As the economy faces challenges, focus on performance management has intensified. From the business perspective, companies are paying more attention to performance to ensure that all employees make meaningful contributions during leaner times. From the employee perspective, as fewer people actively seek employment elsewhere, there is a focus on learning how they can thrive and progress at their current companies.

Performance Management Process – More Than the Annual Review

The Croner Company’s recent 2024 Performance Management Practices survey found that performance management processes are very much in use. These practices may be on either a formal or informal basis.

A total of 105 companies participated in the survey, representing the following industries: animation, cable programmers, cable providers, digital content and technology, film and television production, local media stations, software gaming and grantmaking foundations.

The study found that, typically, the performance management process includes employees at all levels. The prevailing practice is to conduct performance reviews annually. In addition to an annual review, most companies also have regular check-in sessions with employees. The most prevalent frequency of check-ins is quarterly, followed by weekly.

The companies surveyed use several types of performance evaluation methodologies. The most prevalent type is manager review in combination with employee self-assessments. Other popular evaluation methods include cross-department calibration, 360 reviews, cross-organization calibration and, to a lesser extent, forced ranking. When companies use 360 reviews as part of their performance evaluation process, a majority use 360 reviews for all employees, rather than limiting this type of review to select organizational levels.

Performance evaluation criteria used in employee review processes include achievement of goals at an individual and/or team level, competencies (e.g., knowledge, skills, abilities) and discretion.

Performance Ratings – More In Than Out

While much has been written in recent years about the trend of companies dispensing with a traditional ratings system connected to salary adjustments, a majority of the companies that participated in the survey use performance ratings. Of those that use ratings, most use the ratings to determine adjustments to base salary. A majority use the ratings to determine, at least in part, the size of individual bonus awards.

The number of rating levels used is typically five or more. When companies use performance ratings to determine salary increases and/or bonus awards, they use these ratings in combination with other criteria. Examples of other criteria include company performance, benchmarking data, position in range, past increases, compa-ratio, goal completion, tenure and manager discretion. Typically, the same rating is used to determine both adjustments to base salary and individual bonus award sizes. However, the majority of companies surveyed apply the ratings differently to the two compensation elements.

Our study found the use of performance ratings is significantly less prevalent in the grantmaking foundation sector compared to the for-profit entertainment and media industries. If you are a grantmaking organization, performance ratings may be “out.” However, if you are in the entertainment and media industry, ratings may be back “in” – or they never left.

Evaluating Performance – More Than Individual Goals

Although we did not survey the effectiveness of the programs, in recent roundtable discussions our survey participants and clients have indicated that they are modifying their programs to be more effective in evaluating performance. These changes are not only in relation to role expectations but also in how each employee demonstrates the organization’s shared values and competencies.

Performance Management – More Important Now Than Ever

As you focus on your current performance management practices, seeking to improve performance and help employees develop in their roles, we are here to help. If you have any questions about our survey results or would like assistance in drafting position content or competencies, please contact The Croner Company.

The Croner Company’s surveys and consulting services are relied upon by organizations at all stages of growth to establish and modify pay practices and align compensation with mission, values and market.

Challenging Times Lead to a Renewed Focus on Performance Management