Adare’s most recent HR Barometer revealed that 86% of Organisations have a performance management process in place. While this figure indicates that Organisations recognise the importance of implementing a formal performance management process, the data also revealed that 33% of Organisations admit their current process is not working and intend to adapt their approach to performance management in 2025.Let’s explore why performance management has developed into such a key priority for Irish Employers.
What is Performance Management?
Performance management has been defined as ‘systems and attitudes which help Organisations to plan, delegate and assess the operation of their services.’ Performance management relies on the principle that better individual Employee performance will result in better productivity and ultimately better overall Organisational results.
A robust performance management system will:
– Set individual and team objectives that align with overall Organisational goals.
– Monitor and enhance Employee and Organisational performance.
– Make Employees accountable for performance levels by rewarding strong results with better benefits and career development opportunities.
Not Simply a Process to Manage Poor Performance
Although a performance management process should be capable of identifying deficiencies in individual Employee performance, the overall goal is to maximise individual and Organisational performance.
The Organisational upsides of effective performance management include:
– Clear alignment of individual Employee activity with Organisational goals and targets.
– Early identification of positive performance and areas of concern to address.
– Improved Employee satisfaction and retention.
– Encourages career development and nurtures strong performers.
– Facilitates succession planning.
– Ensures salary increases, bonuses, and promotions are based on objective data and merit rather than subjective judgment.
– Creates a culture of accountability and continuous improvement.
– Early identification of performance issues before they escalate.
Performance management is therefore a key component in maximizing both individual Employee and overall Organisational performance. An effective performance management process fosters a high-performance culture, promotes continuous improvement, and ensures that Employee performance aligns with the Organisation’s strategic direction.
Recent Trends in Performance Management
Adare’s Barometer series has been tracking performance management trends in recent years. 74% of Organisations reported having a performance management process in 2022. That figure rose to 83% in 2023 and 86% in 2024 indicating that more Organisations are seeing the value in a greater focus on performance management.
Against that, the most recent figures reveal that only 57% of Organisations felt their performance management process was either highly effective or effective. When asked what factor would have the biggest positive impact on the effectiveness of performance management processes, almost three in ten (29%) survey participants identified more regular reviews, with 17% highlighting clearer frameworks and training for managers and one in ten (11%) pinpointing clearer links to bonus and salary.
There has also been volatility in recent years in the number of Organisations that are satisfied with the effectiveness of their performance management systems. 61% were happy with their performance management process in 2022 but this figure fell to 49% in 2023 before rising to 57% this year. This high level of variability suggests that Organisations may need to devote more attention to the planning and strategic elements that inform the development and implementation of a new performance management process.
One of the most notable statistics in the most recent HR Barometer is that 33% of Organisations recognise their current performance management process is not working and plan to change it in 2025. The most common area that Organisations feel they need to improve on is continuous feedback and two-way dialogue at 10%. 7% of Organisations identified a greater focus on personal and work goals to enhance performance management. This focus on improved communication and Employee development demonstrates that these Organisations are recognising the value of ensuring that performance management is a two-way process.
Boost Employee and Organisational Performance
Organisations are recognising that Employee satisfaction and retention are deeply intertwined with performance management activity. The recent data shows that changing performance frameworks to be more people-centred could have a tangible impact on overall Employee engagement, retention, and productivity. This trend highlights a strategic shift towards performance management systems that are more dynamic, growth-oriented, and aligned with Employee aspirations. A performance management process which values, supports and facilitates ongoing learning and development creates a “win-win” for both the Organisation and for the individual Employee.
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Adare is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. If your Organisation needs advice, support, or guidance about compliance requirements or any HR issues, please contact Adare by calling (01) 561 3594 or emailing info@adarehrm.ie to learn what services are available to support your business
