In a recent article in the Journal of Industrial and Organisational Psychology entitled ‘Manage Employee Engagement to Manage Performance’, Saks and Gruman (2011) state that they ‘believe the best way to improve performance management in organisations today is to focus on employee engagement, which is a more proximal and controllable outcome that precedes and predicts performance’ (p204).
Pukalos and O’Learly (2011) recently wrote about performance management too, whereby they claimed that formal performance management involves processes that are not connected to the employees and the relationship level of day to day working. They suggest that to generate an effective performance management system, the focus should be on the relationship level, thereby channelling efforts into the manager-employee interaction and communication between employees. It has been found that the quality of the relationships and communication is key as it can have a ‘profound effect’ on how employees ultimately engage with the performance management system and therefore the outcomes that they then experience.
Saks & Gruman (2011) suggest that in order to create the shift in performance management needed, the manager needs to create three conditions, as outlined by Kahn (1990), to foster employee engagement: increase the psychological meaningfulness of role for individuals; improve psychological safety, whereby one feels able to achieve role performance without fear of harming career or self-image; and enable more opportunity for psychological availability, referring to an individual’s perception of how available one is to taking on the role. These conditions are seen as necessary to foster engagement from employees, creating the necessary environment for individuals to choose to engage in their role and with the wider workforce and organisation.
Saks & Gruman (2011) conclude with a great summary sentence: ‘Thus, fixing performance management requires managing employee engagement to manage performance’ (p206). It is also important to remember that employee engagement research is plentiful, being labelled as the key to organisational effectiveness and competitiveness. Macey, Schneider, Barbera & Young (2009; cited in Saks & Gruman, 2011) found that the top 25% on an engagement index out of 65 businesses from various sectors, had greater profitability, greater return on assets and over double the shareholder value compared to the bottom 25%. It may be that by ‘fixing’ performance management systems that other returns are achievable too.
Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33, 425-442.
Macey, W. H. Schneider, B. Barbera, K. M. Young, S. A. (2009). Employee engagement: Tools for analysis, practice and competitive advantage. Malden, MA: Wiley-Blackwell.
Pulakos, E.D. O’Leasry, R. S. (2011). Why is performance management broken? Industrial and Organisational Psychology: Perspectives on Science and Practice, 4, 146-164.
Saks, A. Gruman, J. (2011). Manage Employee Engagement to Manage Performance. Industrial and Organisational Psychology, 4, 204-207.