus on the score, so the organization no longer requires managers to provide these scores. Instead, Kelly has developed a total rewards system to handle compensation. The intention is to keep year-end conversations focused on how the employee can improve and how the manager can support them in a way that encourages coaching and developing employees to achieve better results.
The study is the first in a five-part series on high-impact performance management. The series is based on a year-long analysis of performance management that involved more than 500 HR leaders from a range of industries, geographies and organization sizes. The research found that four of the top five challenges to effective performance management are related to poor executive engagement. Specifically, the study found that:
• Senior leaders frequently fail to model effective coaching. Only 11 percent of senior leaders regularly coach their employees and only 15 percent of leaders discuss the importance of coaching and development employees “very frequently.”
• Executive engagement is critical to performance management effectiveness, yet is lacking at most organizations. Of those organizations with very frequent executive engagement with performance management, 81 percent had strong business results — and none had below-average business results. Only 35 percent of organizations with infrequent executive engagement had strong business results.
• Managers lack the skills to coach their employees, and this presents the most severe challenge to effective management of employee performance. The research shows that organizations effective at teaching managers to coach deliver higher levels of employee productivity, employee engagement and financial performance.
• At most organizations, there is a “disconnect” between the intended purpose of performance management and the reality. Companies want the process to deliver goal alignment (49 percent) but more often they focus entirely on performance appraisal (44 percent). This is why the coaching element has such impact.
“It is HR’s responsibility to help senior leaders understand the impact of effective coaching on their organization’s performance,” said Josh Bersin, chief executive officer, Bersin & Associates. “Our research finds that performance management when done well can deliver huge business impact. The key findings in this research are that the coaching element is much more important than organizations may previously have believed.”
Source: Bersin & Associates