Managing Performance; A Road Less Traveled?

November 28, 2005 ( - Two new surveys have found that both employees and employers alike agree that there is plenty of room for improvement in implementing best practices for measuring employee performance.

A Watson Wyatt news release said that most employers reported not having been successful as they’d like in implementing the performance review standards. While 92% of programs are designed to link pay to performance, only 79% of employers say that managers at their organization are moderately or greatly effective at it. Employees see even more room for improvement with only 52% indicating that their managers tie pay to performance.

Best practices adopted included providing a formal yearly review (98%), helping poor performers improve (9%) and offering coaching and feedback (91%). The announcement said that the findings come from a survey of 265 large US companies across all industries and a complementary survey of 1,100 workers conducted by Watson Wyatt and WorldatWork, a compensation trade group.

“Without improving the implementation of their programs, employers will have difficulties with aligning the performance of their workforce with business results,” said Laura Sejen, director of strategic rewards consulting at Watson Wyatt, in the announcement. “In fact, companies with strong performance management programs post significantly better financial results than those with weak programs.”

Managers also struggle with providing formal career development and planning. While the vast majority (82%) of performance management programs are designed to include career development, just under 40% (37%) of employers say that managers at their organizations are at least moderately effective at providing it. Only 31% of employees say their companies offer career development.

Only 36% of organizations have a formal training program to enhance managers’ ability to manage rewards. However, managers at companies that offer such a program are more effective at providing coaching and feedback, providing formal periodic performance discussions and helping poor performers improve.

Additional findings:

  • Providing formal goal-setting linked to business objectives is a design component of most (91%) performance management programs, but only 74% of companies say that their managers are moderately or greatly effective at it.
  • Fewer than six in 10 employers (57%) think that managers at their organization are moderately or greatly effective at providing coaching and feedback to employees throughout the year; 48% of employees report that this is the case.

More information about Watson Wyatt is at .