![]() These are big numbers that strike at the heart of value creation. Over five years, that’s at least $1.1 billion in lost value per company (Exhibit 1). These methodological safeguards allowed us to see a great degree of variability in our self-rated data, especially when participants rated their performance as lower than the group’s average.Īccording to new McKinsey research, employee disengagement and attrition could cost a median-size S&P 500 company between $228 million and $355 million a year in lost productivity (see sidebar, “Methodology”). Berry et al., “A matter of when, not whether: A meta-analysis of modesty bias in East Asian self-ratings of job performance,” Journal of Applied Psychology, 2023, Volume 108, Number 2. Minority-group rating deflation occurred mostly in a research context with students, not with a sample of working adults. Beehr et al., “Relationships between job evaluation ratings and self-ratings of job characteristics,” Organizational Behavior and Human Decision Processes, 1985, Volume 35, Number 1. Multiple performance items were presented, which increases multidimensionality and subsequent rating accuracy, similar to supervisory ratings. Dobbins and Jiing-Lih Larry Farh, “Effects of self-esteem on leniency bias in self-reports of performance: A structural equation model analysis,” Personnel Psychology, 1989, Volume 42, Number 4. ![]() Items were phrased with an external reference or social comparison, which improves accuracy to the level of supervisor ratings. 1 David Bartram et al., “A critical analysis of cross-cultural research and testing practices: Implications for improved education and training in psychology,” Training and Education in Professional Psychology, 2009 Volume 3, Number 2. We surveyed 15,366 workers in seven countries (Australia, Canada, Germany, India, Singapore, the United Kingdom, and the United States) from November 2022 to January 2023 about their job satisfaction, commitment, well-being, and self-reported performance, sorting them into groups by their postpandemic working model (mostly in-person, hybrid, or mostly remote).įour steps were taken to reduce bias from self-reported data and increase their validity: all data were normalized within groups to reduce inflation and deflation issues. For more, see “Rekindling US productivity for a new era,” McKinsey Global Institute, February 16, 2023. ![]() According to recent analysis from the McKinsey Global Institute, boosting US productivity represents a $10 trillion opportunity. Furthermore, worker productivity grew by just 1.1 percent, which is the lowest growth rate since 1981. Unit labor costs in the nonfarm business sector increased 4.2 percent in the period, reflecting a 2.1 percent increase in hourly compensation and a 2.1 percent decrease in productivity. 1 The US labor productivity rate in the first quarter of 2023 declined at its fastest rate in more than 75 years, according to the Bureau of Labor Statistics. Due in part to new hybrid and remote-working models, companies are struggling to find objective ways to gauge employee effectiveness-a critical challenge as labor costs have increased and worker productivity has declined. The pandemic has forced major changes in how, when, and where people work.
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