The State of Performance Management

Some facts from the recent report, The Current State of Performance Management and Career Development

Performance weighting is tipped toward results, particularly for executives

When weighting the two sets of performance components-what is accomplished as well as how it gets done- it appears that most organizations tip the scale towards results, particularly for executives.

  • 62% of respondents indicate that executives are either measured solely on results (30%) or more on results than competencies/behaviors (32%).
  • Only 4% of respondents indicated that executives are measured either solely on competencies/behaviors (1%) or more on competencies/behaviors (3%).
  • At the individual contributor level only 10% of companies measure only or mostly competencies/behaviors.
  • Also at this level, the most popular approach is 50/50, with 48% indicating they use this relative weighting.

The ratingless system

The ratingless performance system does not appear to have caught on. In the performance systems of 93% of responding employers, employees do receive an overall rating – either number, letter, or label.

The five-point scale remains the top choice

The five point performance rating scale has become even more popular in recent years.

  • · 63% of respondents report using a five point scale (compared to 45% in the 2005 study).
  • · 19% report using the four point scales.

Calibration meetings

Calibration meetings are increasingly common as a way to ensure consistency in ratings.

  • · 61% of responding employers conduct some form of calibration meeting – either to provide guidance to managers; or to compare, discuss, and reach consensus on employee performance ratings.

Merit increases

While merit increase ranks at the top, other reward links appear to be gaining attention:

  • · 63% of participating companies indicate that the performance rating drives the merit increase.
  • · 45% say it drives variable (incentive) pay.
  • · 28% report that it drives prospects for advancement.
  • · 20% indicate that it drives an employee’s access to new experiences and challenges.

Source: Compensation Force, http://snipurl.com/zxfof

Download the full report- The Current State of Performance Management and Career Development 2010;

http://snipurl.com/zxfnj

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