Performance management is one of the most important strategies your company has. By defining goals, evaluating progress, and coaching employees, you can unlock engagement, define your workplace culture, and drive business success.
Your continuous performance management strategy is more than just a schedule for performance reviews. It truly connects employees to how they have an impact in the organization.
How can you be successful with your approach to performance management in a constantly changing workplace? Take note of trending performance management statistics. Let performance management research guide your best practices.
For over 20 years, Quantum Workplace has collected and studied employee experience data and partnered with thousands of organizations who know what it takes to inspire performance. Our research has measured over 1 million voices from the most successful companies in the U.S. through the Best Places to Work contest.
You can use the performance management research below to create a successful strategy that will drive high-performing teams and help you meet your organizational goals.
Your performance management strategy is an essential part of business success. It helps measure, develop, and motivate employees to do their best work. Employees want to contribute toward the organization’s goals. Through performance management, you can show them how their work helps meet company goals. It helps unify teams behind a purpose.
Performance management should be woven into the fabric of who you are as an organization. Here are all of the things your performance management strategy helps you accomplish:
Through clear, aligned goals and conversations about performance, employees understand how their everyday work impacts the organization. Their work has meaning and purpose.
Your performance management system should help you track progress and guide team members. Managers coach employees in performance and development. By identifying employee strengths, you can harness their potential and align it with organizational priorities.
Lack of career growth is one of the main reasons employees leave. Your performance management system can help you outline growth opportunities, showing employees they’re valued and have a place in the future of your organization.
Employees want to feel valued for their contributions. You also want to show employees what great work looks like. Employee recognition solidifies your performance management approach by connecting work back to core values and showing employees that their work matters.
When you recognize employees for their work, they feel invested in. When they see growth and development opportunities and experience a magnetic workplace culture, they’re more likely to stay at their organization.
All of these aspects are part of a robust performance management framework that engages employees and drives impact. This is a key part of the employee success equation. You want your performance management to connect to your holistic talent management strategy.
Performance management also must be engaging for employees. And it should contribute towards creating a magnetic culture employees want to be a part of. Performance management is an element of employee success. And when employees are successful, it leads to positive results for your organization.
You don’t want to create your performance management strategy on a whim. Here are the most important performance management statistics you need to know before you craft your performance management approach.
Employees say that the current state of performance management isn’t a good use of time. With a concentration on efficiency and effectiveness, we also want the performance management process to be efficient and effective. And employees are saying it’s not.
So what can we do to make performance management better? How do we make sure employees feel performance management is valuable?
Many employees want more feedback from their managers. Performance management statistics tell us that it’s not just individual contributors, everyone wants feedback. They want it more often. And when they get it, they’re more engaged.
We tend to focus on feedback for individual contributors. But managers and leaders need performance feedback as well. And managers and leaders say they’re not receiving enough feedback about their performance. That might be because we’re providing more feedback on day-to-day work instead of performance as a manager or leader.
Everyone needs feedback on how they can improve their performance. Every employee at every level.
The more employees set goals, get manager feedback, and are measured for their performance, the more engaged they are. Performance and engagement are intrinsically linked. There shouldn’t be a pendulum swinging back and forth between engagement and performance efforts. They should feed each other to create an environment of employee success.
This data also verifies another key factor. Managers are front and center in these activities. We don’t forget the role they play. The problem is that we often fail to support them. We can do more to help our managers drive performance in an engaging way.
Managers are the key to improving performance, according to employees. All of the aspects employees say are effective at improving their performance involve managers. Or should involve managers. Employees want and need feedback from their manager to improve performance. 1-on-1 conversations with their manager and performance ratings round out effective performance management components.
Processes are important too. Formal review processes and goal setting processes help employees understand how they’re being measured and what success looks like. Employees also say that performance management tools and software are helpful in improving their performance.
We already know from performance management statistics that employees want frequent feedback and like to have weekly 1-on-1s with their managers. But managers and employees aren’t using performance management tools at that cadence. Software usage should align with the frequent performance conversations employees want.
Performance management software can help document the performance management conversations and system and make it more effective.
When managers say they use performance management technology, they say they’re better managers. Tools help managers be more effective and efficient.
Technology can help managers have better performance conversations, align individual goals to team and organizational goals, and recognize employees in a meaningful way.
Software also gives managers the power to dive deep into their team’s engagement. That may seem to be on the engagement side of the spectrum. But engagement and performance are linked. The best approach to performance is a process employees should find engaging. If your approach to performance isn’t engaging, you’ll see that reflected when you measure engagement.
Aside from performance management tools, managers say we can make them more effective by supporting them in four things.
What makes a performance review effective? Actionable advice. And employees say there’s a big gap between what they need and what they’re getting. Employees are telling us that they need feedback they can act on during their performance reviews. That makes sense. To improve, you need to know what to improve. However, most organizations’ performance management process is more traditional rather than continuous.
2 in 3 employees receive annual performance reviews instead of more frequent conversations (monthly or quarterly). If employees only get the feedback they need to improve their performance once a year, that’s not enough to make corrections and maximize potential growth and impact on the business.
What part of performance reviews helps employees improve performance? Employees want a review that is forward-focused and development-centered. What makes a performance review look forward instead of back? A continuous approach to performance management that includes actionable advice and career growth discussions. These are the conversations employees say they need to make improvements to their performance.
