Yesterday, we shared the results of BLR’s 2014 Performance Management survey (BLR is CER’s parent company); today, the rest of the results.
Supervisors’ Role in Performance Appraisals
Management’s top responsibilities when it comes to performance evaluations are writing evaluations of their direct reports for 85.6 percent of survey participants, followed closely by setting goals for/with employees for 78.3 percent, conducting review meetings for 75.3 percent, and coaching employees for improved performance for 75.3 percent.
Finishing out the field is reviewing evaluations prepared by their direct reports for their own employees (64.6 percent), deciding employee salary raises (50.8 percent), and providing input to other supervisors on their direct reports (40.5 percent).
The errors performance evaluators make include: not completing the evaluation (13.8 percent), halo effect (18.6 percent), and horn effect (12.3 percent). The three most common errors are:
- Not following up with the employee to check on progress (40.1 percent)
- Not wanting to hurt feelings or overrate so evaluations place all employees in the middle of the scale (40 percent)
- Focusing on the most recent performance rather than the entire review period (38.9 percent)
| Supervisor’s Error |
Percent reporting that error |
| Rater does not follow up with employee after evaluation to check on progress |
40.1% |
| Central tendency (Rater doesn’t want to hurt feelings or overrate so places all employees in the middle of the scale.) |
40.0% |
| Recent effect (Rater focuses on most recent rather than entire review period.) |
38.9% |
| Rater is late completing evaluations |
38.3% |
| Leniency effect (Rater overrates to avoid making enemies.) |
37.6% |
| Rater does not include details on why employee was rated a certain way |
37.4% |
| Rater does not include a plan for improvement |
25.5% |
| Halo effect (Rater evaluates overall performance based on a single area in which the employee excels.) |
18.6% |
| Perceptual bias (Rater bases rating on their own perception of what is right or wrong or acceptable.) |
16.4% |
| Rater does not complete the evaluations |
13.8% |
| Primacy effect (Rater focuses on a good or bad incident from when the employee first came under his/her supervision.) |
13.8% |
| Just like me tendency (Overrates employees who share his/her own interests/beliefs.) |
12.6% |
| Horn effect (Rater underrates overall performance based on a single negative impression of the employee.) |
12.3% |
| Other |
3.5% |
Performance management for HR: Webinar coming next week! Learn more.
Implementation of Performance Appraisals
When asked how they’ve successfully implemented performance appraisal programs, survey participants provided several helpful hints, including:
- Publish a performance calendar at the outset of the year:
- Personally follow up with delinquent supervisors/managers.
- Inform department directors of delinquent reviews.
- Send the CEO an overall status report on ratings, including who has not completed their reviews.
- Offer assistance as needed; train individually as requested.
- Tie to supervisor/manager job performance.
- View the process as developmental, not punitive.
- Make evaluation forms shorter.
- Tie all bonus disbursement for team to completion.
- Allow enough time to complete evaluations and supply support where needed.
- Automate the process.
HR’s responsibility for the performance appraisal process varies but several functions were widely practiced, including:
- Formal training for supervisors/evaluators (50.8 percent)
- Reviewing all evaluations (54.5 percent)
- Filing the paperwork (56.9 percent)
- Informal coaching for supervisors/evaluators (60.3 percent)
Additionally, for 40.7 percent of survey participants, HR screens performance evaluations for anything that might be illegal before supervisors/managers meet with employees.
Merit Increases
Evaluations are tied to most salary increases for 47 percent, are completely separate for 21.9 percent, and are partially tied together for 31.1 percent. Those that separate evaluations from increases do so because:
- A union agreement governs pay increases (7.8 percent).
- Evaluations are conducted more frequently than raises are issued (9.9 percent).
- Employee pay increases are on a different schedule than evaluations (16.5 percent).
- They fear supervisors will be tempted to give good yet false appraisals so employees receive a good raise (18.1 percent).
- Budget doesn’t allow for raises every time employees receive evaluations (18.2 percent).
- Appraisals are more valuable and constructive if raises aren’t tied to them (19.5 percent).
- It helps keep employees from having an entitlement mentality (evaluation = raise) (26.1 percent).
- They want to focus attention on employee performance instead of on amount of raise (32.7 percent).
Are there serious holes in your performance management process? Fix the problem once and for all with our webinar next week. Learn more.
Appraisals Under Pay Freezes
Even if salary increases are not an option due to pay freezes or some other reason, 84.6 percent of survey participants still conduct performance appraisals.
