In order to meet growth targets, CEOs are likely to expect a significant hike in employee productivity in 2011
UK CEOs are demanding significant increases in workforce productivity in order to meet aggressive growth targets in 2011.
According to a study from management consultancy Hay Group
, UK firms are looking for an average of 5.4 percent growth in 2011, well ahead of the IMF
forecast of 1.7 percent for the UK economy.
And while two-thirds of UK CEOs admit this target is high, and will demand a massive productivity increase, very few have the necessary performance management required to meet it.
Over half (55 percent) of UK business leaders plan to ask more employees to meet targets. Executives say that, on average, they will need employee productivity to increase by six percent.
Despite this, almost half again (46 percent) fear their employees are already too busy to meet current business goals.
And when it comes to individual performance management, there is a clear gap between its importance in the eyes of CEOs and their ability to deliver it effectively.
The majority (83 percent) of UK business leaders agree that individual performance management is an important driver of overall business performance, while two in five (39 percent) believe it directly benefits the bottom line.
However, less than a quarter (22 percent) align performance management to company strategy, and a third (36 percent) describe their performance management process as a ‘tick-box exercise.’
Just a quarter (26 percent) of firms tailor performance management to company cultures and values, despite 96 percent stressing that culture has an important influence on the effectiveness of performance management procedures.
Matt Crosby, associate director at Hay Group, said: "Employee performance management sits at the heart of business success - yet too often is seen by senior managers as a chore. At a time when productivity is critical to achieving growth, leaders must realise that performance management is their job.
"CEOs have set challenging targets, and are demanding more from their workforces to deliver them. This means engaging and inspiring employees to get behind their growth ambitions.
"Firms need to manage performance for growth to achieve the targets promised to shareholders.
"CEOs cannot achieve their targets without harnessing the collective power of their workforce. Yet this sort of productivity improvement is a big ask from employees who have worked hard to help their firms through three difficult years since the financial crisis.
"Aligning performance management to culture is an opportunity for business leaders to communicate what their firms stand for, and unite their workforce behind that vision and their ambitions.
"Without an approach tailored to their strategy, culture and values, firms will not be in the right shape to deliver the growth expected of them."
The Hay Group report, entitled Strategic performance management
, is based on a survey of 1,660 senior managers in large companies across the globe, including 100 in the United Kingdom.