Managing poor performers is the key to boosting productivity

The
UK’s poor productivity when compared with other European countries may be due
to the failure of companies to effectively manage employee performance,
according to a survey by Mercer Human Resource Consulting.

The
Britain at Work study, covering more than 3,500 British workers, reveals that
only one in five employees believe good performance is rewarded, only a third
feel there is an adequate link between pay and performance, and less than 40
per cent think that employees who under-perform are managed appropriately.

Patrick
Gilbert, head of the Organisational Research & Effectiveness group at
Mercer, said: "In the face of increasing competition and cost pressures,
organisations have sought to improve productivity and customer service by
creating a performance-based culture – one in which high levels of performance
lead to greater financial reward. Yet the link between pay and performance
remains as weak and ill-defined as ever."

This
is particularly true of incentive pay and only one in five employees say their
bonus plan is personally motivating.

"Incentive
pay is often seen as an entitlement to boost base pay levels, instead of a
reward to encourage good performance," said Gilbert.

"When
poor performers are not managed and good performers are not rewarded, standards
will inevitably drop. Left unchecked, companies face the prospect of a
‘regression to mediocrity’."

Similarly,
managers may not be investing the time required for employee development.
According to the findings, only a fifth of employees say their line manager
regularly coaches them to help improve their performance. And just four in 10
workers feel their manager plays an active role in their career development.

Gilbert
said: "In a world of competing priorities, managers feel compelled to
focus on activities with a short-term return. Employee development gets put on
the back burner as its effect on results is less immediate."

By Ben Willmott

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