The Essential Guide to Performance Management Practices: Part 1 delves into the practices of performance management in corporations today, with a specific focus on their business impact. 

Once viewed as a standalone employee appraisal process designed to feed compensation and promotion decisions, performance management today is the cornerstone of modern talent management.  This seemingly simple process is undergoing significant transformation as organizations embark on automating goal alignment, assessment, coaching, development, and succession processes.

This study is a companion to The Essential Guide to Performance Management Systems: Part 2, a detailed buyer’s guide to the rapidly growing performance management systems market.  Part 2 includes objective, in-depth profiles of 25 solution providers.  Together these studies represent the most comprehensive analysis to date of employee performance management, the foundation for  compensation, onboarding, leadership development, succession management, and other critical talent management processes. Note:  Those purchasing both Part 1 and Part 2 receive $95 off of the combined price. 

The Essential Guide to Performance Management Practices: Part 1 is designed to give HR executives and managers  insight into high-impact employee management processes, with a focus on the best practices for  a variety of different business conditions.  The study also discusses how organizational characteristics – such as business maturity, management culture, industry, company size, and global reach – also influence performance management processes.

Representative Findings:

• More than 80%  of respondents state that their executives believe employee performance management is critical in raising overall company performance.
• Approximately 40%  of  respondents do not believe their current employee performance management practices play a critical role in achieving the business goals and executing the business strategies. To achieve business value, organizations must go beyond the traditional approach.
• Fifty-four percent of respondents cite creating a high-performance culture as a key business driver for supporting and enhancing employee performance management. But only 14 % believe that identifying future leaders is among the key business drivers for employee performance management practices.
• Forty-five percent of HR practitioners say managers in their organization have difficulty  differentiating between high and low performers.  Thirty-eight percent of line managers do not believe they have the training and skills needed to effectively support employee performance management.
• Of companies that have implemented performance management systems, 53%  indicated the systems have had a high impact on business and 35% say the systems had some business impact.
• Performance management based on coaching and development has stronger positive outcomes overall than performance management based primarily on competitive assessment.  Only one third of responding organizations today exclusively use competitive assessments for performance management and these organizations see far less return than those with a coaching and development model.
• While enterprise-wide standardization is appealing, high-impact organizations do not adopt the “one size fits all” approach to performance management.  To maximize business value, high performing organizations tailor practices according to operating functions, geography and culture, legal requirements, and  unique needs of different workforce segments.  Companies that localize key practices report higher employee retention rates.

What You’ll Learn:

• How well-adopted are employee performance management practices today?
• How do employee performance management practices vary across organizations today?
• What are the obstacles that inhibit employee performance management from driving real business value?
• What are the key business drivers for making changes to employee performance management practices?
• Which practices are best and under what business conditions?

About This Research:

This study and its companion, The Essential Guide to Performance Management Systems: Part 2, are based on multiple research initiatives conducted over the last seven months. 

In August 2008, Bersin & Associates conducted  an extensive,  quantitative survey capturing responses from more than 700 HR, learning and development, and information technology professionals  to identify the key drivers, adoption levels, business challenges and trends in corporate performance management and the implementation of  performance management systems.  Thirty percent of the respondents are employed by companies listed in the top 100 of the Fortune 500; 28% are employed by companies appearing in the “100 Best Companies to Work For” list. Over 40% of respondents represent multi-national organizations;  13% are from companies based outside of the United States.

Bersin & Associates analysts also conducted in-depth interviews with 47 HR executives to get a detailed perspective of performance management .  From these interviews, the company identified 10 organizations with performance management practices and processes that yield significant business impact.   These organizations represent a variety of industry segments and range in size from 5,000 to 250,000 employees. 

Finally, Bersin & Associates analysts conducted three-hour briefings with 25 selected providers of performance management systems.  The briefings included system demonstrations that focused on use cases and presentations on company backgrounds and product roadmaps.

For more details, contact Donna Tomlinson at 561 455 0622, x223 or donna.tomlinson@bersin.com.