Employee Productivity: Has the Golden Goose Flown the Coop?

by Carol Meyers

At the end of June, Hay Group released an executive summary of its survey of business leaders views on “the state of the global economy and its impact on growth ambitions.”  The preliminary report is fascinating.

The survey shows a wide disconnect between CEOs’ expectations for growth and productivity improvements and their focus on the key drivers of performance needed to achieve that growth. Here are some of the findings:

* Business leaders expect to increase worker productivity by 6% on average
* 63% say these growth targets represent a significant challenge
* 44% are specifically concerned employees are too stretched to deliver
* Half believe the focus on productivity gains carries significant risks, with nearly 60% citing employee disengagement as one of those risks

It seems the goose that laid the golden egg has flown the coop. Many CEOs and business leaders have relied on workforce reductions and cost-cutting to create gains in productivity over the last three years.  It seems they realize cutting can no longer fill the gap.  Now gains in employee engagement, rigorous alignment against priorities, and a performance culture are needed to fuel productivity gains.

According the research, business leaders agree on many  drivers of productivity gains.

* 64% agree individual performance management is a driver of business performance
* 90% say company culture is important to the effectiveness of performance management
* Yet, only 13% of the firms surveyed tie performance management to both corporate strategy and culture

My colleague, Derek Irvine, has written extensively on the beleaguered annual performance review and why companies must makes changes now.  The time is ripe for significant changes including driving engagement through timely and frequent employee recognition and building recognition and performance around company culture and objectives.

I’d love to know your thoughts.  What is happening at your company with the annual performance review?  Is employee recognition tied into your culture, values and performance management?


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