This post on performance management stats was updated in October 2020.
Chances are you want to improve your performance management strategy. Some employees succeed with flying colors while others never quite get enough velocity for lift off and in between the rest of your duties, you need to make sure you’re communicating with them correctly. You probably have employees who meet their deadlines, give decent work and pretty much fly under the radar and these people also need development, coaching, and recognition. Sound familiar? What’s a busy HR pro or manager to DO?
While talent management is incredibly important, it doesn’t often get as much of the spotlight (or budget) as talent acquisition, its sexier brother. But, if you’re looking to improve your performance management strategy, increase engagement, build a solid succession plan or build on past successes, you’ll need some backup.
For that, you need talent management statistics. Use these to get started as you build your talent management plan:
Statistics on How Talent Management Affects Employees:
- Only 32.5% of U.S. employees are engaged in their work. That means roughly 68% or just over 6 out of every 10 employees are floundering. If you’re asking for a budget, what other initiative will help that large a percentage of your workforce?
- 25% of employees leave organizations due to a lack of recognition. Lack of recognition takes one thing to remedy: attention. If you receive no other go-ahead than to put a great recognition or goals solution in place, you will have affected 1 out of every 4 employees. Those are some pretty great odds.
- 72% of respondents felt that their performance would improve with corrective feedback. And who is going to give it to them? YOU ARE!
- Only about 50% of the workforce strongly feels as though they understand work expectations. Stop fearing the feedback. Your employees want it, they know they NEED it, so start confronting and coaching and see every other employee thrive.
- 89% of employees in North America think it’s important their employer support their learning and development. And it’s never been less expensive to do so. Online courses, inexpensive conferences, vendor offerings, and more can help support those within your enterprise. And only 11% of your employees wouldn’t welcome some learning and development.
- NEW: According to a 2019 study from Gallup, only about 10% of U.S. workers felt engaged after receiving negative feedback on the job.
- NEW: Nearly 30% were so put off by a negative review that they actively looked for a new job.
Statistics on How Talent Management Affects Organizations and Managers:
- 95% of companies admit to hiring the wrong people every year. That is simply abysmal. If you can’t identify your A-Players, how can you hire and develop more of them?
- 98% of businesses believe performance management is important, and only 64% say they have an effective approach to it. This is an easy win. Ask your stakeholders what they would do with higher-performing employees, then show them how to get there.
- Only 3% of organizations say their performance management is top-notch, while 48% say their performance management needs some work.
- NEW: According to a survey conducted by Mercer, only 2% of companies believe their performance management process delivers “exceptional value.” Less than 3% find their feedback practices to be excellent. (Source)
- NEW: 70% of companies represented in the study said there should be a stronger link between performance management and other talent considerations. (Source)
Poor Performance Management Statistics:
- 86% of employees and executives say lack of collaboration or ineffective communication is responsible for workplace failures. Failing in the workplace happens, but it doesn’t have to be this common. Start small by looking for a low-cost, easy-to-use intranet or goals management solution.
- Focusing feedback on an employee’s weaknesses can cause their performance to decline by 27%. The key? Start looking at where they are succeeding. This is nearly impossible unless you have a transparent system that allows feedback on a consistent basis.
- 77% of HR executives believe performance reviews aren’t an accurate representation of employee performance.
Consistent Talent Management Statistics:
- 70% of their employees felt more valued, and 68% reported receiving more valuable feedback on all of their tasks.
- Companies and organizations with higher than average levels of employee engagement saw 27% higher profits, and 38% above average productivity. This is the money stat, right here. Investing in consistent, strong performance management will save your company actual money and make it MORE money. If you’ve ever had to argue for budget and been lobbed the ROI question, this statistic is your answer.
- 71% of employees who believe their manager can name their strengths say they feel engaged and energized by their work. So many executives are struggling with the engagement issue but few realize they can kill two birds with one stone by empowering managers and HR pros to work on developing people and giving employees the feedback that creates engagement within the workplace!
- NEW: So-called "thriving" employees are four times more likely to work for a company that understands their unique skills and interests than their "non-thriving" peers. (Source)
- NEW: While studies have shown that more frequent feedback can improve employee learning and task performance, there’s also a limit to its effectiveness. If feedback becomes overwhelming for employees, it can actually reduce learning and performance.
Behind the Data
There are a lot of unhappy and disengaged employees in the workforce and the explanations employees are providing for their early exits are vast and varied. The array of reasons makes it difficult to decide where to shift your focus...unless you notice the common denominator.
Talent development strategies encompass everything from feedback, reviews, and career development direction. When organizations are more purposeful in developing or improving their talent management, they experience great rewards. One company found that even though their changes weren’t exactly quick or drastic, soon after the implementation of a more purposeful performance management strategy, 70% of employees reported feeling more valued.
That’s right, employees felt more appreciated after simple enhancements to their work life. The above talent development statistics are pointing to things like clearer career paths and more recognition, but that isn’t necessarily what your employees are desperately seeking.
Take this time to show your people that you value their opinions and place them within your organization by sending an anonymous employee survey. Ask questions that will gauge their reactions to the current performance strategy or approach to team building and morale boosts. Ask for suggestions or changes they would like to see in the future. With such insight, you may begin to see patterns or pain points that more than a few employees notice.
To Try: Focus on the behavior, not the person. When managers deliver feedback focused on improvement, it needs to be seen as actionable and supported by facts. Feedback should always be about the behavior, not the employee or their intentions.
For instance, an effective approach for managers to address an employee’s behavior can go as follows: “I’ve noticed that you’ve arrived late to our weekly meetings four times this month.” A non-effective way of addressing employee behavior would be stating, “You have been very inconsiderate.” For feedback to have real value, it needs to be supported by concrete evidence and not just opinion.
Like we were saying above, you probably hire some winners, some soon-to-leave mismatches, and a few in-betweeners. While it would be wonderful to know who will be who before you send an offer letter, it’s highly improbable that, even with amazing HR technologies, we will ever get such insight. If you want to prevent the old, “it’s you, not me” talk, build a solid and successful talent management strategy.
Don’t know where to start? Schedule a one-on-one demo to discover how the ClearCompany Performance Management system could help you manage your employees better.
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