Performance management has come to mean many things to many people. Some take it to be the day-to-day interactions managers have with their employees, while others feel it's strictly the domain of human resources professionals. Regardless of who��is in charge, performance management touches many areas of��business.
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Performance reviews��are one��significant piece of performance management. Engagement, or the level at which your employees are invested in their jobs, also aligns closely with performance management. Finally, a highly engaged workforce that receives solid feedback and is performing at top productivity impacts an organization's employer brand.
Performance management, once the overlooked purview of consultants, is actually a crucial piece of a total HR strategy. If you're going to get this critical component of your business right, then you may want to start by brushing up on a few stats about the state of performance management today, sourced from Deloitte's "Global Human Capital Trends 2014" report:
1. 86 percent of business and HR leaders believe they do not have an adequate leadership pipeline.
Does this surprise you? It shouldn't. Look around your office. Is someone you see ready to take your position tomorrow, if need be? If the answer is "No," then you have an urgent problem on your hands ��� along with the 38 percent of business and HR leaders.
2. 79 percent of business and HR leaders believe they have a significant retention and engagement problem.��
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Shockingly, nearly 8 out of 10 HR and business leaders are worried about engaging and retaining their employees!
3. 77 percent of business and HR leaders do not feel they have the right HR skills to address the issue.
Even if they're surrounded by��HR professionals, most business leaders worry they don't have the right HR skills to adequately handle all the workforce issues they're facing.
4. 75 percent of business leaders and��HR pros are struggling to attract and recruit the top people they need.��
That means 3 out of 4 companies feel they are missing out on top talent.
5. 17 percent of HR and business leaders feel they have a compelling and engaging employment brand.
In��contrast, 56 percent of professionals rank employer branding as the most important factor when looking for jobs.
6. 6 percent of business and HR leaders think their current process for managing performance is worth it.
While many believe��that managing performance is itself a worthwhile, it seems that most of the systems and processes used to do so are laborious, frustrating, and "not worth the time," according to Deloitte's report.
There are��companies that manage employee performance using formal review processes, and the fact is, when implemented properly, these systems work: High-quality formal reviews increase employee performance by 25 percent and employment engagement by 35 percent, according to HR tech company Paycor. It seems the frequency of reviews may also play a role in their effectiveness: Paycor also says that 43 percent of highly engaged employees receive feedback at least weekly.
The saddest part of the above stats is��that while everyone seems to agree on how dire the situation is, few people ��� if any ��� are investing in or focusing on the things��we need to do to fix the problem.
That being said, these stats can help point a way forward: More frequent reviews and feedback may lead directly to more engaged employees. Perhaps its time for your organization to give it a shot.
A version of this article originally appeared on the Reviewsnap blog.
Chris Arringdale is the cofounder and president of��Reviewsnap.