When budgets are limited, investing in your top brokers may seem like the best bang for your buck, but experts warn you may be limiting your brokerage by doing so.
When budgets are limited, investing in your top brokers may seem like the best bang for your buck, but experts warn you may be limiting your brokerage by doing so.
Research released in the latest Hays Journal shows a growing number of organisations are finding difficulties in the more traditional ‘top-tier focus’ approach and are choosing instead to invest in the larger, mid-performing group of workers.
Mike Bourne, professor in business performance at the Cranfield School of Management, described some of these difficulties to Hays.
“Bluntly it’s a total minefield. Immediately you’re in the realm of trying to define performance. To start with, is it even possible to distinguish between mid and top-performing people and then is it desirable to focus on just one of these groups?”
Bourne also found that businesses that create a double-tiered performance system tended to establish goals for each tier that limited performance.
“Targets act as stimuli for everyone, but striving for the unachievable is disengaging and can lead to perverse behaviours, such as increased risk-taking,” he said.
“Meanwhile those at the top are likely to underperform, even on easy goals, if their only reward is likely to be the setting of harder goals next time.”
Phil Jones, CEO of strategic performance consultancy Excitant discovered a rivalry developed between the two tiers, whereby the top-tier actively prevented lower performers from advancing in order to maintain their position.
Looking at new ways to measure success, says Jones, can help to ensure that brokers who only perform at the expense of others are not rewarded.
Moving towards a culture of continuous, rather than annual performance measurement can form a part of the solution, suggests Jones.
“Business is so faced paced, yearly reviews are meaningless. What happens if the direction of the business changes in month eight of the year?”
Hays Journal gives the example of eBay as a company with an innovative performance measurement style, whereby employees are assessed in relation to their work relationships and the performance of their current team.
Another emerging strategy suggested by Hays’ research is to measure ‘capability’ through generic or innate verbal and mental reasoning tests and then measuring this against performance.
Jane O’Neill, director of Hays Banking, believes that a shift away from the ‘top-tier’ focus is what can give brokerages an advantage over their competition.
“We have seen a great deal of investment in talent management by organisations since performance management was introduced in the 1970s, but the model of focusing on a small group of employees has stayed pretty much the norm,” she says.
“In today’s increasingly complex business environment some organisations are now challenging the narrow focus of the past. This sort of innovative thinking is how these organisations stay ahead of the pack.”
