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Performance Management for Better Business Results

Performance Management for Better Business Results

Performance management is the foundational element of any organization’s talent management efforts.  It represents all of the processes that managers use to effectively lead, manage, develop, reward, and assess employees.  In reality, performance management is management.

Despite its fundamental role, many organizations pay too little attention to performance management.  It is commonly perceived as an event-driven process, epitomized by the personal appraisal.  Our research shows that high-impact performance management is about much more than these events – it is about supporting performance on an ongoing basis.  As such, effective performance management is a series of ongoing activities – goal setting and revising, managing and coaching, development planning, rewarding and recognizing – with performance appraisal events interspersed throughout.  Performance management is not something that high-impact organizations “do,” but instead is a way that work gets done.

Why is this shift to ongoing performance management so critical?  Quite simply, organizations with an ongoing focus on performance management have better employee, talent, and business results.  For example, organizations that have employees revise or review their goals quarterly or more frequently are 45% more likely to have above-average financial performance and 64% more likely to be effective at holding costs at or below level of competitors.

This shift to continuous performance management starts with HR.  HR needs to set the expectation that the purpose of performance management is to support and improve performance – not just to assess it.  As such, performance management is the ongoing responsibility of everyone in the organization.  HR’s role is to provide the resources and support that make it easier to manage performance.

Our new Performance Management Framework is designed to help HR organizations transition performance management from an event to a powerful ongoing business activity.  The Framework gives you an at-a-glance image of how all the elements of performance management fit together – and the topics, activities, and processes that you should consider when designing or upgrading performance management.

This new research can be a foundational document when revising your performance management processes. Our other research supplements it, providing best practices and benchmarking data for each of the activities within the performance management process. 

Members can download The Performance Management Framework: Evolving Performance Management to Fit the Modern Workforce

Members and non-members can watch a recording of Senior Analyst Stacia Garr’s recent webinar, The Performance Management Framework: Evolving Performance Management to Fit the Modern Workforce.