Effective Performance Management not an Easy Task

November 9, 2010 (PLANSPONSOR.com) – Implementing a performance management program may be easier said than done, according to a new survey by WorldatWork and Sibson Consulting. 

A news release said the top three performance management challenges that organizations reported are that managers lack courage to have difficult performance discussions (63%); performance management is viewed as an “HR process” instead of as a “business critical process” (47%); and, that they experienced poor goal setting (36%).

Fifty-six percent of organizations invest in manager and employee training to make performance management more effective, according to the poll. A similar percentage of respondents (55%) reported that managers complete their assessments on time. However, far fewer organizations (28%) felt their managers focus on having effective performance conversations, rather than just completing forms.

According to the announcement, the top three goals of performance management are differentiating distribution of rewards based on individual performance (66%); establishing greater individual accountability (54%); and, supporting talent development (46%). Evaluations from performance management are much more likely to be linked to merit increases than to either short- or long-term incentives.

Senior management in higher performing organizations is more likely to support the performance management process than in lower performing organizations.

“To improve performance management, an organization must analyze not only the design of its program, but also the key drivers of a successful system: leadership and execution,” researchers commented in the report. “The organizations getting the most impact from performance management are those that have strong leadership support and that execute well in differentiating performance and giving performance messages. The 2010 study indicates that the groundwork is set for performance management, but the value comes when organizations look beyond the challenges, engage senior leadership and use performance management as a tool to differentiate performance and drive business results.”

The research surveyed more than 750 individuals, primarily senior-level HR professionals. The research report is here.