Further, modern performance management isn’t viewed as a stand-alone process. Best-practice companies treat performance management as the foundation of their talent management strategies, from compensation to on-boarding to succession management. With an integrated approach, companies have better information on their talent pipelines at all levels of their organizations. Twenty-eight percent of respondents said they are identifying high-potential employees for succession planning.
• Technology can bring positive business value. Eighty-five percent of companies that implement performance management systems see positive business impact. When companies implement integrated talent solutions, they see two to three times the ROI compared to companies that implement point solutions. This market likely will grow rapidly and have the largest segment of the HR technology market.
Selecting the right technology solution can be daunting given the number of providers and the similarity of offerings available. However, factors such as the user experience for employees and managers, global capability, domain expertise, integration points and delivery options are differentiators.
• Managers and supervisors remain weak links. Forty-five percent of respondents said their managers are incapable of differentiating high and low performers; 38 percent of managers feel they do not have the training or support to adequately conduct performance management tasks.
Managers are the frontline for all employee practices. They drive the success or failure of any talent management strategy. As employee performance management practices evolve to integrate more fully with career and talent planning, HR must rely on managers to support even more sophisticated practices. Organizations must spend more time coaching and developing managers to be confident and effective in their roles.
• Customize processes to meet needs of workforce segments, geographies and operational units. While enterprise-wide standardization of certain processes drives high efficiencies, organizations must account for the unique needs of all workforce segments. Employee performance processes must be designed to address operational, cultural and legal considerations.