The Big
Disconnect
The Illusion of Meeting Expectations
Productivity is top of mind in 2024. In the race for results, leaders have been tempted to shift focus from guiding performance to tracking output. But if you think current performance management practices are ‘good enough’ to meet the bar, you could be wearing rose-colored glasses.
Many executives are. Our latest research shows a shocking perception gap between the experience of performance management for leaders and HR versus everybody else.
The right support tools and processes are also key. Disconnects in access to manager-employee conversations, feedback, development, and goal management track with a tumble in outcomes like productivity, belonging, and alignment — which all directly impact performance.
So is the current system “good enough” to drive gritty 2024 productivity goals? All signs say no.
If companies want to see performance boom, they can’t sleep on managing it. Instead, they must identify and bridge these gaps — and double down on meaningful performance support.
Top Findings From the Report
Mind the Gap
Performance Management is Not as Good as You Think It Is
Game Changers for Business
Conversations and Feedback
Middle Management Crisis
The Squeeze is Real
“Good Enough” Isn’t
What You Leave on the Table With an HCM-Only Approach
Meet the Moment
Deliver Impact Through Skills-Based Performance Management
Goal-Getters
The High Flyers of Performance
Mind the Gap
Performance Management is Not as Good as You Think It Is
Execs and HR give performance management an A+ but 4 in 10 employees say it’s a big fail.
There’s a dangerous disconnect in performance management. Leaders and HR see performance management through a rosy lens. For them, manager conversations, peer feedback, reviews, goals management, and career/skills development are overwhelmingly working.
For employees and their managers — not so much.
This gap has a real impact on outcomes. Individual contributors are 17% less likely to say they are very productive, 37% less performance-enabled, and 3x less likely to feel supported in their skills development. Managers also rate these factors lower than leaders — especially when it comes to productivity, where they dip even lower than individual contributors.
Find out in the full report.
Compared to HR and leaders, individual contributors are:
A Failing Grade for Performance Management
0%
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GAME CHANGERS FOR BUSINESS
Conversations and Feedback
Up to 2 in 5 employees are not getting conversations or feedback, and it is crushing their growth.
Manager conversations and peer feedback are game-changers for retention and productivity — but more than 1 in 5 employees are still not getting either. This has a manifest impact on outcomes, at a time when top talent is in demand and skill gaps are a big concern.
Fissures between the “haves” and “have nots” directly map to shortfalls in how supported employees feel in their performance, their ability to build their skills, and whether they see a path for growth in their organization.
Find out in the full report.
Haves vs. Have nots
Haves
Have nots
Middle Management Crisis
The Squeeze is Real
People managers lack the clarity and support they need to deliver results.
Middle managers serve as the bridge between leadership's vision and strategic direction, and the execution of these by employees. They support teams relationally and help employees remain on track and engaged. Yet, underinvestment in managers coupled with high expectations from all sides threatens to undermine the foundational support they provide.
Our data shows them squeezed from all sides — struggling to stay effective and productive. There is a troubling disconnect between the level of assistance people managers say they receive and the level of support that higher-level managers, HR, and leaders feel. Only about 1 in 3 middle managers said they have the clarity, organizational support, and resources to succeed and to coach employees effectively on skills and career development.
Find out in the full report.
“Good enough” Isn’t
What You Leave on the Table With an HCM-Only Approach
HCMs perform 70% better with an assist from purpose-built performance management software.
When it comes to managing performance, the data shows that HCMs perform no better than manual spreadsheets — and in a few cases, they are worse. Yet, two-thirds of respondents use an HCM or ERP system precisely for performance-related activities.
Clearly, a majority of employees and organizations are missing out on the multiplier effect of modern performance management by relying solely on large, one-size-fits-all systems. Combining an HCM with a purpose-built, best-of-breed platform for performance management boosts outcomes across the board for engagement, belonging, enablement, goals relevance, career development, and opportunities for advancement.
Find out in the full report.
HCMs are 70% more effective with an assist from purpose-built performance management software.*
HCM Alone
HCM + Dedicated Software
Meet the Moment
Deliver Impact Through Skills-Based Performance Management
Companies are failing 1 out of 2 employees in developing skills and careers.
Organizations are hyper-focused on building skills to make the best use of their talent while fortifying their ability to address constantly changing conditions. And employees desire similar security and promise. Employees at all levels told us they want skill and career development — but only 54% rate these programs as a success.
The addition of purpose-built solutions yields dividends. Employees with software specifically designed for performance management were nearly 3x more likely to feel they always receive the support they needed to develop their skills and nearly 2x more likely to say they see a clear pathway for advancement in their company than those relying on only an HCM for skill development.
Find out in the full report.
Employees see a clear pathway for advancement in their company.
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Goal-Getters
The High Flyers of Performance
Productivity and feelings of belonging soar when employees feel aligned to company goals.
Organizational impact goes hand in hand with goal alignment. Employees say they are more productive when they are able to set and accomplish goals in sync with their company’s goals. And they are 3.6x more likely to feel those goals align when they have frequent manager conversations, coaching, and feedback.
Here, again, purposeful technology matters. The combination of an HCM plus a purpose-built solution was a winner for 92% of respondents. And sometimes, the wrong technology can be worse than having none at all — HCMs without the addition of a purpose-built solution produced even less alignment than manual solutions.
Find out in the full report.
Employees feel their goals are always relevant to and help their organization to achieve its overall goals.
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Crossing the Great Divide
The 2024 State of Performance Management report exposes striking disconnects in experience — whether based on organizational role or access to effective tools and thoughtful performance management processes.
The impact these factors have on outcomes that matter most to organizations makes clear the vital need to bridge the experience gap — a need that will only become more crucial as enterprises race to meet the demands of the marketplace and the needs of their workforce.
Download your copy of the full report.
Discover Betterworks
Founded in 2013, Betterworks is the pioneer in intelligent performance management solutions that help workforces and organizations achieve their highest potential. Betterworks reimagines performance management for all with an enterprise-ready platform that fosters greater manager effectiveness and employee performance, leading to higher satisfaction and retention and better business outcomes.
Our customers’ employees are proven more engaged and satisfied in their roles, which is why industry leaders like Colgate-Palmolive, Intuit, Udemy, Freddie Mac, Vertiv, and the University of Phoenix rely on Betterworks to manage and enable excellent performance. Betterworks is backed by Kleiner Perkins, Emergence Capital, and John Doerr.
For more information, please visit www.betterworks.com.
A few words on terminology
We use the terms HCM, ERP, and purpose-built performance management solutions in this report. Here are their definitions:
HCM (human capital management) – An integrated suite of technologies that help companies manage all aspects of the employee life cycle overseen by HR, including recruiting, training, payroll, compensation, and performance management.
ERP (enterprise resource planning) — Software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management, and supply chain operations.
Purpose-built performance management — Software that is specifically designed for performance management, enabling lightweight and continuous performance enablement in the flow of work through agile goal-setting, manager-employee conversations, peer feedback and recognition, and employee surveys.
Download your copy of the full report.
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2024 Global HR Research Report
The State of Performance Enablement