New research by Hay Group

New research by Hay Group, a global organizational and human resources consulting firm, shows that less than half of employees in the manufacturing, telecom, healthcare, and high tech industries as well as the public sector believe their organizations adequately address poor performance.



This compares to more favorable ratings in the pharmaceutical, retail, and insurance industries where more than 50 percent of employees believe their companies have adequate systems in place for dealing with poor performers.

Asking whether employees believe that their company has a fair system for evaluating individual performance, the study found that less than 4 in 10 public sector employees (38%) agreed with the statement. Other notable sectors were financial services and manufacturing (both 42%) as well as telecom (44%).

This research comes from Hay Insight, Hay Groupís employee survey group, which maintains a database of approximately 1.2 million employees in over 400 organizations worldwide.

ìWhen companies donít address issues with poor performers and continue to provide them with pay increases, companies send mixed messages to employees at all levels and risk turnover of their top performers,î said Tom Agnew, a senior consultant with Hay Insight. ìCompanies need to consider how much compensation dollars they are tying up in dead weight at the bottom of the performance scale. And if top performers donít receive the recognition they deserve, donít be surprised if they look elsewhere.î

Top performing companies believe that well-differentiated rewards ñ even forced ranking of employees - leads to better execution. Yet, at year-end, rather than confront poor performers with the bad news, many managers choose the path of least resistance, speeding through performance reviews and spreading merit pay out almost evenly ñ like ìpeanut butter.î

Reward Programs
Even with tight budget constraints, many leading companies give above-average pay increases to top performers and provide nominal or no increases to those who do not perform adequately. When combined with a sound performance management program, reward programs can be effective in attracting and retaining the staff in a way that best supports organizations to grow their businesses.

Performance Management
More than ever, businesses need the tools and processes to identify the under-achievers. Rigorous performance planning, coaching, assessment, and reward programs help ensure that a companyís top people are motivated and engaged in the organization.

During the fourth quarter, many companies will look at year-end bonuses and pay increases for their employees. As managers discuss with their staff the past yearís performance, goals for the coming year, and pay increases, these should be just one of several conversations during the year discussing performance.

ìIdeally, supervisors are having performance-related discussions throughout the year,î said Agnew. This should be an ongoing dialogue so that there should be no surprises regarding the employees evaluation and bonus.

Distributed by HR Marketer.com