HR is hyper-focused on performance management going into 2024, new survey finds

In 2023, “efficiency” and “productivity” were favored buzzwords among CEOs, as companies focused on boosting profitability amid tougher economic conditions.

Going into the next year, measuring the success of these efforts is apparently a big focus for HR leaders, too. When Lattice surveyed more than 1,050 HR pros in July and August, 38% ranked “performance management” as one of their highest priorities in the next year, according to a report released on Dec. 5 by the HR tech company. That’s 11 percentage points higher than 2022, when 27% of HR pros ranked performance management as a high priority.

Employee engagement also ranked as a top HR initiative for the third year in a row, with 38% of respondents identifying this as one of their highest priorities.

Performance management is key to engagement. Regina Ross, chief people officer at the edtech nonprofit Khan Academy, said she wasn’t surprised to see performance management rank high on HR pros’ priorities going into 2024. Ross, who is a member of Lattice’s CPO Council, said many of her CPO colleagues have seen “major reductions in force” this year.

“When you’re looking at having to do maybe more with less people, you really have to make sure that you are focused on accelerating performance,” Ross said. “I think the times that we’re in…elevated the need for performance management, as you’re evaluating, honestly, who do we keep and who do we release?”

Performance management may sound intimidating to employees, but it doesn’t have to be, she added. “It’s not just dealing with problem performers,” she said. “It’s setting expectations.” Ross said her team asks Khan Academy employees to set individual goals that align with the company’s performance objectives, and schedules quarterly check-ins with workers to discuss their progress, as well as any obstacles getting in their way. She also has virtual standups with her team each Monday to ensure everyone is aligned on their objectives.

Supervisor bias and a lack of clarity around advancement opportunities were common concerns voiced by full-time workers in a recent survey by pay equity software platform Syndio about the performance review process. More frequent check-ins (ie, two or three times a year) were associated with lower concerns, and 38% of respondents said their companies had shifted to this approach.

Focusing on performance management can be critical in keeping employees engaged, particularly during tougher economic periods, Ross said. After layoffs, high performers may be particularly sensitive if they pick up on other workers who aren’t carrying their weight.

“If we have people who are not performing and they’re not being addressed, then it lowers the morale of the high performers…So it’s a difficult topic to unpack. But it’s necessary.”

Don’t overlook total rewards. Benefits ranked last among the highest priorities of HR pros surveyed by Lattice, with just 11% identifying it as a top focus (last year was similarly low, at 12%). Meanwhile, 22% of respondents said compensation was one of their highest priorities, compared to 25% in 2022.

Despite the lower focus on total rewards, Ross said it’s important not to lose sight of these initiatives.

“Total rewards may not be at the top of the list because of everything that’s been going on. But I will say as a people leader, I can’t forget about it,” she said. “Because I know, yeah, people are here for the mission. But they still want to get paid.”