The latest study by HR.com’s HR Research Institute (HRRI) reveals that just 45% of organizations believe their performance management (PM) processes effectively meet critical outcomes to a high or very high degree. These outcomes include meeting organizational PM goals, improving employee performance, enhancing employee development, and providing better legal protection.
The report highlights key trends and strategies for improving performance management efforts. While the findings indicate that organizations are making progress, there remains significant room for improvement in the effectiveness of PM processes. The study underscores the challenges many organizations face in achieving effective PM plans, despite positive strides being made in certain areas over the past two years.
Specifically, organizations have shown increased efforts in key performance leadership areas such as more frequent one-on-one meetings with managers (41%), greater employee input into performance goals (36%), and managers aligning employee goals with business objectives (36%). These advancements suggest a growing recognition of the importance of performance leadership in achieving overall success.
The research further indicates that organizations that excel in performance management are over twice as likely to have leaders who view PM as crucial for improving performance, nearly twice as likely to use digital technology for PM to a high or very high degree, and over 1.5 times more likely to provide training to managers for PM.
Despite the widespread adoption of digital technologies in performance management, the study found that only 42% of organizations apply these tools to a high or very high degree. This gap suggests that while technology is being integrated into PM processes, many organizations still struggle to leverage these tools effectively.
Debbie McGrath, Chief Instigator and CEO of HR.com, commented on the findings, stating, “Continuing these positive advancements, especially with performance leadership efforts, will be the key for the future of performance management success. Also, applying the right automation is essential for meeting organizational goals, enhancing employee performance, and fostering better employee development.”
The full research report, HR.com’s Future of Performance Management 2024-25, is available for free download and offers detailed insights and actionable recommendations for HR professionals looking to build more efficient and effective PM initiatives. Additionally, a recording of the research webcast presentation, The Evolution from Performance Management to Performance Leadership, is available for viewing on demand.