Performance Pay by Employee Type
|
Type of Pay |
Execu-tive |
Middle manage-ment |
Profes-sional |
Exempt staff |
Non-exempt staff |
| Bonus |
49.8% |
44.2% |
37% |
36.1% |
27.5% |
| Merit plan |
46.4% |
55% |
54.2% |
56.1% |
55.1% |
| Long-term incentive |
18.9% |
6% |
3.9% |
3.2% |
2.1% |
| Commission |
4.9% |
3.7% |
4.3% |
4.1% |
4.6% |
| Piece rate |
|
|
|
|
1.9% |
| Other |
6.4% |
4.8% |
4.7% |
4.6% |
6% |
| None |
26.9% |
28.4% |
30.7% |
30.1% |
31.4% |
Group Performance Pay by Employee Type
|
Type of Pay |
Executive |
Middle manage-ment |
Profes-sional |
Exempt staff |
Non-exempt staff |
| Bonus |
25.2% |
22.5% |
19.2% |
19.4% |
15% |
| Merit plan |
16.7% |
18.3% |
18% |
18% |
17.7% |
| Long-term incentive |
7.8% |
3.1% |
2.4% |
1.6% |
1.3% |
| Commission |
2.4% |
2.1% |
2.9% |
1.6% |
2% |
| Piece rate |
|
|
|
|
1.6% |
| Other |
2.2% |
2% |
2.1% |
2% |
2.5% |
| None |
66.8% |
65.8% |
67.5% |
67.9% |
69.1% |
Survey Participants
Demographic breakouts of the 1,481 participants in the survey are below.
| Number of Employees | Percent of Respondents |
| Up to 250 employees | 57.4% |
| 251 to 1,000 employees | 22.9% |
| 1,001 to 10,000 individuals | 16.9% |
| More than 10,000 employees | 2.8% |
Of the participants responding to our survey, 39.4 percent have a workforce that is one-fifth or less exempt employees. Another 32.8 percent have a workforce that is more than one-fifth but less than one-half exempt, and 27.8 percent have a workforce with more than one-half exempt employees. Unions represent employees at 22.2 percent of our survey participant employers.
Privately owned organizations are represented by 47.8 percent of survey participants, and nonprofits account for 18.7 percent. Public corporations make up 8.6 percent, and governments are represented by 10.1 percent.
Industries include manufacturing (15.4 percent); health care and social assistance (13.7 percent); finance and insurance (9.8 percent); and professional, technical, and scientific services (8.1 percent). Educational services represent 6.9 percent of our survey participants, and retail trade accounts for 2.3 percent.
Our 1,481 survey participants’ positions:
| Job Title | Percent of Respondents |
| HR Coordinator | 4.1% |
| HR Generalist | 9.5% |
| HR Specialist | 4.9% |
| HR Manager | 26.5% |
| HR Director | 24.3% |
| HR VP or above | 9.2% |
| Other area with HR responsibilities | 18.7% |
Thanks again to the 1,481 survey participants!
Performance Management for HR: Communicate and Follow Up for Best Results
Live webinar coming next Thursday, December 18
10:30 a.m. to Noon Pacific
A perfect performance management program provides employers and employees with a measurement of how the job—and the organization—is faring. With a good program in place, you can get feedback on how committed your employee is to the company. To retain talent and top performers, it’s vital to establish this dialogue.
But it can be challenging for HR. There’s the constant flow of performance evaluations. Informing an employee that he or she isn’t quite living up to expectations can be uncomfortable. And many supervisors make errors in evaluating, like relying on the most recent conduct to make a judgment, overrating performance, or even underrating performance to avoid appearing biased.
How can you develop a rapport with your employees so you know what motivates them? How can you make your expectations clear and let them know when they are and are not meeting those expectations? What should every manager know to ensure that employees perform at their highest potential? How can a manager lead by example, build loyalty to the organization, and ultimately train and retain top performers?
Attend this 90-minute webinar next Thursday, and learn:
- How to communicate expectations
- When and how to provide training
- How often to give official evaluations
- The most frequent errors managers make in employee reviews, and how to correct them
- Follow-up and ongoing feedback matters
- How to immediately address an employee’s performance
- How to provide a reward and compensation system that motivates employees
- How to establish communication that engages employees with the organization
- And much more!
In just 90 minutes, you’ll become a much better performance manager—which, in turn, will improve the performance of your entire organization. Don’t miss it—claim your spot today.
Can’t make it next Thursday? No problem—order the CD, and learn at your convenience.
Download your copy of 10 Tips for Effective, Legal Performance Appraisals today!