According to the survey by outsourcing firm PlusHR, 75% of HR professionals not being included when business strategy is formulated.
HR is being used predominantly to communicate corporate objectives (57%), rather than being consulted when actually setting them (25%).
Only 10% of respondents felt that employees' objectives were totally aligned to those of the organisation, with over half stating that objectives were at best partially aligned, or not at all.
Almost a third of companies have no mechanism in place for performance-based rewards and only 14% could say confidently that "above and beyond" performance was rewarded satisfactorily.
Marc Bishop, director, HR Consulting, PlusHR, said: "The research highlights the endemic problems within modern corporate HR functions, which despite their best endeavours over the last decade or so, aren't actually aligned with business when creating Corporate strategy. What this means in reality is that HR continues to be the messenger of Corporate strategy, rather than part of the instigation of it. This really is a missed opportunity, as HR can play a critical role to ensure that the creation and maintenance of strong links between corporate strategy and personal objectives to deliver on-going business success."
"Employee costs are often a substantial cost for organisations, in many cases even the largest. It is clearly therefore important to retain and maximise this valuable asset, but by failing to reward high performance, an organisation's future performance could be undermined as employees become demoralised and are not incentivised to perform at higher levels - a particular concern when the higher performing employees are also the most prone to leave.
"In a struggling economic climate, the need for organisations to examine how the existing approach to performance management can be improved upon becomes ever more pertinent. Now is the time therefore, for organisations to invest in strategies which maximise the value of their most valuable assets - their employees."
PlusHR conducted research across 125 HR professionals, business owners, directors and line managers, from companies ranging in size from 10 to 1000+, examining how effectively individual employee objectives were set and how performance was being managed, identified and rewarded in their organisations.
The study was undertaken by independent market research organisation, Redshift Research, on behalf of plusHR and performance factors.
