Performance Management from the Top Down
The effectiveness of Performance Management Systems are the focus of successful organisations. There are many popular frameworks but research shows it is less about the design of the PMS and all about the buy in from the organisations leaders.
“....Performance Management Systems are most effective and relevant when they are championed by business leaders within the organisation and supported from the top down."
A “State of Performance Study” conducted by WorldatWork surveyed more than 550 HR professional s and found that “The organisations getting the most impact from performance management are those that have strong leadership support and that execute well in differentiating performance and giving performance messages.” It found that performance management techniques do not vary greatly between high and low performing organisations. The most significant differential is the level of ‘active leadership support and championing of the process.’
Research by the Hays Group reports that the ‘Most Admired Companies’ are governed by business leaders who take a well-rounded approach to measuring performance including less quantifiable measures such as teamwork, long term thinking, building human capital and developing and managing talent as opposed to Average Companies whose measurements are more ‘old school’ they are quantifiable like profit, growth and operational excellence.
It seems the data supports the case that Performance Management Systems are most effective and relevant when they are championed by business leaders within the organisation and supported from the ‘top down’.