Performance Management in 2020: Key Finance Industry Insights

This summer, Reflektive launched a Performance Management Benchmark Report to identify both consistencies and changes in how companies run their performance programs. While the analysis in the reports spans all industries, we decided to share interesting trends in the financial services industry in this blog post. 

Our responses from 445 HR professionals and business leaders uncovered some similarities between finance and other industries, such as approaches to performance conversations and the involvement of leadership in continuous feedback programs. Where finance leaders have responded differently is in their emphasis on employee productivity. Financial services firms are also more likely to use 1:1s, and anticipate more workforce changes in the future. 

Consistencies with Peers in Performance Conversations, Partnership with Execs

First, let’s start with the similarities between the finance industry and other sectors. Sixty-three percent of finance respondents – and 63% of all respondents – separate performance conversations from developmental conversations. Per Rachel Ernst, CHRO at Reflektive, this is a best practice that all companies should strive towards. “Having separate conversations on development gives autonomy to the employee — they can initiate these career discussions when they’re ready. Additionally, performance conversations can be stress-inducing for employees, so having a separate dialogue on development helps workers get into the right mindset for career discussions.”

Another commonality between financial services firms and their peers is the usage of performance ratings as one of many factors in determining employee compensation.

Finally, finance leaders responded similarly to the peer average regarding their partnership with leadership. When launching continuous feedback programs:

  • 37% of finance respondents (vs. 31% of their peers) reported that an executive initiated the change
  • 37% of finance respondents (vs. 33% of their peers) said that an executive sponsor is involved in the program strategy
  • 26% of finance reponsents (vs. 28% of their peers) reported that executives are informed of the shift to continuous feedback

Finance Industry More Likely to Leverage 1:1s, Employee Trainings

To drive their continuous feedback programs forward, financial services firms reported higher adoption of 1:1 conversations and employee training sessions. Regarding 1:1s, finance respondents were:

  • 34% more likely to provide employee feedback via 1:1 conversations
  • 47% more likely to encourage leaders and managers to address employee concerns via 1:1 meetings

“Regular 1:1 meetings provide a great forum for having different types of conversations,” says Rachel Ernst. “Whether it’s providing feedback on a recent project or learning about employee needs, a recurring meeting enables managers and employees to have productive conversations on an ongoing basis.”

Similarly, financial services firms prioritize their culture of employee growth and development:

  • While 62% of all respondents said that educate managers and/or employees on continuous feedback, 84% of finance respondents said that they do
  • Financial services firms are 27% more likely to spend time on learning and development versus their peers

Finance Sector Places Higher Value on Productivity

Another difference between the financial services industry and other sectors is that the former places more emphasis on employee productivity. Per the survey data, finance respondents were:

  • 74% more likely to say that productivity is the most important purpose of performance management
  • 42% more likely to measure the health of their performance programs via productivity

However, the emphasis on productivity may come at the expense of employee workloads. Survey data also indicates that finance respondents are:

  • 1.2X more likely to expect team members to work longer hours
  • 82% less likely to encourage managers to revisit employee goals and workload

Marc Caltabiano, Chief Product Officer at Reflektive, uses 1:1 conversations and leverages data from Reflektive engagement surveys to gauge employee sentiment around workload. “Questions from our surveys on remote working and work-life balance, as well as what I learn from 1:1 conversations, help me easily understand key themes for the product team and where I should be taking action.”

Looking Ahead: More Workforce Changes

Finally, finance leaders anticipate more workforce changes versus their peers in other industries:

  • 37% of finance respondents expect workforce changes later in the year, which is 1.2X higher than the peer average
  • 53% of finance respondents are spending time on workforce planning, which is 39% higher than the peer average

Per research from Oliver Wyman, leading financial services companies will lean more on technology to drive up productivity and increase returns. “Ensuring that employees are aligned and engaged will help finance firms of all sizes navigate the rest of 2020,” says Rachel Ernst. “Performance management systems such as Reflektive help employees stay on track and prioritize the most critical projects.”

Financial services firms are leveraging 1:1s and employee education to drive improved productivity, but can benefit from better alignment and efforts to address employee workloads. Per Rachel Ernst: “By really listening to employee feedback – and taking steps to address their needs – financial firms can create a culture that motivates people to do their best work.”

Interested in learning more performance best practices for finance companies? Schedule a consult with an expert.