Reward and performance management programs are not keeping pace with current business demands and needs, according to a new Towers Perrin study. The study, fourth in a decade-long series of studies on rewards and performance management, is based on a survey of 600 human resource and compensation managers in 21 countries.

Although the majority in the survey said their reward strategies were designed to retain and attract talent, few of the actual tactics were consistent with this focus, the survey finds. Among the trends highlighted in the study: most customized rewards are directed to sales positions, not customer service or research and development; a “disturbing” 68 percent of the respondents said their company had no formal method of measuring the return on their investment in rewards; and over 40 percent said that their performance management systems did not effectively link to business needs, and that their systems did not effectively equip managers to identify, develop and reward high performers or deal with poor performance.