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4 Signs Your Company Needs to Update Performance Management


Talent is one of the most important assets organizations have, and yet most performance management systems are ineffective at developing and motivating employees. One study found that only 3% of organizations think their performance management is top-notch, and 48% admit that their performance management needs some work. Another study found that only 14% of businesses are happy with their current performance management systems.

If you are reading this and thinking “our performance management system is perfect – we just implemented continuous feedback!”, we would encourage you to continue reading. In this article, we outline 4 major signs that may indicate that performance management may need a revamp in your organization.

1) High employee turnover

SHRM reported that on average, every year, a company will experience 18% turnover in its workforce. Losing close to 1/5th of your workforce is incredibly inefficient and costly to an organization. Remember that there are many reasons for employees to quit the job; it is important to analyze which department(s) and team(s) are experiencing the most turnover in order to create the best initiatives to increase retention.

One interesting study found that many employees have quit or have considered quitting because of a bad boss. Having robust performance management solution can help identify managers that may need more training. There are various studies that have also found that importance of employee feedback and recognition – having a system that can document and analyze all this feedback data in one place can also help identify employees that are at high risk for attrition.

2) Low employee engagement

Employee engagement affects employee productivity and retention. As mentioned previuosly, two-cost effective ways that organizations can take to increase employee engagement is continuous feedback and recognition.

Employees want feedback; in fact, they need it. 43% of highly engaged employees receive feedback at least once a week, as opposed to 18% of low-engaged employees. However, 32% of employees say they have to wait more than three months to receive feedback from their managers. Moreover, 4 out of 10 workers are actively disengaged when they get little to no feedback. Employee recognition is also important; a study by OfficeVibe found that 69% of employees say they would work harder if they felt their efforts were better recognized, 78% of employees said being recognized motivates them in their jobs, and 72% of employees get praise less than once a week.

If you find that there is low employee engagement at your organization, it may be time to implementing a performance management solution that can help foster a culture of feedback and recognition. Many softwares also track the number of feedback and recognition employees receive, so HR leaders and managers can easily identify team members that may be lacking feedback.

3) Missed goals and targets

Performance management systems are critical for organizations, as they help align goals throughout the organization. When there is misalignment, it is a lose-lose situation: employees do not get rewarded for their goals and organizations loose productivity and end up missing targets. If you find that your organization is missing targets, it may be time to revamp your performance management solution.

4) Too much time spent on performance reviews

On average, managers spend up to 210 hours on performance reviews! There are several ways that HR leaders can revamp their performance review process to help streamline time-consuming performance reviews, including:

  1. Having one spot to document continuous feedback conversations (remember that performance reviews should just be an aggregation of feedback an employee has had throughout the year)
  2. Having a performance management solution that stores review templates and nudges managers to complete pending reviews.


The workplace is constantly evolving; performance management processes should too. Talent is one of the most important assets organizations have, and while executives and HR departments debate about whose budget should pay for performance management systems, their employees have already started looking for new jobs and their top peers are moving ahead. It is time to act!

If you are looking to revamp your performance management solution, contact us to learn more or to schedule a demo.

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