Mercer: only 52% of HR leaders say their performance management works, and just 39% of employees say it helps them grow. 6 fixes to move from managing performance to enabling it.

A Friday question for People leaders and CPOs in Dublin, London, Amsterdam, Stockholm and Tallinn: if you asked your employees today whether your review process helps them grow, what share would say yes? And would your own HR team rate the process higher than they do?

Mercer’s Global Talent Trends 2026 report suggests the answer to the second question is probably yes. Mercer surveyed nearly 12,000 people (9,250 employees, 1,650 HR leaders, 825 C-suite executives and 100 investors) across 16 geographies and 16 industries, online, in September and October 2025, and released the findings on 25 February 2026. Its section on performance is titled bluntly: “Performance management needs a reset.”

1. What the report actually found

In plain language:

• HR itself is split. Only 52% of HR leaders believe their organisation has an effective performance management process.
• Employees rate it lower. 39% believe performance management helps them improve and grow, not just receive a rating. 45% believe it is embedded into culture and day-to-day work. 49% see the process as a valuable experience.
• Career conversations are rare. Only 37% of employees have had a career conversation with their manager in the last 12 months, and only 38% get regular feedback on how their performance and skills impact their career prospects.
• Focus is missing. Under half (43%) agree their manager helps their team focus on the work that matters most. Meanwhile 40% of employees say having a leader who sets clear direction helps them thrive at work, up from 21% in 2024.
• The workforce is tired. 44% of employees say they are thriving at work, down from 66% in 2024. 12% say they are very unsatisfied and plan to leave as soon as they can (4% in 2024), and 26% say they are unsatisfied but feel they have no choice but to stay for the next 12 months (14% in 2024).

Mercer calls the current state “a significant waste of investment and effort” and argues the focus “must shift from enabling process to enabling performance”, connecting employee efforts to business outcomes. Its recommendations include making performance enablement “the foundation of the value exchange strategy, embedding continuous, AI-enabled and growth-focused practices”, and embedding continuous feedback and sentiment analysis into manager dashboards. On the HR side, 52% of HR leaders plan to combine assessment data with other data such as engagement and rewards in the next 12 months, and 49% plan to put assessment insights into the hands of managers and leaders, not just HR.

Honest caveats. Mercer is a consultancy that sells HR advisory, assessment and reward services, so it has a view on what good looks like. The survey is global: the report names 16 geographies without listing them, so none of these figures is a UK, Irish or Dutch number. They are self-reported answers, and the HR and employee groups weren’t asked about the same companies, so the 52% versus 39% comparison is a gap in perception, not a measured gap inside one organisation. It’s a strong signal, not a controlled study.

2. The mid-market hurdle: the process runs, but nobody grows from it

In a 200–600 person company the review cycle usually runs on time. Forms go out, ratings come back, calibration happens. The People team can report a 95% completion rate and still hear in exit interviews that nobody ever talked to them about their next step. That is the gap Mercer is pointing at: the process works for HR, and it doesn’t work for the employee.

The cause is rarely the form. Managers in mid-market companies are often player-coaches with a full workload of their own. Career conversations, feedback linked to the next level and a clear view of what the team should focus on all depend on them, and nothing in a once-a-year cycle prompts them to do it. With thriving down to 44% and more people unhappy but staying, that gap now shows up in productivity, not just in survey scores.

