Effectiveness of Performance Appraisals Gets Mixed Reviews from HR Professionals in New SHRM Survey

October 21, 2014
Organizations that make performance management a priority gave their companies an effectiveness grade of either A or B

ALEXANDRIA, Va. — More than one-half (53 percent) of surveyed human resources professionals gave their organizations a grade between B to C+ for effectively managing performance reviews, according to a Society for Human Resource Management (SHRM) survey released today.

Another one-fifth (21 percent) gave their organizations a C in performance management, while only 2 percent gave their organizations an A, according to the survey, which was commissioned by and completed in collaboration with the National Center for the Middle Market (NCMM).

However, HR professionals who worked for companies that view performance management as a priority were more likely to give their organizations a higher performance appraisal effectiveness grade of either an A or B.

“Performance reviews are an effective tool when utilized correctly,” said Bettina Deynes, vice president of HR at SHRM. “But in order for them to be effective, there needs to be support from the leadership team and sufficient training for managers.”

When HR professionals were asked about the biggest obstacles keeping organizations from getting an “A” in performance management, common answers included lack of managerial time, insufficient training, higher business priorities, inconsistent evaluation standards, and lack of training.

“The findings also show that it pays off when companies make performance reviews a priority,” said Evren Esen, director of SHRM’s survey programs. “Because companies are putting less emphasis on blanket merit salary increases and instead moving toward incentive programs for high performing employees, performance management is becoming a key component of compensation reviews.”

Nearly one-third (30 percent) of HR professionals reported that performance management will be a top priority at their organizations in the coming year. Two-thirds (65 percent) indicated that some attention and resources would be given to performance management, though other business issues were a higher priority.

Almost three-quarters of organizations (72 percent) conduct performance reviews annually and 16 percent conduct reviews semi-annually, or twice a year. Only 3 percent of organizations do not conduct performance reviews.

SHRM surveyed 391 of its randomly selected SHRM members throughout the United States.

NCMM did additional research on performance reviews, which can be found at http://middlemarketcenter.org/research-reports/its-about-people.

For more surveys/poll findings, visit shrm.org/surveys. Follow SHRM Research on Twitter @SHRM_Research.

Media: For more information or to request an interview, contact Vanessa Gray at 703-535-6072 and Vanessa.Gray@shrm.org or Kate Kennedy of SHRM Public Affairs at 703-535-6260 and Kate.Kennedy@shrm.org.

About the Society for Human Resource Management
Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org and follow us on Twitter @SHRMPress.

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