In an era when connecting with and engaging employees is paramount to make work meaningful and maximize performance, a newly launched State of Performance Enablement global HR research report from Betterworks, the leading intelligent performance management software company, exposes significant disconnects between how organizational leaders and their employees and managers view their ability to perform optimally.
Employees and managers lack adequate guidance to perform at their best, report feeling less enabled than leadership, and often don’t have access to the right tools. Employees self-report lower productivity when they lack the ability to align their goals with their organization’s goals flexibly. They also report lower satisfaction with skill building and career development when they don’t have access to frequent manager conversations and feedback, and do not have tools specifically designed for performance management.
The report, which leans into Betterworks’ 2024 survey findings gleaned from over 2,000 employees and organizational leaders in the U.S. and U.K., uncovers notable discrepancies in how the effectiveness of performance management processes is perceived, emphasizing the urgent need for organizations to reassess and enhance these processes to bridge existing gaps that impede long-term success.
Key insights for organizational leaders include:
Mind the perception gap between organizational leadership and employees
While 90% of leaders (including HR) consider their performance management processes successful, only 55% of employees share this sentiment. This disparity can detrimentally impact employee empowerment, productivity levels, and perceived support for skills development.
Resolving this gap can lead to heightened retention and productivity: Employees are ten times more likely to envision internal advancement opportunities when they rate their performance management processes as successful. Seven out of 10 employees report feeling highly productive when performance management is deemed successful, in contrast to five out of 10 when it is perceived as a failure.
“AI, demographic shifts, and evolving customer expectations continually redefine our landscape,” said Doug Dennerline, Betterworks’ CEO. “This year’s report underscores that HR leaders leveraging intelligent performance management processes and purpose-built platforms are best positioned to reshape their organizations, not merely to survive, but to thrive amidst these relentless forces and shifting perspectives. This journey is about establishing efficiency and productivity as our foundation.”
One-on-one conversations are critical – but not universally implemented
A pivotal takeaway from the report underscores the significance of regular one-on-one manager-employee conversations and peer feedback on employee performance. Employees who receive these consistently are at least three times more likely to feel supported in their work, skills, and career development.
However, 20% of employees lack access to one-on-one conversations with their managers, while 40% do not receive peer feedback.
Middle managers require enhanced support from leadership
Middle managers help employees execute leadership’s vision and strategic direction, and dismantle barriers to employees’ effectiveness and productivity.
Yet, two-thirds of managers express a need for greater clarity regarding their roles, increased support in delivering performance management, and assistance in guiding employees’ skills and career development.
The right tools can close the performance gap
Whether for goal management, manager-employee conversations, feedback, ratings, reviews, or career and skills development, employees rate their human capital management (HCM) systems as minimally better than manual processes and sometimes even worse.
By contrast, those with access to purpose-built performance management solutions integrated with an HCM system are 70% more likely to rate it as successful for performance management and at least twice as likely to receive the necessary support for skill-building and internal advancement.
Skills-based performance management can overcome the skills squeeze
While the vast majority of employees (86%) want career and skills development, along with coaching to support both, just over half (54%) see these processes as successful. Organizations can overcome this disconnect by empowering and supporting managers to coach on skills and employees to build skill development into their performance plans. Employees are three times more likely to feel they receive adequate support for skill-building when their organization uses a combination of an HCM and performance management software than with an HCM alone.
“Skills-powered HR technology has been gaining traction in recent years, facilitating employees to build their skill profiles and identify skill gaps,” said Arnaud Grunwald, Chief Product Officer at Betterworks. “However, it’s time to elevate this approach by defining and executing skill development plans. Companies and their managers must engage in frequent conversations with employees about skill development, providing them with the support system — coaching and feedback — to ensure skill acquisition.”
“Goal-getters” are the high flyers of performance
When individual goals align with company goals, productivity soars – aligned employees are 35% more efficient and productive. Employees using purpose-built performance management platforms are over twice as likely to perceive their goals as relevant to organizational objectives.
For more information and to access the full Betterworks 2024 State of Performance Enablement report, visit report.betterworks.com.
Survey methodology
The 2024 Performance Enablement survey, conducted from November 27, 2023, to January 10, 2024, reflects 2,105 respondents across 20 industries in companies throughout the U.S. and U.K. with 1,000 or more employees. Participants represented a range of employees and organizational leaders: 45% individual contributors, 35% managers (non-HR), 15% director level or above, and 5% HR manager or above.
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