Objectives for Performance Management

The third annual State of Performance Management Study, conducted by HR.com and sponsored by LightWork® Software, reports that the primary objectives of performance management are employee and organization growth, at 71 and 70 percent respectively. The more than 340 human resource professionals that took part in the study are from across the globe but are primarily in the U.S. They represent companies with as few as 50 employees up to 20,000+ employees.

The third most commonly cited reason (60%) for performance reviews is good communication between employees and managers, which was of particular interest due to the current COVID-19 pandemic. Keeping communication flowing is especially critical because so many are working remotely and do not see their managers face-to-face. The conclusions drawn are fairly obvious: when done properly, performance reviews can be an effective tool for employee and organizational development. A performance review can help pinpoint an area that an employee may be struggling with, then steps can be implemented to properly upskill in that area, which can help the employee perform better and, in turn, maximize organizational performance.

The research goes on to show that other more traditional goals of performance reviews remain in many organizations. For example, nearly half (45%) conduct employee reviews to meet organizational requirements, and almost as many want to facilitate performance-related changes in pay (42%). About one-third (35%) say they use performance reviews to force a conversation about poor performance. This may also be related to justifying dismissing low-performing employees (22%) and having a legal record of employee interactions (29%). A dismissed employee may retaliate if all their past performance reviews were positive, so having proper, honest, and well-documented interactions can be crucial. While not easy, dealing with poor performance can be critical for the sake of the individual, the team, and the entire organization.

The study suggests large organizations are slightly more focused on the organization-focused objective, whereas small- and mid-sized organizations are focused more on both organization and employee development. Respondents at large organizations cite helping improve their organization’s overall performance as the top choice for performance reviews (73%), and mid-sized organizations say helping individual employees learn and grow (69%) is their top choice. In small organizations, it is a tie between helping employees learn and grow (78%), and improving the organization’s overall performance (78%).

To track and document employee performance, technology solutions are a good tool to include in the process. LightWork Performance Management offers HR professionals a way to manage frequent and necessary performance review communications by facilitating meetings, reviews, and storing necessary documentation. To learn more about LightWork Performance Management, click here.