shrm poll: performance management and other workplace practices

SHRM Poll: Performance Management and Other Workplace Practices

December 15, 2011In collaboration with APTMetrics.

SHRM/APTMetrics Poll: Performance Management & Other Workplace Practices ©SHRM 2011 2

Key Findings

How many organizations have a formal employee performance evaluation process? The vast majority (98%) of organizations reported that they had a formal employee performance evaluation process. Training for this process was required of people managers at nearly one-half (46%) of organizations, while the other nearly one-half (44%) provided voluntary training. Just under one-half (47%) of organizations required people managers to support all performance ratings with written behavioral examples.

Do organizations have a formal employee performance evaluation calibration or group review process? More than half (54%) of organizations reported having a formal calibration or group review process to ensure consistency across ratings/reviews, and of those, 61% reported that HR representatives were present and actively participated in all or a majority of these meetings.

Are organizations using competency models and quantitative performance metrics? The majority of organizations reported using both competency models and quantitative performance metrics, and many of these organizations indicated they had formally validated these measures.

Are diversity goals and policies tied to management incentive pay and business strategies? While more than half (59%) of organizations reported they formally and specifically tie diversity policies and programs to business strategies, less than one-quarter (22%) indicated that they tie managers’ incentive pay to the achievement of diversity goals.

How often do organizations monitor compliance with HR policies? Organizations reported that they regularly conduct at least spot checks to monitor compliance with policies related to performance, compensation, promotion and succession decisions. This monitoring was conducted most frequently by the local/business-unit HR and corporate HR.

Can employees appeal certain HR decisions through a formal process? Many organizations have appeals processes in place for HR decisions related to performance, compensation, promotion and succession decisions.


Does your organization have a formal employee performance evaluation process?

Yes, 98%

No, 2%

n = 510


Does your organization provide voluntary or mandatory training for the performance evaluation process?

Other

No, training not provided

Yes, voluntary training

Yes, mandatory training

3%

8%

44%

46%

7%

31%

48%

15%

All employees (n = 445)

People managers only (n = 444)

Note: Percentages do not total 100% due to rounding. Only respondents whose organizations had a formal employee performance evaluation process were asked this question.


Are people managers in your organization required to support their performance ratings with written behavioral examples as part of the formal performance evaluation process?

Yes, for all ratings Yes, only for ratings at/near top or bottom of rating scale

No

47%

26% 26%

Note: n = 481. Percentages do not total 100% due to rounding. Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations had a formal employee performance evaluation process were asked this question.

SHRM/APTMetrics Poll: Performance Management & Other Workplace Practices ©SHRM 2011

In your organization, who has direct input into the performance evaluation of the following categories of employees?

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Direct Supervisor

Other Management

Employee PeersDirect

ReportsCustomers HR Others

Senior executive evaluations (n = 451)

94% 41% 63% 14% 14% 10% 21% 6%

Exempt employee evaluations (n = 493)

97% 46% 68% 16% 12% 13% 23% 4%

Nonexempt employee evaluations (n = 486)

97% 39% 58% 10% 4% 9% 19% 3%

Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations had a formal employee performance evaluation process were asked this question.


Does your organization’s performance evaluation process involve a formal calibration or group review process to ensure consistency across ratings/reviews within a group (e.g., unit, department, division)?

Yes; 54%

No; 46%

Note: n = 463. Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations had a formal employee performance evaluation process were asked this question.


Are HR representatives included in all or a majority of these formal calibration or group review meetings?

Other

No, HR seldom or never attends

Yes, but they just facilitate and do not actively participate

No, but HR does attend meetings when requested or under certain circumstances

Yes, and they actively participate

5%

2%

15%

17%

61%

Note: n = 249. Only respondents whose organizations had a formal calibration or group review process were asked this question.


How often are employee ratings changed in formal calibration or group review meetings?

Never Infrequently Regularly

2%

63%

35%

Note: n = 242. Only respondents whose organizations had a formal calibration or group review process were asked this question.


Which statements reflect the most frequent reasons changes are made to employee evaluations during the formal calibration or group review meetings?

Other

Changes are made to fit the demographic distributions (e.g., race, gender, age) of ratings provided by HR or legal departments

Changes are made to fit the ratings to a planned distribution

A people manager learns new information regarding an employee's performance based on input from others in the group meeting

People managers were not rating employees consistently across the organization

6%

5%

39%

45%

69%

Note: n = 236. Percentages do not total 100% due to multiple response options. Only respondents whose organizations indicated that employee ratings were changed “infrequently” or “regularly” were asked this question.


Please answer the following questions about the use of the Competency Models performance management process

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Does your organization use this practice?

IF YES, has your organization formally validated this practice (e.g., conducted job analyses, survey of job importance with subject matter

experts, statistical analyses, formal report or technical documentation)?

Yes No FormallyValidated

Planning to Formally Validate or in Progress

Not Formally Validated

Organizationwide core competency model (n = 387)

69% 31% 64% 8% 28%

Organizationwide competency models that differ by job level (e.g., executive, management, individual contributor) (n = 387)

61% 39% 67% 10% 24%

Business unit/division/function competency models (n = 358)

45% 55% 56% 14% 31%

Position-specific competency models (n = 383)

51% 49% 56% 12% 32%

Note: Percentages may not total 100% due to rounding. Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations had a formal employee performance evaluation process were asked this question.


Please answer the following questions about the use of the Quantitative Performance Metrics performance management process

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Does your organization use this practice?

IF YES, has your organization formally validated this practice (e.g., conducted job analyses, survey of job importance with subject matter

experts, statistical analyses, formal report or technical documentation)?

