Feedback from 750 senior-level HR professionals on the state of performance-evaluation programs reveals that employers can do a better job of aligning the process to business objectives, finds a study by WorldatWork and Sibson Consulting.

For example, 47% of respondents say their organization struggles to reclassify performance management as a business-critical process, instead of an HR-process.

Positioning performance management as a business driver is critical for success, given that "businesses are so focused on improving results, driving performance management through leadership support, goal alignment and communication," says David Insler, senior vice president of Sibson Consulting.

Also, the study finds that 63% of participants admit that managers lack the backbone to have frank conversations with their underlings during performance evaluations.

Kerry Chou, compensation practice leader for WorldatWork, says that "organizations that get the most impact from performance management are those that use it as a blueprint for success to drive business results forward instead of a rear-view mirror look at what could have been."

Other key findings of the 2010 study include:

  • The top three goals of performance management are differentiating distribution of rewards based on individual performance (66%); establishing greater individual accountability (54%); and supporting talent development (46%).
  • Evaluations from performance management are much more likely to be linked to merit increases than to either short- or long-term incentives.
  • Senior management in higher performing organizations are more likely to support the performance management process than in lower performing organizations.

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