HR Professionals’ Perceptions About Performance Management Effectiveness

A survey, conducted by SHRM in collaboration with the National Center for the Middle Market, explored HR professionals’ opinions on their organizations’ performance management systems and their implementation. Nearly all HR professionals indicated that performance management was either a top priority (30%) or given some attention and resources (65%) in comparison with other business issues at their organization. However, despite the reported importance of performance management systems, HR professionals gave these systems mixed reviews.

Key Findings from the study include; • HR professionals’ opinions are mixed regarding the effectiveness of performance management in their organizations, although the vast majority did say that performance management would either be a top priority or receive some attention in the coming year. And although there has been increased scrutiny lately on the benefit of conducting annual performance appraisals for employees, identifying strengths and weaknesses among workers has become particularly important for compensation strategies.

• Research has shown that many employers are placing less emphasis on blanket merit salary increases for their staff and are now channeling more resources toward incentive programs and variable pay structures in order to reward top performers who consistently meet goals. Conversely, low performers are seeing smaller increases in pay. Performance management analysis has consequently become a key component of compensation reviews.

• Overall, the data suggest that many more firms should make performance management a priority and ensure that their HR capabilities are developing at a pace that can keep up with the growth of their business.

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