Good performance management practices could drive higher employee engagement levels, indicates new research conducted by HR.com in partnership with BambooHR, HR technology solutions provider.
The research report, The Impact of Performance Management on Engagement, is based on responses from 880 HR professionals participating in a survey fielded earlier this year.
The study found that many employers suffer from low levels of employee engagement, especially when engagement is defined as a willingness to give discretionary effort. Fewer than half (46%) of the participants agreed their employees give discretionary effort (that is, go above and beyond the minimum effort required), and a mere 6% strongly agreed.
The research confirmed previous studies showing a link between engagement and employee/manager relationships. Fewer than a tenth of the participants described their organization’s manager/employee relationship as “dynamic,” and these companies reported nearly three times the level of engagement and discretionary effort compared to other organizations.
The study also examined whether performance management systems impact engagement. There were two major findings. First, there appears to be a link between frequency of feedback and engagement. Sixty nine percent of respondents said their employees were highly engaged when performance reviews occurred quarterly or more often, compared to just 28% when reviews occurred less frequently than once a year or never at all.
Second, the study suggests that the reasons for performance reviews may influence engagement. It found that when positive, proactive reasons motivated performance reviews, employees tended to be more engaged and willing to give discretionary effort.
“We can’t definitively say that performance management practices drive engagement,” said Debbie McGrath, Chief Instigator and CEO of HR.com, “but the data suggest some kind of relationship. I think a lot of employees, and even some HR professionals, are cynical about annual performance appraisals if those reviews feel like unpleasant confrontations rather than good and productive conversations. If organizations are having those kinds of challenges, they might want to try experimenting with more frequent performance conversations motivated by the desire to help employees learn and grow. Then those firms could see if this has a positive impact on employee engagement and discretionary effort.”
The study also examined which types of technologies employers typically used to operate performance management systems.