These 10 Statistics About Performance Management That Will Blow Your Mind
- 45% of HR leaders do not think annual performance reviews are an accurate appraisal for employee’s work.
- CFOs spend at least 40% of their time on business performance management, but they estimate that 30% of their company's performance potential is lost due to ineffective performance management processes and behaviors.
- Only 23% of HR executives think that their PM process accurately reflects employee contributions.
- Only 8% of companies report that their performance management process drives high levels of value, while 58% said it is not an effective use of time.
- A poll with 2,677 respondents revealed that 98% find annual performance reviews unnecessary. Among the respondents were 645 HR managers, 232 CEOs, and 1,800 other employees.
- Only 14% of organizations are happy with their performance management system.
- Two-thirds of performance management systems misidentify high performers.
- In 2013, most organizations needed a 20% improvement in employee performance, but typical performance management can only improve performance by 5%.
- 58% of organizations rated their performance management systems as “C Grade or below.”
- 30% of performance reviews end up in decreased employee performance.
Clearly, something is amiss when it comes to performance management and annual reviews. In fact, given the above statistics, it’s a relatively safe bet to say that performance management in your own company is lacking in some way or not delivering the kind of value you wish it could deliver.
The above facts were presented in an advertisement to promote their publication of the same name. I agree with the statistics that show that most Performance Management Systems are failing or not performing at the designed level. I believe that most of a company’s potential is lost due to ineffective performance management processes and behaviors. I believe that this concern is a direct result of the following:
· The lack of management and leadership training programs designed to help people reach potential and achieve results
· The lack of support from both Senior Management and the Human Resources Department
· The absence of a company culture that focuses on people development and high achievement
· The perception that the ROI associated with Leadership and Management Development is not significant.
Our region is made up of mainly small to mid-size businesses primarily focusing on providing income for the owners. Tourism, Gaming, Healthcare, Education, and public services are our primary industries that can support the growth and development of larger companies. We have little manufacturing and distribution companies in our region. We are basically a business environment that is seasonal in nature with little opportunity for growth and development.
Our talent pool is one of the weakest in the State and we still don’t get it. With the recent casino closings, much of our talent pool in that industry are seeking opportunities in other regions of the country. Graduates from our local colleges and universities are not staying in this region for jobs. Unemployment is high in all three counties: Atlantic, Cape, and Cumberland. Foreign owned companies are moving from the region and closing their local distribution or manufacturing plants as this article is being written.
Most businesses do not see the value in training their future or current management team yet most owners agree that their management team is the most valuable asset of their company. How contrary is that! Innovative Leadership of the Delaware Valley, LLC is the only company in Southern New Jersey that offers Leadership and Management Development Programs designed for the small to mid-size company. We provide programs that are facilitated by high achieving, experienced managers. We offer the programs at times that have a minimal effect on the work schedule of an employee or manager at a location ideally situated for the Cape May, Atlantic, and Cumberland county employer. Our references and outcomes are excellent, and most of our attendees have been promoted following the completion of the program. Last but not least, we are the only company to use a vehicle that will demonstrate the ROI of the program upfront…before the check is written.