Rewarding poor performance

The 2015 National Management Salary Survey recently published by CMI and XpertHR has revealed that almost half (45%) of senior managers and directors whose performance was rated as “not meeting expectations” received a financial bonus which does back up the headlines about large bonuses being issued whilst companies are failing

A strange as this seems it is not uncommon for managers at all levels to condone or reward poor performance.  The difficulty with doing this at a managers level, its can have a negative impact on the employee engagement, motivation and performance and in worst case scenario the employee’s mimic the managers behaviour as they see it as a way to obtain rewards. Ultimately these issues could impact negatively on the overall profitability and performance of a Company as well as reflecting in the PR around the Company.

Senior managers and directors need to acknowledge that rewarding poor performance happens, and this can be due to having poor reward systems, managers not being skilled in dealing with the situation and the policies of the Company not supporting the managers in dealing with poor performance.  In order to not continue to reward poor performers, companies need to consider the following areas:

Reward and bonus systems

• Ensure that any reward systems in place are robust with clearly defined targets aligned to the business objectives which are justifiable to all stakeholders.
• Ensure that bonus schemes are designed to enable companies to reward and are not written in a way that they guarantee payment with no regard to the person’s performance or the overall performance of the company.
• Ensure regularly reviews of the schemes and make sure measurements are in place to show ROI (return on investment)

Skills

• Ensure the Senior Management Team have the right skills to lead by example and exhibit the behaviour and conduct of an excellent performer
• Have a performance management system to identify areas where people are not performing which will lead to development plans to bring around improvement as well as feed into any reward systems
• Upskills the managers so they can identify poor performers and feel confident in having difficult conversations with staff about their performance
• Provide training and development for all staff to increase their capabilities

Policies and Procedures

• Ensure that the Company’s policies and procedures support managers in dealing with poor performers.
• Use the policies and procedures to clearly outline to staff the standards required by the Company and how they will address any concerns or issues