Yes No Formally Validated Planning to Formally Validate or in Progress

Not Formally Validated

Organizationwide core quantitative performance metrics (e.g., units produced, sales, profit margin) (n = 346)

53% 47% 60% 5% 35%

Organizationwide quantitative performance metrics that differ by job level (e.g., executive, management, individual contributor) (n = 341)

52% 48% 62% 5% 33%

Business unit/division/function quantitative performance metrics (n = 350)

66% 34% 54% 4% 42%

Position-specific quantitative performance metrics (n = 332)

59% 41% 55% 7% 38%

Individual or job-specific performance goals (e.g., SMART goals) (n = 382)

87% 13% 40% 5% 56%

Note: Percentages may not total 100% due to rounding. Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations had a formal employee performance evaluation process were asked this question.


Does your organization tie incentive pay for management to the achievement of diversity goals?

Yes; 22%

No; 78%

Note: n = 382. Respondents who answered “Don’t know” or “Not applicable” were excluded from this analysis.


Does your organization formally and specifically tie diversity policies and programs to business strategies?

Yes; 59%

No; 41%

Note: n = 381. Respondents who answered “Don’t know” were excluded from this analysis.


Which open positions does your organization post internally?

Other

Executive/upper management (e.g., VP, SVP, CEO, CFO)

Nonmanagement hourly employees

Other management (e.g., directors, managers)

Nonmanagement salaried employees

8%

36%

90%

91%

93%

Note: n = 434. Percentages do not total 100% due to multiple response options.


Organizations that conduct frequent comprehensive (qualitative and statistical analysis) monitoring of compliance with policies related to the following HR processes for each group/department

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Performance Appraisal Ratings

Performance Goals

Base Pay Decisions

Incentive Compensation

Decisions

Promotion Decisions

Succession Decisions

Local/business unit HR (n = 325-368)

22% 19% 32% 25% 33% 26%

Corporate HR (n = 334-363)

21% 16% 34% 40% 24% 29%

EEO or diversity office (n = 271-301)

16% 12% 16% 12% 13% 10%

Legal (internal) (n = 294-329)

11% 9% 12% 12% 8% 8%

Legal (external) (n = 262-289)

6% 6% 8% 6% 5% 4%

Line management (n = 309-341)

12% 15% 17% 16% 19% 14%

Other (n = 37-57) 2% 5% 8% 17% 4% 9%

Note: Percentages do not total 100% due to multiple response options. Respondents who answered “Not applicable” were excluded from this analysis. Only respondents whose organizations had a formal employee performance evaluation process were asked this question. Percentages represent “5 = frequent/comprehensive (qualitative and statistical analysis) monitoring” responses from the following scale: 0 = none, this group does not have this responsibility; 1 = minor/occasional/random checks (qualitative checks only); 2 = regular/general spot checks (qualitative only); 3 = regular/general spot checks (statistical only); 4 = regular/general spot checks (qualitative and statistical); 5 = frequent/comprehensive (qualitative and statistical analysis).


What HR decisions can an employee appeal through a formal process?

Succession decisions

Incentive compensation decisions (e.g., stock, bonus)

Base pay decisions

Performance goals

Promotion decisions (not related to succession planning)

Performance appraisal ratings

32%

32%

51%

62%

63%

86%

Note: n = 305. Percentages do not total 100% due to multiple response options. Respondents who answered “Don’t know” or “Not applicable” were excluded from this analysis.


Demographics: Organization Industry

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Manufacturing 25%Retail trade 15%Health care and social assistance 14%Professional, scientific and technical services 9%Other services except public administration 9%Finance and insurance 9%Transportation and warehousing 7%Educational services 6%Accommodation and food services 5%Information, publishing industries 4%Utilities 4%Wholesale trade 2%Mining 2%Administrative and support ,and waste management and remediation services 1%Arts, entertainment and recreation 1%Construction of buildings, heavy and civil engineering construction, specialty trade contractors 1%Agriculture, forestry, fishing and hunting 1%Management of companies and enterprises 1%Repair and maintenance 1%Religious, grant-making, civic, professional and similar organizations 1%Personal and laundry services 0%Public administration 0%Private households 0%Real estate and rental and leasing 0%Note: n = 378. Percentages do not total 100% due to multiple response options.


Demographics: Organization Sector

19

n = 376

Other

Government sector

Nonprofit organization

Privately owned for-profit organization

Publicly owned for-profit organization

2%

3%

8%

24%

63%


Demographics: Organization Staff Size

20

n = 367

2,500 to 9,999 employees




50,000 or more employees

18%

26%

14%

19%

24%


Demographics: Other

21

U.S.-based operations only 29%

Multinational operations 71%

Single-unit company: A company in which the location and the company are one and the same.

3%

Multi-unit company: A company that has more than one location. 97%

Multi-unit headquarters determines HR policies and practices 38%

Each work location determines HR policies and practices 1%

A combination of both the work location and the multi-unit headquarters determine HR policies and practices

61%

Is your organization a single-unit company or a multi-unit company?

Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both?

Does your organization have U.S.-based operations (business units) only or does it operate multi-nationally?

n = 385 n = 387

n = 378

Corporate (company wide) 41%

Business unit/division 39%

Facility/location 21%

n = 377

What is the HR department/function for which you responded throughout this survey?

Note: Percentages may not total 100% due to rounding.


SHRM/APTMetrics Poll: Workplace Practices

Response rate = 11%

Sample composed of 510 randomly selected HR professionals from SHRM’s membership who worked in organizations with 2,500 or more employees.

Margin of error +/- 4%

Survey fielded August 22-September 12, 2011

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Methodology

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shrm poll: performance management and other workplace practices

Documents

performance management

performance ratings

formal process

majority of organizations

workplace practices

formal calibration

hr policies

group review process