Benefits December 17, 2002

Employers Recognize Weakness In Evaluation Process

December 17, 2002 (PLANSPONSOR.com) - Employers say they are better at appraising employees than providing coaching and ongoing performance feedback, the Mercer Effective Performance Management Practices Survey has found.
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More than three-quarters of the 300 North American employers surveyed said their managers regularly conduct annual performance reviews and provide performance feedback and ratings, but only 26% said managers routinely provide ongoing, constructive performance feedback and coaching to employees

Asked what one area of their performance management system they would most like to improve, the study found:

  • 25% – performance planning
  • 14% – ongoing feedback and development
  • 11% – leadership and management accountability
  • 11% – consistency between raters
  • 9% – training and communication
  • 8% – automation

Effectiveness

However, asked to assess the overall performance of their management system, including performance planning, feedback, evaluation, and development, nearly half (48%) said their system is effective to some extent and 33% rate their system overall effective in achieving the company’s desired result, with 1% saying the result is achieved to the greatest extent.  

Conversely, 15% say their system is effective to a little extent and only 3% responded that it is not effective at all.

Overall, respondents reported the top four areas, out of 25, of their performance management system considered strengths:

  • Managers conduct annual performance reviews with employees and openly communicate year-end performance feedback and ratings
  • Performance management practices are similar across business units
  • Employee performance expectations emphasize customer focus and responsiveness
  • Alignment between performance ratings and rewards

On the other end, respondents rated the four areas that need the most improvement in their performance management system:

  • Ongoing or refresher training and communication on the performance management system for employees
  • Alignment with other talent management processes, including career development and succession planning
  • Managers base performance ratings on feedback from other knowledgeable sources

Managers receive ongoing or refresher training and communication on the performance management system.

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