What’s the best approach when it comes to scaling up in your organisation?
Which role is most critical in making a difference to the bottom line, to productivity and employee satisfaction?
Some hard facts:
- 91% of CEO’s are worried about the availability of key skills.
- Employees are leaving because of lack of career development and progression.
- Companies are lacking skills, but people are not getting the career development.
“The skills gap is a particular pain point, impeding innovation and prompting higher people costs”
PWC, CEO Survey, January 2022
It’s a well-known fact that the leading global companies have higher skilled employees. So how can we tackle the skills gap from the core of the organisation?
Nick’s work in this area has revealed that “the manager has 70% influence on change, on: upskilling, staff retention and people development. There is little that can be done at company level”. To delve deeper into this, a ‘Gallup’ study found that “75% of employees leave their jobs due to their managers”.
A company’s manager is worth more than the investment a company makes into R&D. If you get the manager right, you have the key to increasing employee satisfaction, productivity, and company profits.
As Nick says, “If you increase manager effectiveness by 10%, the knock-on effect is stronger employee performance.”
So how do we do this?
95% of companies focus on performance management, a structured way of assessing if activities and output meet an organisation’s goals.
Elaine Pulakos is known for her work and writing on performance management. In January 2015 Elaine published an article titled ‘Why is Performance Management Broken?’ the article proposed that “….a significant part of the problem is that performance management has been reduced to prescribed steps within formal administrative systems that are disconnected from the day-to-day activities that determine performance management effectiveness…..” she goes on to say “Although well-developed tools and systems can facilitate performance management, these alone do not yield effective performance management. In lieu of making further changes to formal performance management systems, we argue for devoting more attention to improving manager-employee communication and aspects of the manager-employee relationship……”
A study in 2012 by CEB found that there was no correlation between high performance scores and company profit. In fact, [performance management] disengages employees, costs millions, and has no impact on performance.
Nick identifies engagement as a better index, just running engagement alone. His work with companies in this area has seen HR teams stating, “hold on a minute, by supporting our managers we can make a difference at the core”.
Nick argues, we need to stop wasting time on performance management and start focusing on engagement.
If engagement is therefore the tool of choice, how do we operationalise it?
Nick introduces his method called ‘The Manager Dynamo’
6 key factors that a manager needs to do well and consistently to make a difference:
- Role (individual)
- Talent (Individual)
- Career (individual)
- Communication (team level)
- Collaboration (team level)
- Recognition & Praise (team level)
- Tools & equipment
Nick says, “With simple management improvements, focusing on the above can increase productivity by 20% in 1 year. We see; staff turnover reducing, profitability increasing, productivity increasing, wellbeing of employees improving. Engagement leads to transformational trust. HR needs to be focusing on engagement over performance management to support the organisation in scaling up.”
For further information, check out:
The ScaleUp Institute
Elaine Pulakos article published in Cambridge University Press, 2015.
Is there a topic or theme you would love to hear about, or maybe you’re keen to share your work and insights and be one of our guest speakers? At Trapeze HR, we’re lining up our roundtables for Autumn onwards, so please reach out and let us know.