At its best, the process should help organizations align, motivate, identify and develop talent. And both business and HR leaders believe that this process can raise overall company performance. This is why nearly every organization has an employee performance management process in place today. Yet despite all the interest and focus, very few organizations believe that it actually drives business value. In our recent performance management research study, we found that a whopping 41 percent of organizations do not believe their current employee performance management practices play a critical role in achieving the business goals and executing the business strategies.

So what do companies do? They tinker.   In an attempt to make “improvements”, HR practitioners change the process year after year -- only to end up with an overly complex, confusing, and time consuming process. Some “thought leaders” claim that we should just do away with performance management altogether. I don’t believe this is the answer. After seven months studying how high impact HR organizations (including high-performing companies such as Lowe’s, Children’s Hospital of Atlanta, Seagate and Target) approach employee performance management, I believe the answer clear: re-focus on the basics and keep it simple.

Consider a case in point: An HR leader at Bank of America told me that several years ago they implemented a sophisticated approach to help identify future leaders. The approach, which was very complex and time consuming, was not well-received by managers. After interviewing managers, the HR department found that the managers did a better job of identifying future leaders on their own than with the new approach. Eventually, they restored the original process so that the manager decides on their own which employees they will bet on for the future.

We suggested the following actions to simplify and optimize employee performance management in your organization:

1. Ensure managers and employees are clear on the primary purpose of performance management as well as the tangible benefits to them. Is it to align employee goals to the business goals? Is it to fairly compensate and reward employees? Is it to identify high potential employees and top performers? Is it for development purposes?

2. Design the performance process to be in line with the business processes they follow today. For example, your company’s strategic planning and budgeting process should inform and influence performance goals and talent planning activities. Performance management should be designed as part of the same communications and workflow if it is expected to drive business results.

3. Instead of working tirelessly (and often without much success) to define job competencies at a granular level, simply evaluate all employees against a standard competency model of five or seven core competencies important to the organization with the expected behaviors identified for each job. Many of the most effective companies I interviewed trimmed their competency models down to five competencies.

4. To ensure that the focus is on the employee and manager conversation, make sure that the performance management practices are intuitive and easy to complete. We found that technology solutions really make a significant difference in ease of use and overall business impact. Not only do modern performance management systems help to standardize and automate the process, they also include performance support functionality for end users (e.g., wizards, starter content, and writing assistance).

Bottom line: keep it simple.

For more information and guidance for designing employee performance management practices, check out our comprehensive research report – The Essential Guide to Employee Performance Management.