Five Ways U.S. Performance Management Practices Lag Behind Other Countries

A new Institute for Corporate Productivity (i4cp) study has found that U.S. organizations are stuck in the past when it comes to employee performance management policies, while emerging markets are utilizing practices more highly correlated with market performance.

Key findings from the three-country comparisons are outlined in Performance Management: A Comparison of Brazil, Russia and the U.S., which is based on responses from 1,427 organizations. The results suggest that years of familiarity with performance management have led to frustration and a loss of focus for U.S. organizations, while Russia and Brazil are building programs from the ground up that take past mistakes into account.

The U.S. falls behind in five key areas of performance management:

1. U.S. firms are less likely to apply performance management at all organizational levels.
The U.S. applies performance management to individual contributor-level employees more than Brazil and Russia, but is 35% less likely to conduct performance management with executives, despite that practice having a high correlation with market performance.

2. U.S. organizations offer less training in effective performance management for supervisors.
The U.S. offers less training to supervisors on managing performance in all six of the training categories queried on. For example, in the U.S., 37% fewer firms reported that they train supervisors on how to develop goals with their employees.

3. U.S. performance management systems do not address low performers.
More organizations in Brazil (46%) and Russia (41%) address low performers through targeted development plans, probationary periods, terminations and transfers than in the U.S. (34%).

4. Individual goal accomplishments are not considered as important in U.S. organizations.
While Brazil and Russia consider individual goal accomplishment a top measure of success, U.S. respondents point to performance review completion rates as their top success metric.

5. U.S. firms are not as forward-focused as their peers in Brazil and Russia.
U.S. respondents were less likely than those in Brazil and Russia to focus on forward-looking elements of their performance management process, such as goal-setting and developmental plans. Instead, U.S. organizations favor the more passive task of establishing performance ratings.

The report, which is available as a free download for a limited time, presents these key findings in more detail and illuminates the performance management danger zones that U.S. firms need to recognize and address.

Future reports in this series – to be released in the fall exclusively for i4cp member organizations – will examine the ways that high-performing organizations are differentiating themselves in the global performance management arena and will spotlight the specific practices of firms in the U.S., Brazil and Russia.