Here are 10 statistics on performance management that may shock you:
- 45% of HR leaders do not think annual performance reviews are an accurate appraisal for employee’s work.
- CFOs spend at least 40% of their time on business performance management, but they estimate that 30% of their company’s performance potential is lost due to ineffective performance management processes and behaviors.
- Only 23% of HR executives think that their PM process accurately reflects employee contributions.
- Only 8% of companies report that their performance management process drives high levels of value, while 58% said it is not an effective use of time.
- A poll with 2,677 respondents revealed that 98% find annual performance reviews unnecessary. Among the respondents were 645 HR managers, 232 CEOs, and 1,800 other employees.
- Only 14% of organizations are happy with their performance management system.
- Two-thirds of performance management systems misidentify high performers.
- In 2013, most organizations needed a 20% improvement in employee performance, but typical performance management can only improve performance by 5%.
- 58% of organizations rated their performance management systems as “C Grade or below.”
- 30% of performance reviews end up in decreased employee performance.
See a quick video below.
Clearly, something is wrong when it comes to performance management and annual reviews. In fact, given the above statistics, it’s safe to say that performance management in your own company is lacking or not delivering the value you expect.
Download the book: Transforming Your Performance Management System: 6 Companies That Are Leading the Way. Learn how you can diagnose and fix your performance management and performance appraisal problems.