Performance management programs tend to be very visible this time of the year as employees receive year-end performance reviews, discuss development needs, and set goals for the coming year. A survey by Mercer Human Resource Consulting recently gave employees the chance to assess their employers´ performance management programs -and the grades are not good.

Through its 2002 People at Work Survey, Mercer asked a scientifically valid sample of 2,600 US workers across more than 1,100 employers to share their attitudes and perceptions regarding their job, organization, work environment, compensation, benefits, and the management of their organization. Of the 180-plus questions in the survey, about a dozen pertained specifically to performance management practices and programs.

The employees surveyed generally concur that performance management programs are not performing optimally. They gave their employers´ programs the highest marks in five areas:

• "I have clearly defined performance goals and objectives" (61% of the employees gave a favorable response, either agreeing or strongly agreeing with this statement).

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• "I understand how my performance is evaluated" (61% favorable).

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• "My last performance review was helpful in identifying actions I could take to improve my performance" (55% favorable).

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• "Our performance appraisal process adequately distinguishes poor, average and good performance" (55% favorable).

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• "When I do a good job, my performance is recognized" (52% favorable).

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Employees gave performance management programs the lowest marks in these five areas:

• "My manager regularly coaches me on improving my performance" (26% favorable).

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• "When I do a good job, my performance is rewarded" (29% favorable).

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• "Employees in my department who perform poorly are appropriately managed" (29% favorable).

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• "I have had a formal performance appraisal in the last 12 months" (33% said yes).

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• "My manager gives me regular, informal feedback on my performance" (42% favorable).

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"Employees expressed a range of concerns regarding the performance management programs that affect their jobs, their pay, and their career advancement," says Rod Fralicx, PhD, global employee research director for Mercer. "Three out of four employees indicate that they receive little in the way of coaching, and nearly the same number question the connection between their performance and their pay."

The connection to commitment and satisfaction

Mercer´s 2002 People at Work Survey also asked employees to comment on their overall commitment to their organization and their overall satisfaction with both their jobs and their organizations. When employee attitudes regarding performance management are interpreted in the context of commitment and satisfaction, some interesting findings emerge:

• Among employees who said they´d had a formal performance appraisal in the last 12 months, 62% expressed a strong sense of commitment to their organization. This compares to 49% for employees who had not had a formal performance appraisal during the past 12 months.

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• Among employees who are coached by their manager, 80% feel a strong sense of commitment to the organization, compared to 46% among employees who are not coached.

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• Among employees who say they have clearly defined performance goals, only 18% are seriously thinking about leaving their organization, while among those without clearly defined goals, 46% are thinking of leaving. Likewise, employees who do not understand how their performance is evaluated are more likely to be thinking about leaving (18% vs. 41%).

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• Among employees who say good performance is recognized, 81% express overall satisfaction with their organization, compared to 37% for those who say good performance is not recognized. Similarly, employees who say good performance is rewarded express higher satisfaction than employees who say good performance is not rewarded (88% vs. 47%).

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"If ever employers needed a compelling reason to pay close attention to their performance management programs, this is it," Dr. Fralicx says. "Effective performance management has a strong connection to employee commitment, satisfaction, and engagement, which, in turn, can affect important business outcomes such as turnover and productivity."