Study Also Cites Emerging Preference for Third-Party Software to Facilitate the Performance Management Process
FRAMINGHAM, Mass. (September 27, 2004) - Workscape, Inc., a proven provider of outsourced benefits administration and workforce management solutions, today released the findings of its 2004 Performance Management Practices Survey. The study, conducted by Workscape in the third quarter of 2004, reached a total audience of more than 125 HR professionals at medium and large U.S. companies and measured prevalence for linking pay with performance and the strategic potential of performance management.
Major findings of the study reveal that, although companies usually manage compensation as a separate process, most of the respondents see the ability of the performance management system to connect with and drive the company's reward practices as a fundamental requirement. The study results also support recent industry analyst research that indicates significantly increased market demand for more holistic, performance-driven compensation systems. With optimal resource utilization being a major concern in a fluctuating economy, the survey suggests that organizations will look to realize increased return on their people-related spending with the implementation of solutions that successfully link compensation with employee performance.
Tim Clifford, Workscape's President and CEO, said, "Enterprises across the globe are not fully leveraging their compensation investment due to antiquated pay programs that cannot recognize and reward the contributions of high-performing workers. In order to drive maximum workforce performance, and deliver increased shareholder value, companies must first improve their ability to align employee performance with compensation via the technologies that can automate and link the two processes. When compensation and performance management are effectively linked, organizations reap the benefits of an integrated, measurable, performance-based human capital management strategy."
Workscape's research findings also validate the assertion that senior managers are increasingly recognizing the business potential of performance management. Specifically, 55 percent of participants report that their senior managers believe performance management is strategic to the business, while only 8 percent consider it an administrative nuisance - a dramatic turnaround from just a year-and-a-half ago when a comparable survey found that only 18 percent of senior managers saw the performance management process as strategic and 36 percent considered it an administrative headache.
The study also reveals that while HR professionals understand the positive impact that a performance management solution can have on an organization and are currently working to strengthen their companies' performance management systems, they do not possess all the elements that are needed to maximize its potential. They see alignment of goals and ongoing management of performance as the elements of performance management most in need of improvement. Although almost all companies have a performance management system in place, 25 percent feel that their systems are not working well, while another 60 percent rate their system as only adequate, strongly suggesting a desire to improve their system. And while paper forms have given way to electronic forms, now in use in 62 percent of responding companies, when asked how their processes will be implemented one to two years from now, 54 percent of respondents indicate they would be using third-party software to facilitate the process, a significant increase from 11 percent currently.
"Continually faced with the mandate to effectively align employee performance with corporate business goals," Clifford added, "HR executives know the process improvements that can be gained through technology. That's why more companies are now investing in automated performance management solutions, electing easy-to-use best-of-breed software that can readily adapt to change and can be integrated with other systems, over trying to create internally developed applications."
Additional findings of the survey reveals that companies emphasize different aspects of performance management within the organization, ranging from performance evaluations, to people development, to ongoing management of performance. And at 49 percent of the companies surveyed, employees reportedly do not review and update their goals regularly during the year, making responding to changing priorities challenging when organizations must anticipate and adjust to changing circumstances.
A complete report of the survey findings may be requested via http://www.workscape.com/surveyPaper
About Workscape
Designed for the workforce, Workscape's solutions transform the delivery and adoption of HR services across the enterprise to maximize ROI and enable a higher-performing organization. An innovator in HR self-service, Workscape provides a full range of outsourced benefits and workforce management solutions including outsourced benefits administration, compensation management, performance management, employee self-service and manager self-service, as well as an employee portal. Workscape's applications and services are configurable to support each client's unique business processes and are easily integrated into multi-vendor environments to ensure protection of existing technology investments. Workscape's award-winning solutions have been embraced by millions of employees worldwide at more than 180 major corporations. For more information, visit the company website at www.workscape.com or call (888) 605-9620.
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