What’s the exact value of performance management? At its core, it’s all about creating an environment where employees can perform to the best of their skills and produce top-notch work both effectively and efficiently. Performance management statistics indicate that while this strategic tool is widely accepted, it also has a lot of flaws. That’s the reason why we prepared these essential facts and stats so you can get a better insight, so tune in and stay with us.
Is performance management without ratings better than traditional performance management? Well, according to the latest HR statistics, about 95% of human resource managers admit they are not satisfied with traditional performance management and think that there’s room for improvement. Employees don’t seem to be much more optimistic with 59% believing that traditional performance reviews don’t actually impact their performance.
Performance statistics show that 98% of organizations believe performance management is necessary. And yet, under two-thirds (64%) say they have the right approach to it.
According to a 2019 performance management benchmarking study conducted by Gartner, an even bigger number (82%) say performance management is not effective in meeting its primary goals. Performance stats further show that only 38% of HR managers see it as keeping up with business needs. That is why some industry professionals employ performance management software to align employee performance with the company’s business goals.
Most employees prefer immediate feedback on their work to waiting a year to learn how they are performing at work. Regular reviews — be it weekly, monthly, or quarterly — reduce the pressure and could potentially minimize errors, handling performance issues before they have had time to escalate. Employee engagement statistics further suggest that regular reviews make for more engaged staff.
It would seem that HR managers are in agreement with employees about the frequency of performance reviews. According to a recent study performed by HR Research Institute and BetterWorks, conducting performance management on an ongoing basis is way more effective than annual or bi-annual performance reviews. Experts argue that CPM results in more growth-oriented feedback, enabling employees to achieve their goals.
Companies with the best performance management practices foster a culture that encourages collaboration and communication. Additionally, 83% of HR managers in the financial industry and 79% of HR managers working in retail agree that their respective sectors should focus on a mentoring culture going forward, with an emphasis on the constant exchange of feedback.
There is a growing trend in organizations to focus more on behavior than outcome when assessing performance. According to the latest performance management statistics, only 12% of organizations are asking their managers to focus more on the outcome.
Company performance management was not a top priority in 2021. According to the 2022 Clear Review’s report, 47% of businesses focused on employee development. This percentage, however, dropped to 31% in 2022. On the flip side, the focus on productivity and engagement is rising, the most recent productivity statistics show. 48% of organizations said they are focused on these aspects in 2022, while just 33% of them claimed the same the previous year.
When it comes to how often workers want feedback about their performance at the company, most would want a response at least every month of the year. With this kind of practice, they think that when the time comes for their traditional annual performance review, there won’t be any surprises in regard to worker appraisal.
According to recent research conducted by Gallup, 10.4% of workers stateside felt engaged after receiving negative reviews about their job. On the other hand, around 30% of them began actively searching for a new job after receiving a manager’s negative feedback.
Regardless of whether it is positive or negative, most employees really want feedback from their managers in order to improve their performance at work. This means that creating a feedback culture in the workplace is among the most essential performance management best practices, and as a bonus, requires minimum investment.
The latest feedback statistics show that it’s not just up to managers to nurture a culture of feedback in the workplace. Peer feedback will also be appreciated, especially with stats further showing that 83% of employees appreciate praises more than they do gifts.
A 2021 survey by XpertHR conducted on 344 US-based companies found that 63% of these employers still conduct formal performance reviews once a year. The study also reveals that 18% of businesses conduct their reviews twice a year, while 8% of them do quarterly evaluations. 2% of companies perform reviews on an ad hoc basis, while only 1% of them make an effort to evaluate their employees on a monthly basis.
A recent study found that about a third of employees have to wait more than three months before they get performance management feedback. This is not good news for those who need human interaction and support in order to reach excellence at work. Another 63% of employees meanwhile believe that they are not getting enough praise.
Performance management trends suggest that managers should not only give feedback for the sake of feedback but focus on quality. This is probably the reason why only half of managers feel that employees have acted on their feedback. 28% say that employees have not acted consistently, while 20% feel their feedback was not acted upon at all.
With traditional appraisal systems no longer working properly, employers need to focus on more modern strategies and tools such as employee engagement software if they want improved performance and committed workers. Performance management statistics meanwhile suggest that frequent, quality feedback, is the building block of enhanced employee performance, which ultimately will deliver better business outcomes.
Sources: TruQu, ClearCompany, Gartner, EmploySure, HR, Cision, HRD, ClearReview, SHRM, OfficeVibe, XpertHR