2025 State of Performance Management
Uncover the performance management strategies driving real results across 2,000+ companies. The 2025 State of Performance Management report by PerformYard analyzes emerging trends, proven best practices, and measurable organizational impact. Learn what works for sustainable growth, higher employee engagement, and better employee performance management.
Consistent Systems. Focused Questions. Effective Management.
Successful performance management isn't about intuition. It's about evidence. Below are three core practices that separate top-performing companies from the rest, revealing exactly what moves the needle on engagement, goal achievement, and manager effectiveness. These aren’t just tactics, they’re part of a broader, effective performance management system that supports strategic objectives and talent management.
Goal Completion Boost
Organizations that use PerformYard’s performance management tool for 4+ years see a 27% boost in goal completion. When employees work with clearly defined performance goals, supported by regular performance assessments, they achieve more and contribute to better team performance.
Optimal Number of Review Questions
Companies that include 3-5 long-text questions (open-ended questions) in their review form see the highest review completion rates. This structure encourages more thoughtful answers and provides HR managers with constructive feedback they can use to identify skill gaps and support career development.
Company eNPS Increase
Companies in which managers have 1-5 direct reports have a 7% higher eNPS than companies in which managers have 15+ direct reports. Smaller teams allow for more frequent check-ins, instant feedback, and an improved work environment – key ingredients for good performance.
Consistent Systems, Focused Questions & Effective Management
Successful performance management isn't about intuition. It's about evidence. Below are three core practices that separate top-performing companies from the rest, revealing exactly what moves the needle on engagement, goal achievement, and manager effectiveness. These aren’t just tactics, they’re part of a broader, effective performance management system that supports strategic objectives and talent management.
The Right Review Format Boosts Participation
Are your employees skipping your performance reviews? Short forms can often feel pointless and don’t get filled out. Instead, our data shows reviews with 15-20 questions (including 3-5 longer, open-ended questions) align better with the complete performance management cycle and improve participation.
More Goals = More Achievement
Many employees don’t reach their full potential when they have too few goals. This lack of direction can hurt individual and organizational culture. We found giving team members 20-30 goals each year leads to a 38% higher goal completion rate compared to giving them 5 or fewer. Strong goal setting is a critical starting point in any planning process, aligning individual efforts with business objectives.
Performance Management Pays Off Over Time
See what happens when companies commit to improving employees' performance. As time goes on, the right systems – backed by a thoughtful appraisal process and consistent review process – lead to more goals completed, fewer performance issues, and faster growth. Data from thousands of teams proves that small changes today can lead to big results in the future.
The PerformYard Impact
Some performance systems rely on traditional performance appraisals that fail to show real results over time. This can lead to low engagement, missed goals, and slow growth. But with PerformYard, companies see higher goal completion, better employee satisfaction, and an average of 66% team growth by year four – helping them attract and retain top talent.
Key Performance Insights
Our comprehensive research reveals striking patterns in performance management practices and their impact on organizational outcomes.
15-20 questions
Review completion rates peak when reviews contain 15-20 questions.
≤5 questions
Review completion rates are lowest when reviews contain 5 or fewer questions.
3-5 text questions
Review completion rates are highest when companies use 3-5 long-text questions per review form.
20-30 goals
Employees with 20-30 annual goals have 38% higher goal completion rates than those with 5 or fewer goals.
Frequently Asked Questions
Get answer to common questions about our 2025 State of Performance Management Report.
How was the data for this report collected?
The data in this report comes from over 2,000 companies of all sizes and industries. It includes anonymous info on growth, turnover, and performance practices, showing clear patterns based on how long companies have used PerformYard.
How often is this report updated?
The State of Performance Management report is updated every year to share the latest trends, tools, and ideas. This helps teams stay up to date with innovations from recent years and make better decisions about how they manage performance.
Can I share this report with my team?
Yes! You can share the State of Performance Management with others. If you download the full report, feel free to share it with your team. We hope you use the ideas in the report to help improve performance management at your company.
How can I implement these findings in my organization?
You can start by reviewing the key takeaways and seeing which ones match your current challenges. Focus on one or two areas, like improving review formats or setting clearer goals. Then, work with your team to test small changes and track the results. Over time, we believe these updates can lead to better performance and higher engagement.
How do I get started with PerformYard performance management software?
Getting started with PerformYard is easy. The best way to learn how it can work for your team is to see it in action. Sign up for a free demo to explore the platform, ask questions, and see how it can help you simplify reviews, set better goals, and boost employee engagement.