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Organizations are exploring some new and innovative performance management systems in an effort to truly inspire and motivate their teams with some encouraging results.  Traditional performance management systems typically set goals related to the business plan, utilize performance appraisals that are too lengthy, redundant, hastily completed to meet deadlines, and often don’t allow employees any real input.  Many HR leaders believe that performance reviews yield inaccurate results due to biased approaches and misleading inputs.  Performance Appraisals are essentially a forced ranking system that can actually be very demotivating.

The traditional systems are beginning to shift to a more effective coaching system that focuses on employee achievement of measurable goals and objectives rather than formalized annual appraisal systems that primarily communicate one-way.  There are many examples of progressive companies that have replaced their traditional performance management systems with a culture of coaching, feedback, development, and high performance. Critical to success is that everyone in a leadership role is trained on how to coach and provide constant performance feedback, which in turn, engages employees and creates a desire to continuously improve.

The goal of managing performance is being replaced with a goal of obtaining the best possible sustainable performance under the current circumstances.   Key elements of this new paradigm include:

  • Simplify the Process:  Train managers on how to coach, give feedback and regularly check in with employees.  Focus on developing employees rather than evaluating and giving them a ‘rating’.  Ask questions that help target what the employee needs, such as, “What skills would you most like to improve on?” or “What can I do to help you?”  Review employee progress more frequently making the process less intimidating and more sensitive.
  • Streamline, shorten or completely replace Performance Review forms: Replace the forms with on-going coaching and feedback.  Feedback must be timely to be meaningful.
  • More agile, relevant, frequent and transparent goal management:  Include employees in the discussion of key performance objectives, ensuring they understand the reasons for the goals and can see how they are linked to organizational goals.  Utilize more short-term goals that are easier for employees to derive meaning from what they do every day.  Create achievable goals and regularly monitor employee progress.
  • Address career goals and future training needs:  Include a system that supports follow-up and delivery of the training and career opportunities.  Create a culture where managers can delegate without feeling threatened, knowing they also have opportunity and training for the next career advancement.
  • Eliminate direct correlation between performance rating and compensation:  Make pay adjustments based on a combination of elements such as performance, customer and business impact, skill scarcity and the competitive nature of employees’ positions.

Employees want to perform at their best.  They want to understand the goals and to be motivated.  They want to contribute, be supported, to learn and to have fun.  Management and leaders need to create the conditions needed for a great performance to take place and for business to flourish.  The ideal process for managing performance is one that successfully motivates and supports staff to contribute to the achievement of the goals and objectives of the organization.  A culture that encourages on-going communication and coaching between managers and their employees has many benefits and advantages over traditional Performance Management.

Change can be challenging and demanding.  At WageWatch our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary surveys that will allow you to stay current with the times.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, including consulting, salary survey data, benefit survey data, and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.