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5 Ways Performance Management Can Lead to Unmanageable Costs

In a December 2023 updated report, Ernst & Young (EY) found the average cost per manual data entry made by an HR professional increased to $4.78. Read about EY’s latest findings for more information.


Performance management. It sounds like just another set of tasks on an HR professional’s to-do list. Which it is.

But did you know each of those HR tasks has a cost attached?

Ernst & Young recently conducted comprehensive research to determine costs associated with 41 common HR tasks and found performance-management functions are among the most costly to complete. Why?

Managing many moving parts

Managing employee performance is one of the more common and frequent functions for HR, and requires several tasks that can become very time-consuming:

Computer graphics

For many companies, these tasks require the input and approval of multiple parties, resulting in either an arduous sign-off process that preserves a paper trail of approvals, or a slightly speedier routing of personnel management that sacrifices verifiability for swiftness.

Without a comprehensive HR application, those are your two options — neither of which is satisfactory.

The price of inefficiency

Either way, inefficient and inaccurate documentation creates a burden of work that’s both unnecessary and pricey.

For example, recording, tracking and storing performance-review documentation costs, on average, $15.51 each time it has to be done — for each employee. If you’re a company of 1,000 employees, and you only do performance reviews once per year, you’re still paying $15,510 a year simply to keep track of those reviews — never mind the time and labor cost of sending those reviews through the approval process manually.

And that’s just one of those five aforementioned functions. When you factor in the other four, a 1,000-employee company is looking at a price tag of over $250,000.

Learn how it all breaks down by downloading our free white paper, Minimize Avoidable Labor Costs While Increasing Efficiency Companywide.