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Bersin by Deloitte Research: Dramatic Changes to How Organizations Manage Employee Performance Drives Demand for New Software

New software applications should focus more on development than appraisal

OAKLAND, Calif., March 12, 2015 — Dramatic changes to how organizations manage employee performance are driving demand for software that focuses more on employee development than appraisal, according to new research from Bersin by Deloitte. Summarized in a complimentary WhatWorks® Brief, the research findings appear in Bersin by Deloitte’s new study “The Guide to Performance Management Software 2015: A Roadmap to Performance Management and the Solutions That Support It.”

Many leading-edge organizations are moving away from viewing performance management as a once-a-year event where employees are assessed and evaluated. Increasingly, organizations view effective performance management as a series of ongoing activities that include goal-setting and revising, managing and coaching, development planning, and rewarding and recognizing. However, support for such activities across current performance management solutions varies widely, according to the study, which looked at more than 120 performance management features from 46 providers of performance management software.

“Performance management software was the most noted software application area targeted for investment in 2014 and 2015,” said Katherine Jones, vice president, human capital management technology research, Bersin by Deloitte, Deloitte Consulting LLP. “According to our recent study, ‘Investments in Human Capital Management Systems 2014,’ 67 percent of the companies studied stated plans to purchase performance management software either for the first time or to replace existing solutions. A key reason for this interest is that the one-and-done annual view of performance management is rapidly falling out of favor as progressive organizations seek to support performance on an ongoing basis — and they need software to support this next-generation approach.” 

The new research looks at many aspects of performance management. However, the research identified one area as becoming increasingly important: continuous coaching.  

“There are many factors contributing to this focus on continuous coaching,” said Stacia Sherman Garr, vice president, talent and HR research, Bersin by Deloitte, Deloitte Consulting LLP, and a co-author of “The Guide to Performance Management Software 2015.” “Work is becoming more dynamic and fast-paced. We see the rise of a large, young generation of employees, along with a skills gap in both developed and emerging markets. Finally, we see coaching as an increasingly large part of the employment value proposition, where employees want to receive individual feedback and feel valued by their organizations for their unique contributions.” 

Despite this increased focus on coaching, the study shows that only a subset of software applications support coaching management and tracking today. Among the study’s other key takeaways:

  • Applications supporting performance management should be agile, simple and responsive to real-time needs – focusing more on development than appraisal, employee strengths instead of remediation, and on data-driven outcomes in place of assumptions.
  • Within many existing performance management solutions, performance goals and the progress toward achieving them are often within the employee’s profile, serving as an easily accessible reminder of key responsibilities.
  • The manager’s performance dashboard should include both the ability to appraise the individual, as well as see at a glance the entire team’s progress on achieving goals.  

Register to join Katherine Jones, Ph.D., and Stacia Sherman Garr for an online webinar, “The Performance Management Technology Revolution: When ‘One and Done’ Won’t Work,” April 9, 2015 2 p.m. ET/19:00 GMT. 

Those interested in learning more about Bersin by Deloitte or its WhatWorks® membership may email info@bersin.com or call +1 510 251 4400.  

About Bersin by Deloitte

Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.deloitte.com/bersin or http://www.bersin.com.  

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.  

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Laura Evenson

Marketing and Communications

Bersin by Deloitte

Deloitte Consulting LLP

+1 415 529 0741

levenson@deloitte.com