Regular performance conversations are also connected with engagement. Engaging performance reviews inspire employee impact. Employees also say that these elements (rather than receiving a rating) help performance reviews feel fair.
Just like with feedback, most employees say they want more recognition for their work. They want recognition more frequently. And more recognition is tied to engagement.
What do employee want recognition for? The most preferred reason is their performance or accomplishments in their role.
All of these performance management statistics should help you shape your performance management strategy and address challenges along the way.
Performance management isn’t a set it and forget it process. Your organization should be constantly making changes to the process to emphasize employee impact. And those changes should be backed by performance management research.
Before you make changes, it’s helpful to evaluate the common challenges organizations face when shaping their performance strategies. And think about the vital performance management statistics that should influence your approach.
Without trust between employees, managers, and leaders, we can’t maximize performance. When it comes to performance management, organizations need to do more to build trust. Part of that is building trust in the process.
Most employees don’t join an organization to do poor work. Employees want to be successful. Leaders want employees to be successful because that’s how the organization reaches its goals. To build trust in the performance management process, be transparent and communicate clearly. Make sure employees understand what their goals are, how they contribute to the organization’s objectives, and how employee performance will be measured.
Performance management impacts engagement. But not traditional components like ratings or pay-for-performance.
Quantum Workplace research shows that the top performance drivers that impact engagement are recognition, fairness, alignment, feedback, and empowerment. When you’re making sure employees find your approach to performance management engaging, start here.
The way you approach performance management shapes your organizational culture. Half of employees say their organization’s approach to performance management is how they feel the company culture. And a much higher factor than the physical workspace.
Company culture is how your organization gets work done. And your performance management strategy shows your organization what that looks like.
There is not a one-size-fits-all approach to performance management. Every organization is different and has their own unique path to performance. But one important performance management statistic emphasizes that employees want a more continuous approach rather than a once-a-year performance appraisal.
Before the panic sets in, you don’t have to change your performance management overnight. You can take one step at a time and find the middle ground of performance management. How?
Employees and managers want to be part of the performance management conversation. They want to contribute, rather than let performance management happen to them. So make them part of the process.
Get feedback from employees and managers about your current program. Use that feedback to improve your performance practices. And then let employees know you listened by attributing the changes back to their feedback.
There are fewer confusing things than not understanding what your goal is and why it matters. Employees need to see how their everyday work impacts the organization. That’s why connecting the dots for them is important. It motivates high performance.
Employees are 3.2X more likely to be engaged when their performance goals align with the organization’s goals. And the more they set goals, the more likely they’ll be engaged.
Employees often feel like performance reviews are not a fair way to evaluate their performance. But there’s a solution. When managers can have a human conversation backed with data, the performance review feels objective and fair. And when the cadence of those conversations is more frequent, employees feel like they have time and support to make performance improvements.
Equip your managers to have more meaningful conversations instead of backward analyzing reviews. Your performance appraisals need a sense of fairness. Make sure these conversations are looking forward with actionable advice and pair that with growth opportunities.
Recognition is a form of feedback too. Feedback doesn’t always have to be critical. Meaningful feedback can reinforce the performance you want to see.
Show employees that their contributions matter. When you’re recognizing excellence, be specific. Relay what is working and why.
Quantum Workplace research shows that managers feel they’re more impactful when they have performance management software that helps them do their job. And we know that managers are an important part of the performance management process.
Make sure your managers receive training in how to use your performance management platform. Show them how it can make them more effective and efficient. Help them increase usage to be more aligned with the frequent feedback and 1-on-1 frequency employees crave for improved performance.
These frequent issues in performance management can help you shape your new strategy. Review the performance management statistics outlined above. Analyze your current approach and follow best practices backed by research to make meaningful adjustments.
Performance management is hard to get right. But that doesn’t mean all is lost. In recent years, organizations have made changes to their talent management processes. Employees are noticing those changes. All of the influential performance management statistics above show that organizations have continued to improve this process.
Almost 75% of employees saw changes to their performance management processes in the last year. Change sounds scary. But this is good news! Performance management often changes over time to a more effective and efficient process.
And while changes are happening, employees say they don’t feel like it’s a problem. Almost half of employees say that their organization’s performance management processes aren’t disrupting their work.
Employees are saying they’re getting more frequent coaching from their managers and setting goals more often. But the work isn’t done. Employees still want a better process.
Organizations can get there by:
Many organizations are stuck in a traditional approach to performance management, with performance reviews occurring annually. But this goes against what employees say they need to improve performance. They need more continuous feedback and performance conversations so they can quickly act upon their manager’s advice and make improvements.
What should be part of an effective performance review?
The content of performance reviews is important. But don’t overlook the frequency of performance conversations when it comes making meaningful improvements.
When employees have the tools they need to be successful, they are motivated to perform.
Employees want to see the impact of their work. They want to get frequent feedback that’s helpful in improving their performance. They want to understand how their performance is being measured. And employees want to see how their contributions influence business success. It’s all about reinforcing employee efforts with the big picture.
How do you create high-performing teams?
Performance management statistics show that employees want to contribute to the organization’s success. Leaders want the organization to be successful. The way organizations fuse these components together is through their approach to performance management.
By having an intentional strategy backed by research, organizations can harness the full potential of performance management.
Published September 6, 2024 | Written By Kristin Ryba
