For many employers and employees, the annual performance review is one of the most dreaded days of the year. All too often, managers aren’t even sure how to assess employees when they are confronted with a blank performance evaluation form. Even employees who believe they are performing well will walk fearfully into the annual review because they aren’t sure on what basis theyare being assessed. Everyone involved in the performance management process has wondered thesame thing at least once: Why bother? At companies in the midmarket segment, businesses withroughly 250 to 3,000 employees, performance management may seem like an unnecessary annual bureaucratic exercise.
However, nothing could be further from the truth. According to Josh Bersin, a leading analyst in thehuman capital industry, the business impact of a consistent, company-wide performance management process is significant. “Organizations with such processes have experienced less downsizing,have lower turnover among high performers and have nearly twice the revenue per employee asorganizations with no formal or consistent performance management practices.”