Where Has Performance Management Gone?

Posted by  Paul Glatzhofer


The way companies conceptualize and execute performance management has been slowly dying for the last 8-10 years. If you haven't already heard about this, you will soon. Fortune 500 organizations have become more sophisticated with regard to the data they have and analyzing its impact. Most of those same organizations have specifically analyzed their performance management and 360 data only to find no relationship with increased performance or employee engagement. This was a shocking finding, and I would imagine most of these same organizations weren't all that interested in widely publicizing the fact that their internal procedures had little to no impact on their bottom line. However, once larger organizations, such as Deloitte, publicized their findings, then it was easier for more organizations to join the conversation.

How Performance Management is Viewed

Here are some interesting findings related to how companies and their executives view performance management:

  • 58% of executives believe their current performance management approach neither drives engagement, nor performance.

  • 60% of companies are rethinking the way they approach performance reviews.

  • 90% of companies reported using annual or semi-annual performance reviews, but only 30% believe they do them well.

All of this leads us to the fact that we are currently in the midst of The Performance Management Gap. Some companies have already done a lot of research and work putting in place a new "system." They are being more conservative in their approach. And still others are sticking with the annual review because it is embedded in their culture, and will take too much effort to change, until they see what will work (once these other companies test the waters).

Although we know we have been in the midst of The Gap for the last few years, only now are we seeing a few unique strategies come to the forefront on how to address the issue. At its core, though, what companies are doing is asking their leaders to be leaders.  Three of the reasons we force once-a-year annual performance reviews are

  1. for administrative reasons

  2. to determine and communicate salary increases, and

  3. because that is the only time during the year when managers and leaders are foced to have real conversations about performance with their people

One big part of the eventual solution will be going back to the basics. The basics will include giving more feedback more often, giving development opportunities to employees, and asking managers and leaders to act as coaches. What goes unsaid, though, is the reason why organizations and leaders struggle to do this.

To learn more, check out the whitepaper "Where Has Performance Management Gone?"

leadership management

Tags:   employee performance

Paul Glatzhofer

Paul is Select International’s Director of Leadership Solutions. He works primarily with organizations that are implementing global assessment systems focusing on leadership levels. Paul’s work includes project management, project implementation, job analysis, assessment validation, competency and skills validation, selection system design, applicant tracking, EEOC & OFCCP reporting, turnover and ROI analysis.

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