Research out of i4cp, Inc., a research organization that identifies the practices of high-performance organizations, has found that about two-thirds of the highest performing companies consistently apply performance management processes to their executives and board members. The report, Purpose-Driven Performance Management in High-Performance Organizations, in a survey of 1,427 participating organizations, found that including executives in these processes was a consistent indicator of a high-performance company. In fact, almost three times as many high performing companies applied performance management processes to board members as did lower performing organizations, which helped drive performance.
Not only does including executives convey the idea that performance expectations are exempted for no one, but that leaders are being held accountable for their behavior and are regularly being carefully examined. The survey found that inclusion also led to a positive impact on how employees perceived the pay received by executives, which can sometimes lead to resentment when pay gaps between executives and workers are especially large. In turn, by implementing a more inclusive performance management process, the study found that companies sends more positive messages to employees and consequently improves overall market performance.
The full report discusses a further 16 performance management practices exhibited by high-performance organizations and includes recommendations, action plans, and other performance insights from i4cp member companies. Access to the report requires i4cp corporate membership.