3. 6 fixes to move from managing performance to enabling it

1. Measure the process the way employees experience it. Add two questions to your next pulse survey: “Does our performance process help you improve and grow?” and “Did you have a career conversation with your manager this year?” Compare your answers with Mercer’s 39% and 37%. Run the free performance management health check for the HR side of the picture. In Revolut People: engagement survey results can be compared with performance data on the same platform.
2. Put one career conversation per person on the calendar. Don’t wait for review season. Ask managers to hold one 30-minute career conversation with each direct report this quarter, separate from the rating. In Revolut People: 1:1s sit in the same system as goals, with AI-powered 1:1 summaries, so what was agreed doesn’t disappear after the meeting.
3. Link feedback to the next level, not just the last task. Only 38% of employees get regular feedback on how their performance and skills affect their career prospects. A competency matrix by role and seniority gives managers the words: “here’s what the next level looks like, here’s where you are.” Start with the competency matrix templates. In Revolut People: the scorecard’s Skills section comes from a role competency matrix by seniority, answered by managers on observable behaviours.
4. Help managers point the team at what matters most. Under half of employees say their manager does this. Give every team a small set of ranked goals that cascade from company goals, and review progress monthly. In Revolut People: goals cascade from company to team and individual, and a goal can use Jira as its metric: paste an epic link and progress is calculated from the epic’s child issues, synced daily, with a refresh button.
5. Make feedback part of the week, not the year. Mercer found 45% of employees think performance management is embedded in day-to-day work. Make it easy to give feedback when the work happens, and let the review summarise the year instead of reconstructing it. In Revolut People: anytime feedback and praise are built in, and the review scorecard opens with the person’s goals filled in and previous-cycle data carried forward.
6. Read performance and engagement together before you act. 52% of HR leaders plan to combine assessment data with engagement and reward data. Do it for one department before the next cycle: who is performing but not thriving, and who is thriving but stuck? In Revolut People: engagement, reviews and core HR records sit on one platform, and post-review plans such as promotion roadmaps, PIPs and salary adjustments can be built and triggered from the review.

The PDF goes to your work email. The call is 15 minutes, calendar only.

4. Where Revolut People fits, and where it doesn’t

Revolut People started as the in-house system Revolut uses to run performance. The part that maps to this report is the manager’s side of performance: 1:1s with AI-powered summaries, Goals that cascade and can pull progress from Jira, a Reviews scorecard built on goals, skills by seniority and values, anytime feedback, and engagement surveys whose results can be compared with performance data. Core HR records sit on the same platform, so a People leader can see conversations, goals, reviews and engagement for one team without stitching spreadsheets together.

To be straight about the limits: no tool makes a manager hold a career conversation, and an AI summary is only as good as the conversation behind it. Mercer’s own point is that enablement is a management practice first. Set the expectation, give managers the time and a simple structure, then use software to make it easy and visible. Related reads: McKinsey on ongoing development conversations, Gallup on manager engagement and coaching, and feedback that never sticks.

Bottom Line

Mercer found only 52% of HR leaders think their performance management works, and only 39% of employees say it helps them grow. For a mid-market People team in the UK, Ireland, Benelux, the Nordics or the Baltics, the fix isn’t a new rating scale. It’s the manager conversations around it: one career conversation per person, feedback tied to the next level, a team focused on a few ranked goals, and performance read alongside engagement. Try it with one department before the next cycle.

FAQ

What did Mercer’s Global Talent Trends 2026 report find about performance management?

Mercer surveyed nearly 12,000 people (9,250 employees, 1,650 HR leaders, 825 C-suite executives and 100 investors) across 16 geographies and 16 industries in September–October 2025. Only 52% of HR leaders believe their organisation has an effective performance management process. Among employees, 39% believe performance management helps them improve and grow rather than just receive a rating, 45% believe it is embedded into culture and day-to-day work, and 49% see the process as a valuable experience.

What does Mercer mean by ‘performance enablement’?

Mercer argues the focus must shift “from enabling process to enabling performance”: performance management should connect employee efforts to business outcomes instead of being an HR process. In practice that means regular manager conversations about priorities and careers, feedback that links performance and skills to career prospects, and continuous, growth-focused practices rather than a once-a-year rating.

What did employees say about their managers?

Only 37% of employees had a career conversation with their manager in the last 12 months, only 38% get regular feedback on how their performance and skills impact their career prospects, and under half (43%) agree their manager helps their team focus on the work that matters most. Mercer also reports that 40% of employees say having a leader who sets clear direction helps them thrive at work, up from 21% in 2024.

Is this independent research?

Mercer is a consultancy, not a performance software vendor, but it does sell HR advisory, talent assessment and reward services, and the report recommends approaches it advises on. The survey is global: the report names 16 geographies but doesn’t list them, so there is no UK, Irish or Dutch breakdown in the figures used here. All figures are self-reported survey answers. Ash works for Revolut People, which sells performance management software, so treat the product sections as coming from an interested party.

Is Revolut People available in the UK, Ireland, Benelux, the Nordics and the Baltics?

Yes. Revolut People is available to businesses with a registered entity in the UK, the EEA or the US, which covers Ireland, the Benelux, Nordic and Baltic countries.