The Corporate Leadership Council Report published in 2006 combines key findings from previous Council research on performance management, employee engagement, and high-potential employee development using data from 135 organisations and more than 90,000 employees.
The Council examined 13 items related to performance management systems across three broad categories:
Content: Elements considered the “nuts and bolts” of a performance management system, including 360-degree reviews, forced ranking, number of formal reviews, and presence and challenge of development plans.
Connection and Understanding: Employees’ understanding of and relationship to the performance management system, including their understanding of the process and evaluation standards, belief that they are held accountable for the skills, behaviors and outcomes that are critical to the success of the organization, and their assessment of the link between the performance management system and organizational strategy.
Fairness and Credibility: Employees’ belief that they receive the performance ratings they deserve and that the system is fair and credible.
They found that it was possible to improve employee performance by over 36% through ensuring your employees understand the performance standards against which they will be assessed.