Bersin& Associates, the premier research and consulting firm empowering HR organizations to drive bottom-line impact, announced new research that shows senior leaders who coach, develop and hold others accountable for coaching and development are three times more effective at producing improved business and talent results than those who do not.
The research findings are included in Bersin& Associates’ new study, High-Impact Performance Management: Part 1 – Designing a Strategy for Effectiveness. The research also found that while 70% of organizations claim they coach their employees, many managers lack coaching skills, and only 11% of senior leaders actively coach regularly. Despite such challenges, 10% more organizations say they use a coaching and development model of performance management today than did in 2008.
“High-performing organizations are moving from competitive assessment toward a coaching and development model for performance management to address an unusual confluence of events: a slow recovery from a deep recession, the rise of a younger generation that expects more coaching and development and the globalization of much of the workforce,” said Stacia Sherman Garr, senior analyst for Performance Management, Bersin& Associates. “A coaching and development approach to performance management empowers organizations to provide support when they cannot offer more compensation. It also facilitates the development of younger workers and helps retain employees in competitive emerging markets.
“Our research also shows that organizations are moving to a coaching and development model of performance management because it drives innovation and growth, which is a top priority in organizations today,” added Garr.
For example, Kelly Services®, a leader in providing workforce solutions, transitioned from a competitive assessment model to a true coaching and development model of performance management. It has required two performance conversations: one at mid-year, and the other at year-end. Kelly found the inclusion of performance scores at year-end inevitably led to a focus on the score, so the organization no longer requires managers to provide these scores. Instead, Kelly has developed a total rewards system to handle compensation. The intention is to keep year-end conversations focused on how the employee can improve and how the manager can support them in a way that encourages coaching and developing employees to achieve better results.
The Bersin& Associates study is the first in a five-part series on High-Impact Performance Management. The series is based on a year-long analysis of performance management that involved more than 500 HR leaders from a range of industries, geographies and organization sizes. The research found that four of the top five challenges to effective performance management are related to poor executive engagement.
Specifically, the study found that:
“It is HR’s responsibility to help senior leaders understand the impact of effective coaching on their organization’s performance,” said Josh Bersin, chief executive officer, Bersin& Associates. “Our research finds that performance management when done well can deliver huge business impact. The key findings in this research are that the coaching element is much more important than organizations may previously have believed.”
Bersin& Associates plans to publish four additional reports in the Performance Management series over the next nine months. Parts two through five will look at performance management practices, such as setting and revising goals, coaching and development planning, rewarding and recognizing performance for impact, and using appraisal to drive improvement.