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Good Performance Management Aids Retention and Productivity

Good Performance Management Aids Retention and Productivity

The performance management processes of planning, monitoring, developing, and rewarding performance surface time and again as critical factors for success. For example, in the 1998-1999 Hay Employee Attitudes Study, "Competing for Talent: Creating A Work Climate to Attract, Motivate and Retain High Performing Employees," the Hay Group compares two groups of employees – those committed to the organization and those planning to leave. Many of the critical factors affecting employee retention relate to the quality of performance management. These include:

  • type of work (planning);
  • coaching/feedback from boss (monitoring);
  • opportunity to learn new skills (developing);
  • training (developing); and
  • recognition for a job well done (rewarding).

In another study of 100,000 employees of 2,500 organizations, the Gallup Organization pinpointed employee attitudes that are present in highly productive work groups and that relate directly to the rate of employee turnover, customer satisfaction, and productivity. Many of these attitudes reflect effective performance management practices. Employees in such work groups report high levels of agreement with the following statements:

  • I know what is expected of me at work (planning);
  • At work, I have the opportunity to do what I do best every day (planning);
  • In the last 6 months, someone at work has talked to me about my progress (monitoring);
  • There is someone at work who encourages my development (developing);
  • I have the materials and equipment I need to do my work right (developing);
  • This last year, I have had opportunities at work to learn and grow (developing); and
  • In the last 7 days, I have received recognition or praise for doing good work (rewarding).

As if these findings weren't enough to clearly show performance management as a critical process for organizational success, additional supporting data comes from the nationwide survey "Attracting and Retaining High-Technology Talent," co-sponsored by William M. Mercer, Inc. and the Pittsburgh High Technology Council. This report highlights best tactics for retaining experienced employees. Several of these tactics relate to effective performance management, including:

  • giving challenging work assignments (planning);
  • offering career development opportunities (developing); and
  • providing incentives under variable pay arrangements (rewarding).

The results of these surveys show that effective performance management is critical to retaining good employees and achieving a productive work environment. To ensure that performance management is implemented effectively in your organization:

  • set goals and plan work routinely,
  • measure progress toward those goals,
  • give feedback to employees,
  • develop employees' skills so they can reach their goals, and
  • use formal and informal rewards to recognize the behavior and results that accomplish organizational mission.

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