It’s not surprising that employers, managers and employees all say performance management is broken. The prevailing approach — with its single year-end rating and a reliance on past results — is hardly a formula for ensuring effective performance management and keeping up with evolving business demands.

Yet, despite headline grabbing accounts of companies going ratingless, only a small number of organizations have actually abandoned performance management programs or eliminated ratings altogether.

 Performance Management Isn’t Working: Programs Not Keeping Up With Evolving Business Needs

Some forward-looking organizations have already taken incremental measures to improve programs. For example, roughly a third (31%) have already changed or plan to change the focus of performance management to include future potential, and 29% have changed or plan to change programs to include possession of skills needed to power the business in the future.

So what will it take to fully transform and deliver effective performance management strategies and programs?

 Performance Management Isn’t Working: Programs Not Keeping Up With Evolving Business Needs

Organizations can enhance the experience for managers and employees by strengthening the following core “enablers” of performance.

  • Manager effectiveness: Give managers the education, support and tools they need to be effective at performance management. Encourage continuous dialogue between managers and employees throughout the year.
  • Process: Start by defining what “performance” means for your employee groups and make evidence-based changes to programs versus changing just for the sake of change.
  • Communication and transparency: Involve people in changes to performance management. Collect their feedback, act on it and make them accountable for doing something with it.
  • Meaningful measurement: Measure a combination of sustained performance, potential and criticality of skills to future business performance. Don’t measure solely for the sake of compliance.
  • Technology: Use technology better. Make sure it enables other HR processes and helps ensure an effective user experience.

Download the complete report for additional detail and insights.

About the Survey

The 2015 Talent Management and Rewards Pulse Survey #2 includes insights from over 1,000 participating organizations across 40 countries. It fielded September through November 2015.