Sunday 15 September 2013

Job performance vs. employee engagement :: Can managerial assessment of employee job performance impact employee engagement?

I keep reading up on managerial issues that typically have a human resource management bias to them. Two themes that I keep coming across that provide a never ending stream of discussion and debate are on employee job performance and employee engagement.

Trying to make sense of the simple term job performance is challenging. Simplistically it “commonly refers to whether a person performs their job well.” The literature is full of various approaches on how to measure or evaluate job performance but I realised that despite all the ‘hoop-la’, most organisations at a practitioner level typically assess job performance through the lens of a performance appraisal by the manager. I am aware of the potential subjectivity involved in the appraisal of an employee but the challenge is that “How else can one direct scarce resources (money and promotions) if we don’t have such performance appraisal systems?”

Gallup (2013) use a series of questions as a proxy to assess employee engagement and based on a series of scores then brackets an employee into one of three categories:

  1. ‘Actively Disengaged’- Bottom pool of employees that are unhappy and spread unhappiness in the organisation. 18% of employees.
  2. ‘Not Engaged’ - Usually the majority of employees in the middle band that put in time but not energy and passion. 52% of employees.
  3. Engaged: Topmost pool of employees that are identified with words like passion, alignment and innovation; which means that they are passionate, connected to the company and are innovative. 30% of employees.

I came across research that articulated that individuals that are engaged are typically those who are ‘high performers’ and those that are actively disengaged are ‘low performers’. As I tried to make sense of this, I realised that the researchers had used terms like ‘high performer’ and ‘low performer’ to label the employees depending on their level of engagement. I believe this to be a tenuous assertion!

If we assume that job performance is a performance appraisal then it would make more sense to me to juxtapose employee engagement against 'high performers' and 'low performers' in terms that most practitioners can relate to! I concede that that an ‘actively disengaged’ employee is not likely to be rated as a high-performer by their manager but it is also incorrect to state or infer that ‘actively engaged’ or ‘not engaged’ employees are likely to be labelled as ‘high performers’!

I came across a counter intuitive finding from Leadership IQ with the headline "Job performance not a predictor of employee engagement" that argued that the predicted relationship between job performance and engagement did not materialise as the data showed that individuals with lower job performance had shown higher employee engagement!

As expected, this finding was countered by Gallup as they rightly felt that this counter intuitive result needed to be explained given that they have built a substantial case for employee engagement as a contributor to economic success (which I do agree to some degree despite the reality that there is more to economic success than just employee engagement). 

The biggest difference was that the Leadership IQ methodology was based on performance appraisals. Despite the challenge by Gallup and others, I found the findings of the Leadership IQ study very meaningful and in line with my own intuition and experience as a people manager, however, I do believe that given the sensitivity around job performance i.e. performance appraisals and the counter-intuitive association found by Leadership IQ more work needs to be done to understand the ‘forces at play here’.

Despite an individual employee’s effort or assessment of their job performance there will always be a divergence in how a manager views their subordinate’s effort due to stack ranking that is used to differentiate performance. This is compounded where the individual is a poor performer (from the manager’s point of view) but over-rates their own competence and contribution. Where the divergence is high and negative (i.e. where the individual rates themselves higher than the manager) then I have noticed a negative impact to the psychological contract that the individual has with the manager and the organisation typically in roles where remuneration and bonuses are linked to such ratings (not necessarily the case in roles where individual achievement can over-shadow the negative impact of a rating; for example sales roles based on commission/quotas). 

The sad part is that with ever decreasing resources and organisation’s focusing on rewarding superior performer’s we also have the interesting scenario where even that group of individuals who got a standard rating (i.e. a rating which is given to the majority to show that they delivered what was expected of them) feel cheated. They argue that being part of the majority is a bad position to be in! Managing this requires strong managerial assessment and guidance, which is something that most organisations still have to do a better job at.  John Baldoni also cautions - “While I find Leadership IQ’s findings linking high engagement to poor performers to be contrarian, it is not usual for good performers to feel lost in the system. This is a comment I hear not infrequently in my coaching work.”

I have had my fair share of chest-thumping ‘I love my organisation’ t-shirt wearing employees who have their heart in the right place but did not manage to deliver on the objectives assigned to them. They are great people and visibly engaged but not necessarily ‘high performers’ as they may not be delivering on their assigned objectives. Now the question is that once we have ‘burst the illusion’ for such employees then what would be the immediate impact to their level of engagement with the organisation? [I have been personally impacted by this precise scenario and can provide anecdotal assessment of how I felt in terms of employee engagement post the ‘burst the illusion’ moment with my manager!].

I believe that we are perversely impacting employee engagement with inefficient performance appraisal systems and given the volume of 'actively engaged' or 'not engaged' employees one has to take cognisance that there is an opportunity cost to the organisation arising from this.

Another lingering thought is whether our ‘fickle’ employee could possibly show an improvement in their level of engagement if their next performance review is more to their 'liking'?

What do you think? Any guidance or input on this for me?


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  1. Agree; engagement has no discernible link with performance. One can perform, and beat the system by focussing on short-term stratagems and numbers targets, and still be disengaged. This leads to long term harm to the company, as well as the engaged people, who are labelled as average or under-performers, as dont take resort to unethical or short-term tactics.

    Even if you focus on the process: and restructure genuine KRAs to reflect a proper PMS and business profile(as I have been constantly advocating), engagement would still not have a direct link with performance. Engagement has many, many other reasons...

    1. Vishal..thanks for your insight and input..yes agree...engagement has many many other reasons...very complex construct