Thinking about revamping your performance review process but aren’t sure if it’s the right time? It may seem safe and comfortable to stick with the familiar, but holding on to an outdated process may be hurting you more than you think. Here are some eye-opening stats:
1) Managers spend 210 hours a year on performance management
Insight and technology company CEB estimates that managers spend on average 210 hours on performance management. For employees, this number is set at 40 hours a year. According to their calculations, a company of 10,000 spends about $35 million a year on performance reviews alone!
2) Only 6% of organizations believe their performance review process is worth it
What do Accenture, Adobe, Deloitte, GE, the GAP and Microsoft have in common? Realizing they weren’t getting enough out of their processes, they’ve all said goodbye to traditional performance reviews and instead replaced them with more frequent check-ins and real-time feedback. Is it time to reevaluate your processes?
3) 58% of organizations manually use spreadsheets as their primary way to track performance
The amount of manual work this approach requires from HR teams, managers and individuals is a sure fire way to develop company-wide carpal tunnel. It’s important to implement a solution and strategy that streamlines your process and delivers the insights you need in a simple and automated way.
4) 22% of employees have called in sick rather than face a performance review
Has your office felt a bit deserted lately? In a survey of over 1,000 millennial employees by Trinet and Wakefield, 22% preferred to call in sick. Another 35% have complained to their peers, 15% have cursed and 15% have cried. Rather than putting people on trial, performance reviews are supposed to be an opportunity to help people reflect, learn from their past performance and make an action plan for the oncoming year.
5) 74% of millennials feel “in the dark” about their performance
One of the biggest problems with annual performance reviews is that the results often come as a surprise to employees. In Trinet and Wakefield’s survey, 74% of millennials reported feeling “in the dark” about their performance.
Instead, sharing continuous performance feedback gives people the insights they need to improve their performance throughout the year, ensuring they’re not blindsided by their next performance review.
6) 47% of millennials started looking for another job after receiving their results
Growth and development is one of the most important things millennials look for in a job. If your people don’t feel they can learn and grow in your organization, they’ll start looking for opportunities elsewhere. As Adobe’s recent study of over 1500 office workers revealed, 47% already have.
7) 57% of employees feel performance reviews breed competition
How are reviews impacting team spirit? Trinet and Wakefield found 57% of people feel performance reviews put them in competition with their peers. What’s more, 61% believe their manager plays favorites. Although it has largely become discredited by major companies, roughly 14% still use ‘stack ranking’ to rank employees against each other. Rather than helping to identify top and low performers, this system breeds competition and toxic work environments.
8) 9 in 10 HR leaders don’t even believe the results are accurate
Are the blood, sweat and tears worth it…? According to CEB’s study, 9 in 10 HR leaders don’t think so. In fact, research shows two-thirds of performance management systems misidentify top performers. Business consultant Marcus Buckingham believes this can be attributed to the what psychologists term the idiosyncratic rater effect.
On average, 61% of a rating is based more on the rater than the ratee. When reviews only come from managers, this effect can greatly increase the possibility of bias in performance reviews. Instead, bringing more perspectives into the equation with 360-degree feedback allows for a more balanced view of a person’s performance.
9) 95% of managers are dissatisfied with performance reviews
Based on its survey, CEB reported that a shocking 95% of managers are dissatisfied with performance reviews. 59% of employees feel they have no impact on how they do their job, with another 58% agreeing that it’s merely an HR requirement. Deloitte’s 2014 Human Capital Trends report revealed that 58% of HR executives, the drivers behind the performance review process, actually consider them to be an ineffective use of time.
10) 70% of multinational companies are already overhauling their performance management models
Still aren’t sure whether it’s the right time to act? Today, agility is everything. To survive, companies need to be able to innovate, adapt and reorient at a fast pace. This requires an agile workforce that is constantly ready to learn and improve new skills. Influencer Josh Bersin estimates that 70% of multinational companies are now in the process of moving towards a more effective model of performance management.
Performance reviews don’t have to be scary
Deloitte’s 2017 Human Capital Trends Report found 90% of companies that have redesigned performance management see direct improvements in engagement, 96% report processes are simpler, and 83% say they see an improvement in the quality of conversations between employees and managers. It’s not too late to start the change. Reach out to learn more about how Impraise can help you painlessly introduce a new performance management system customized to your company’s needs.
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