Results of the 2025 Canada Mercer QuickPulseTM Survey: Performance Management Edition
In June of 2025, just under 250 Canadian companies participated in the latest Mercer QuickPulseTM Survey focused on performance management. They responded to questions related to:
- Goal setting
- Performance ratings
- Administration
- Other mechanics of performance management
See what Canadian employers had to say about the current state of their performance management plans.
Plan design
Most employers have one performance management plan for all employees. If they do have a segmented approach, it’s typically for executives, sales, or manufacturing/production roles.
Goal setting
Eighty percent of employers have a formal goal-setting process and most use their HRIS system to facilitate the process. They do provide guidance for setting SMART1 goals and most employers allow employees to update their goals throughout the year.
Performance Ratings
Canadian employers rely on their managers to use their discretion to assign performance ratings. Slightly more Canadian companies than US companies reported using a forced performance rating distribution – 15% versus 8% in the US. Additional monetary awards is the most common mechanism that employers use to recognize their “superstars” (i.e., the highest performers).
Linking ratings to pay
When asked if they use performance ratings to determine annual increases and/or incentive payouts, the majority of employers indicated that they allow manager discretion with some level of alignment to set guidelines. Twelve percent of employers said they do not use performance ratings to determine merit increase or incentive payouts.
Performance management in action
As I’m sure most HR professionals and consultants know, performance management is ideally an on-going activity conducted throughout the year, with managers communicating with employees regularly and specifically discussing performance against goals and objectives. In Canada, it seems that formal performance discussions are most often occurring annually (49% of employers) and bi-annually (40% of employers).
Challenges
When asked what their biggest challenge with performance management is today, Canadian employers provided a variety of answers, but they all seemed to fall into these broader categories:
- Lack of a consistent performance management framework
- Inconsistent implementation and calibration
- Limited leadership engagement and buy-in
- Technological limitations and manual processes
- Cultural and behavioral barriers
Up next
How does your organization’s performance management program stack up? Perhaps now is the time to assess how well it supports your culture and talent strategy. Mercer has colleagues ready to guide you through the process and provide an industry perspective, as well as offer insights into emerging trends in performance management.
Soon we’ll be releasing the next edition of the Compensation Planning Survey with a first look at what employers are budgeting for annual increases, promotions, and salary structure adjustments for 2026. Participants in Mercer’s QuickPulseTM Surveys receive the results free of charge. Be sure to sign up to receive a notification when the next survey opens for participation.
Connect with one of our knowledgeable consultants at 855-286-5302 or surveys@Mercer.com.