Performance management remains a hot topic that has been revisited a lot in recent years; with questions over the value that the traditional SMART performance objective driven and formal 6 and 12 month form completion processes can bring. The onus now appears to be on the importance of ongoing open and honest communication – and more importantly the ability of our managers to have these quality and constructive conversations.
With this in mind, we asked delegates at the recent Maritime HR conference to discuss the pros and cons of their performance management systems. The majority of the group (representing both sea and shore) did report having performance management systems already in place, but acknowledged the following key challenges:
- It’s difficult for most people to have poor performance conversations
At sea, a good practice example was to have a ‘joining performance conversation’ at the beginning of any voyage – therefore setting the scene about expectations, providing a recorded and agreed record of expectations and a marker from which to benchmark performance thereafter.
- Communication, Communication, Communication
A better understanding of the appraisal process generally was felt to be important in all instances, to help change perceptions and ensure fairness and equity rather than to allow favouritism and friendship come into play. There was quite clearly an appetite to see and feel improvements in general in this area.
- Performance related pay
Some of the group reported to have individual performance related pay in place – usually bonus specific – putting more importance of the reliability and relevance of the appraisal process. However, a lack of experience among managers can be a serious issue allowing inequality to creep in.
The bell curve distribution (as shown right) was still applied in some instances – allowing larger companies to identify where to focus their efforts in terms of rewarding and retaining their top talent. However, maintaining engagement and performance levels for the majority of the workforce falling within the ‘average’ category is becoming increasingly important. Employees want to be treated equally and be considered individually rather than compared to their peers (when subjectivity can be a factor).
- Should we even bother?
Ultimately the question was posed as to whether performance management is even necessary. The process can be felt too cumbersome and relied upon too heavily as the only method of performance communication between managers and their employees. It then becomes effectively a tick box exercise for some people managers. The challenge of not having a performance management system is whether our industry, and indeed our managers, are ready for a more relaxed approach.
- Making it work for the individual
Using the appraisal process for career progression, recognition and reward purposes can be especially difficult in industries such as maritime where experience is valued so heavily but turnover can be low. Operating within fixed grading systems or pay scales can be further prohibitive. A cultural shift towards recognising personal achievements (such as broadening knowledge and skills sets) rather than simply rewarding for increased responsibility (i.e. as people move the career ladder) could be key in the future.
- Use of other tools to support the process
360 degree appraisals received mixed reviews but are a popular tool for some. The output can provide independent feedback to support managers in delivering performance and development conversations. Retention schemes were also mentioned, with one participant offering a retention incentive equivalent to $1 a day – paid after 100 days’ service, increasing to $2 a day for the next 100 days etc. Naturally there needs to be some caution with service related benefits since they can disadvantage female employees who take time off for family reasons – so mitigating the impact of this is an important factor in the detailed design of any such scheme.
It was recognised that performance management of some form is critical for organisational success. At its core, this should include regular, effective feedback on progress towards objectives (not simply to fulfil the process requirements or to determine pay levels). However, organisational strategy, cultural considerations and global mobility will mean there is no ‘one size fits all’. What was deemed critical for all employers was to:
Provide opportunities for employees to improve, develop and progress through on going performance management conversations, taking place at least 3-4 times a year.
If you want to discuss people challenges such as this with industry professionals at next year’s Maritime HR conference, please get in touch via email@example.com