Performance Management Shows Progress, But Execution Gaps Remain - New Study by HR Research Institute

The latest HR study reveals that a mere 45% of organizations report that their performance management (PM) processes effectively meet critical outcomes to a high or very high degree, including:

• meeting organizational PM goals

• improving employee performance

• enhancing employee development

• providing better legal protection

HR.com’s HR Research Institute (HRRI) has unveiled a new research report exploring the current state of PM practices, highlighting key trends and strategies for improving performance management efforts today and in the future. The research underscores the challenges many organizations face in achieving effective PM plans while also spotlighting areas where positive strides are being made.

These findings indicate that there is still much room for improvement in performance management processes across the board. However, the future of PM looks promising as organizations have shown increased efforts in key performance leadership areas over the past two years, such as:

• more frequent one-on-one meetings with managers: 41%

• greater employee input into performance goals: 36%

• managers aligning employee goals with business objectives: 36%

In fact, investigating what’s working and what isn’t, the organizations that are better at performance management are:

• over 2X more likely to have leaders who view PM as crucial for improving performance

• almost 2X more likely to use digital technology for PM to a high/very high degree

• over 1.5X more likely to provide training to managers for PM

Further analysis highlights the widespread adoption of digital technologies in performance management, with 84% of organizations using these tools, yet only 42% apply them to a high or very high degree. This gap suggests that while technology is being integrated into performance management processes, many organizations still struggle to leverage these tools effectively.

“Continuing these positive advancements, especially with performance leadership efforts, will be the key for the future of performance management success,” stated Debbie McGrath, Chief Instigator and CEO of HR.com. “Also applying the right automation is essential for meeting organizational goals, enhancing employee performance, and fostering better employee development.”

The full research report, HR.com’s Future of Performance Management 2024-25, is available for free download and offers detailed insights and actionable recommendations for HR professionals looking to build more efficient and effective PM initiatives.

The recording of the research webcast presentation, The Evolution from Performance Management to Performance Leadership, is available for viewing 24/7 on demand.

About HR.com and the HR Research Institute

The HR Research Institute (HRRI) helps you keep your finger on the pulse of HR! Powered by HR.com, the world’s largest HR community, the HRRI identifies key trends and best practices to help more than 2 million HR professionals and their organizations make strategic decisions with informed and insightful research findings. Among the most productive and respected HR research institutes globally, the HRRI publishes dozens of high-quality reports every year across a wide array of HR topics. HR.com’s free membership offers many benefits, including access to over 250 exclusive primary research, state-of-the-industry reports, and infographics. These resources are published based on surveys developed with the assistance of a panel of thought leaders and industry experts on the advisory boards. Visit hr.com/hrresearchinstitute to maximize your HR potential.

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