PMS Strategies Associated with Greater Profitability and Employee Retention

July 11, 2007: 01:00 PM EST
Companies implementing a Best-in-Class Employee Performance Management (EPM) solution experienced revenue and income growth rates greater than average, and had lower levels of employee turnover, according to a new report from Aberdeen, a Harte-Hanks Company (NYSE: HHS). The latest Human Capital Management (HCM) benchmark report from Aberdeen, titled "Enhancing Operational Results with Employee Performance Management," also found that companies do not need to use EPM solutions to be considered Best-in-Class, but companies using a technology solution significantly outperformed their peers and exceeded Best-in-Class performance. Companies using a technology solution were also three times more likely to be satisfied with their employee performance management process than those using a manual solution.
"While 95% of companies regularly conduct performance reviews, only 11% indicate that they are very satisfied with the current process," said Allison Stamm, research analyst, Aberdeen. "This indicates a real need to better align the overall goals of the process with the actual implementation of the solutions being used in order to obtain all the ancillary benefits."
Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics with respect to employee performance management. Best-in-Class companies: are more likely to provide tools to assist with the process of managing and developing employees, aggregate, summarize, and regularly report on results and measures, and monitor the performance of teams and work groups, as well as individuals.
Three principle barriers stand in the way of implementing an employee performance management solution: the perceived cost of the solution, an insufficient time to implement, and a lack of awareness around potential solutions -- noted as the leading challenges for not implementing an employee performance management strategy.
This report is made available to the public through the underwriting of: Beeline and SilkRoad Technology