Trends in Performance Management

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According to the 2012 ERC Performance Management Practices Survey virtually all organizations use individual performance evaluations of some kind regardless of industry or organizational size. Performance improvement plans, goal setting and individual development plans are also highly utilized by 90% of employers or greater.

The results of these evaluations are directly tied to employee compensation at 65% of these organizations. Just less than half of these organizations then link individual performance evaluation results to compensation by drawing formal connections between raises/bonuses and a certain rating level or performance evaluation score (48%). Interestingly, none of 2012’s participants report utilizing forced rankings- a slight departure from the 2010 survey results in which 10% of respondents indicated they used a forced ranking system.

Instead, respondents appear to be trending towards more flexible methods when connecting employee performance and compensation. This trend includes ties based on a broad interpretation of the employee’s overall performance review (29%) and even informal evaluations that fall outside of traditional performance management structures entirely (10%). Measuring progress towards goals and matrix/grid methods are the least common methods reported at 7% each.

The 2012 ERC Performance Management Practices Survey, published in July 2012, collected information from 83 Northeast Ohio organizations on performance management practices in the workplace, specifically related to performance reviews, performance criteria, role of the supervisor in managing performance, and other performance management issues.