New Study Reveals Progress and Challenges in Performance Management

A recent study by HR.com's HR Research Institute (HRRI) has shed light on the current state of performance management (PM) in organizations, revealing both progress and persistent challenges. The research, titled 'HR.com's Future of Performance Management 2024-25', provides a comprehensive analysis of PM practices, trends, and strategies for improvement.

According to the study, only 45% of organizations report that their PM processes effectively meet critical outcomes to a high or very high degree. These outcomes include meeting organizational PM goals, improving employee performance, enhancing employee development, and providing better legal protection. This statistic underscores the significant room for improvement in PM practices across industries.

Despite these challenges, the research indicates positive trends in key performance leadership areas over the past two years. Organizations have reported increased efforts in conducting more frequent one-on-one meetings with managers (41%), allowing greater employee input into performance goals (36%), and aligning employee goals with business objectives (36%).

The study also identifies characteristics of organizations that excel in performance management. These high-performing entities are over twice as likely to have leaders who view PM as crucial for improving performance, almost twice as likely to use digital technology for PM to a high or very high degree, and over 1.5 times more likely to provide training to managers for PM.

Digital technology adoption in PM is widespread, with 84% of organizations using these tools. However, only 42% apply them to a high or very high degree, suggesting a gap in effectively leveraging these technologies for optimal results.

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

The research report, available for free download at HR.com's Future of Performance Management 2024-25, offers detailed insights and actionable recommendations for HR professionals aiming to build more efficient and effective PM initiatives. Additionally, a recorded webcast presentation titled The Evolution from Performance Management to Performance Leadership is available for on-demand viewing, providing further context and analysis of the study's findings.

As organizations continue to navigate the evolving landscape of performance management, this research serves as a valuable resource for HR professionals and business leaders. By highlighting both the progress made and the challenges that remain, the study offers a roadmap for improving PM practices and leveraging technology to drive organizational success and employee development.