Nine in ten firms link reward to performance

PERFORMANCE MANAGEMENT

Nine in ten firms link reward to performance

Improving employee productivity is the most common objective of the performance management system, closely followed by "improve link to reward", according to a survey by PRPi Consulting.

The 39-company survey found that 92% of firms link employee reward to performance, and of these 70% have a "transparent" link, whilst 22% use a more arbitrary (discretionary) approach. Seven in ten survey organisations use their performance management system to determine bonuses.

Use of rating

Rating is one of the more controversial aspects of the performance management process. But the survey found that 84% of survey organisations still use an "overall performance rating". The most common number of levels in the ratings scale is the five-point scale, used by two-thirds of companies, while a fifth operate a four-point rating scale.

Other key survey results

• 40% of survey organisations conduct reviews more frequently than six monthly
• 98% of survey respondents use SMART objective settings
• 75% of the performance management systems feature leadership competencies, while 70% use core competencies and 54% use functional and technical competencies.

Want to know more?

Title: Performance Management Survey 2004, PRPi Consulting.

Methodology: The survey is based on survey returns received from 39 finance, professional and legal firms employing 423,000 employees in total. As many as 92% of survey respondents were based in the financial services sector.

Availability: The research is available from Richard Parkhouse at PRPi, tel: 020 7398 1880, email: richard@prpiconsulting.com

To find out more about PRPi Consulting visit www.prpiconsulting.com

Posted 1 June 2004