Strategic performance management

CEO's set bullish performance targets - but can they deliver?

New Hay Group performance management research highlights a mismatch between ambition and capability. Businesses need to approach performance management differently if they are to achieve their ambitious growth targets for 2011 and beyond. That’s the message from new Hay Group research among 1660 senior decision makers in large firms across more than 30 countries worldwide.

On average, global firms are targeting 5.4 per cent growth in 2011, outstripping local economic forecasts in many markets. With executives remaining cautious about acquisitions, the majority of leaders we spoke to are looking to their workforces for this performance uplift. Yet nearly half think employees are too stretched.

As Hay Group’s global head of strategic performance management Bibi Hahn comments: “This level of productivity improvement is a big ask from employees who have worked hard to help their firms through the three difficult years since the worst of the financial crisis. Stuck in crisis mentality, business leaders have become too reliant on the cost lever to stay afloat. It’s time for them refocus on growth by pulling the performance lever.”

The leaders in our survey are all too aware of the risks involved in asking stretched employees to deliver more. Employee disengagement and high staff turnover are their top fears. Most respondents are aware of the potential of performance management to address this, yet few firms make the essential connection between performance management, strategy and business culture.

As Bibi Hahn points out: “Ninety per cent of firms are failing to align performance management with their strategy and culture. Without an approach that does this, firms will not be in the right shape to deliver the growth expected of them.”

About the Strategic Performance report

This is a report from Hay Group, based on independent opinion research among senior decision-makers in 1660 firms from over 30 countries across Western, Central and Eastern Europe, North and Latin America, the Middle East and Asia-Pacific. All respondents represent firms with in excess of €250 million annual turnover. Research was carried out by independent market research agency Coleman Parkes. About 30 Belgian companies participated to the survey.

The Strategic performance management report can be downloaded in October at: www.haygroup.com/ww/spm

To learn more about these issues and how leaders can manage business growth in the future, download the executive summary 'The business of performance management'

To find out more about how one client took performance management to the next level read the "Chocs & Co" story.

If you want more information about the Strategic Performance survey, please contact Simona Hollinger at 02/332.33.04 or by mail simona_hollinger@haygroup.com