Despite an understanding that talent is a source of competitive advantage, establishing effective performance management programs remains a challenge for most organizations. According to Mercer’s 2013 Global Performance Management Survey, just 3% of organizations worldwide report their overall performance management system provides exceptional value. In addition to some commonalities in performance management programs, such as setting employee goals, conducting formal year-end review discussions, and using performance ratings, Mercer’s statistical analysis identified key drivers of successful performance management. The key drivers include manager skills, executive commitment, calibration, and technology. Topping the list is the skills of managers, specifically how well they set employee goals, provide feedback, evaluate performance, and link performance to critical talent management decisions such as compensation, development, and careers. According to Mercer’s survey, roughly one in three organizations around the world say improving managers’ ability to have candid dialogue with employees has the greatest impact on overall company performance. Mercer’s analysis revealed that the two components of manager skills that matter the most are linking performance to career development and setting SMART goals (specific, measurable, ambitious but achievable, relevant, and time-bound). To find out more about the survey results, visit www.imercer.com/performance.