2026 Performance Management Survey
85% of HR leaders are confident performance management works 44% can prove it
HR leaders told us performance management drives results. When we asked them to prove it to their CEO, fewer than half could. Our survey of 934 HR and business leaders across the US and UK finds the real problem is evidence.
The paradox
77%
say formal reviews
contribute positively
67%
say eliminating them would improve results or cause no harm
Leaders still value accountability. It’s the formal review process itself that’s no longer seen as valuable to achieving business results.
Explore the six findings
Finding 01
Confidence is outrunning proof
85% of HR leaders are confident; only 44% can prove it with metrics. Measuring outcomes is the top-named breakdown for both HR and business audiences.
Read the full finding: 'Confidence is outrunning proof'
Finding 02
HR and the business hear different executive priorities
Asked to name the top priorities getting executive attention, HR and business leaders gave different answers. HR leans into AI transformation (52%) and workforce capability (33%). Business leaders — the people-managers actually running things — lean into revenue growth (59%) and operational efficiency (36%)
Read the full finding: 'HR wants AI capability. The business wants revenue growth. Who's right?'
Finding 03
Redesign isn’t landing in the business
69% of HR leaders say the performance process was redesigned in the past two years; only 44% of business leaders say a redesign happened — a gap that widens to 80% vs. 53% when redesigns-in-progress are included.
Read the full finding: 'HR says it redesigned performance management. The business didn't notice.'
Finding 04
The formal review is losing value
77% of business leaders say reviews help. 67% say ending them would help or cause no harm. 69% still describe their process as an annual or semiannual review.
Read the full finding: '77% say reviews help. 67% say cutting them wouldn't hurt. Both are true.'
Finding 05
Managers are the key to change, and HR’s biggest blind spot
HR rates managers 75–84% effective across core skills. But the business leaders surveyed are themselves the managers, rating their own effectiveness and their peers' — and their self-scores land lower across the board, especially on AI support (51% vs. 75%).
Read the full finding: 'Managers are the key to evolving. They're also HR's biggest blind spot.'
Finding 06
Different blame, same diagnosis
HR and business leaders agree on where performance breaks down — measuring outcomes, goal alignment, and feedback. Where they split is on why: HR's top obstacle is technology limitations (31%); business leaders point instead to admin burden and manager time.
Read the full finding: 'HR blames the tech. The business blames the workload. Here's where they agree.'
The action plan
Start driving business execution by
building real-time performance
Stop planning a better review cycle. Six actions, for a more impactful change.
Start with 3 business outcomes to impact
Agree with business leaders on three outcomes performance management can influence before planning locks in.
Design with business leaders, not for them
They’re already experiencing the friction firsthand, and they’re the key to any redesign actually landing.
Replace calendar-led goals with real-time adaptive alignment
Trigger goal reviews off real events, not a fixed schedule.
Measure whether transformation actually lands
Get manager and employee feedback on value, not whether HR launched something.
Build manager confidence for leading in an AI era
Only 51% of business leaders rate themselves highly effective at supporting employees’ AI use. HR rates managers at 75%. Close the gap together.
Make reviews lighter, and everything between them stronger
Automate the evidence to eliminate admin. Focus on goal alignment, accountability, coaching, and delivering results.
Where Betterworks fits in
This research points to one shift: from performance management as a compliance cycle to performance management as a business execution system.
Betterworks helps you create your talent strategy that aligns to your business strategy, holding your teams accountable to achieve goals while coaching and developing employees in the flow of work through Goals, Feedback, Conversations, 1:1 meetings, and Talent Intelligence, so alignment, manager support, and proof of impact are happening in real time, not a once-a-year review.
01Automate evidence
Evidence captured automatically
Goals, Feedback, Conversations, and 1:1 meetings are things you’re already doing. Capture performance signals in real time, how you’re already working. Don’t reconstruct from memory at review time.
From
Proof assembled once a year, from memory.
To
Evidence captured in real time from the activities you’re already doing, in the tools you’re already working in.
02Align goals
Goals that change as fast as your business priorities do
Company priorities cascade into team and individual goals, so everyone's work stays connected to what matters most.
From
Goals that update on a calendar, whatever changed.
To
Goals that can be revised, paused, or retired as soon as priorities shift.
03Connected solution
One solution connecting people performance to business outcomes
Talent intelligence ties workforce signals to the priorities the business actually cares about, so HR can show proof, not just activity.
From
Activity and participation metrics.
To
HR, managers, and the business co-owning the proof.
Built to run performance at scale
90+
Implementation NPS score
2M+
Employees run performance on Betterworks
14+
Average years of HR experience on the implementation team
Related Resources
Go deeper in the research
New research: 934 HR and business leaders reveal why 61% can't prove performance management drives results, and the gaps to close before 2027 planning.
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New research: 521 HR and business leaders reveal why managers are 94% effective at adaptive orgs vs. 59% at those behind, and what to fix first.
14 min read
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76.9% of leaders say formal reviews help, yet 67.0% say eliminating them wouldn’t hurt. See what Betterworks’ 2026 survey found about annual reviews.
5 min read
Read moreReady to get started?
Read the full report
The complete six-finding research write up, with every chart and the methodology behind it and also what 61% of 934 leaders couldn't prove to their CEO.
Talk to an expert
For teams ready to discuss closing the distance between what performance management does today and the proof you need tomorrow.
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Start making business execution visible.
