Companies with a performance-driven work environment realize a competitive advantage over their peers, says AberdeenGroup, a leading research firm serving major corporate technology end-users around the world.
The report, "Employee Performance Management: The Aligned, Performance Driven Workforce," found that companies that are performance-driven report higher productivity and higher employee performance levels, as well as better employees' attitudes toward their work and their satisfaction with their employing companies in general.
"Businesses today need to move away from the yearly report card mentality," said Dr. Katherine Jones, Aberdeen's research director of enterprise applications and author of the report. "This will help them better clarify expectations, align goals and objectives, and articulate evaluation measures to optimize the performance management business process over the life of the employee. They can then begin to move beyond pay-for-performance to performance-for-profit."
Ninety percent of the companies responding to Aberdeen's surveys perceive improved management of their workforce as key to gaining competitive advantage. The majority reported that their managers use corporate goals to create the objectives for individual employees. Yet, despite lip service to maintaining a performance-driven and pay-for-performance environment, 52% are locked into a cycle of paper-based evaluations that are conducted once a year and rarely reviewed again.
"Businesses indicated their greatest challenges are in aligning individual behavior with corporate goals or scorecards, and in the ability to improve the employees' skill levels," continued Jones. Furthermore, 80% of respondents identified a key issue in their inability to link an employee's performance to the payout, as they move to a pay-for-performance culture.
Designed for business executives, this study surveyed respondents on the role of employee evaluation in the overall attempt to improve employee performance and productivity on the job. The ensuing report, which provides actionable steps to optimize management of a company's human capital, is one is a series of Aberdeen reports focusing on workforce management.
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About Aberdeen Group
Founded in 1988, AberdeenGroup Inc is the trusted advisor to the global business executive for value chain strategies and business advice.