Workscape Expands Workforce Management Product Line with Acquisition of Performaworks.

Business Editors/High-Tech Writers

FRAMINGHAM, Mass.--(BUSINESS WIRE)--March 4, 2004

Workscape, Inc.

-- Integration of Employee Performance Management Suite with

Workscape's Award-Winning Enterprise Compensation Management

Application to Create the Industry's Strongest, Most

Configurable "Pay for Performance" Solution

Workscape, Inc., a proven provider of benefits and workforce management solutions, today announced that it has acquired the business of Performaworks, Inc., a leading developer of Goal-Driven Performance Management(TM) software based in Burlington, Mass. The acquisition unites Workscape's award-winning enterprise compensation management solution with Performaworks' leading products for employee performance management under the OneForce(TM) product family. The combined offering results in a highly adaptive and configurable "pay for performance" solution that is designed to be used by employees and managers, is built to handle both the complexity and the scale required by large enterprises, and is available in both licensed and hosted deployment options. Financial terms of the transaction were not disclosed.

"In order to realize the highest possible levels of workforce performance, and deliver increased shareholder value, companies must improve their ability to successfully align corporate business goals, employee performance, and employee compensation," said Tim Clifford, president and CEO of Workscape. "As a result, more and more HR executives are placing 'pay-for-performance' technologies at the top of their priority list. Performaworks has evolved into a prominent industry player by helping their blue-chip customer base transform the performance management process from a once-a-year administrative nightmare, to an ongoing strategic process that is embraced by employees, managers, HR professionals and senior executives alike. By combining our respective strengths in compensation and performance management, Workscape and Performaworks can help our customers drive enhanced workforce performance and achieve the business goals most critical to their success."

"When compensation and performance management are effectively linked, organizations will reap the benefits of a measurable, performance-based human capital management strategy. This allows them to set employee performance expectations and incentives that are clearly aligned with the company's larger business objectives, assess and develop employees based on these expectations, and then link that performance data directly into the compensation planning and review cycle to ensure employees are appropriately recognized and rewarded," said Paul Schaut, president and CEO of Performaworks. "The combination of Performaworks and Workscape will deliver an integrated experience for managers and HR professionals, and provide great visibility for employees."

Workscape's purchase of the Performaworks solutions marks its third acquisition in less than a year, following the Company's purchase of the operating assets of CallConnect in August 2003 and TALX Corporation's benefits line of business in April 2003. The Performaworks acquisition expands Workscape's workforce management product line with a comprehensive HR technology solution enabling companies to:

-- Implement a consistent performance management process across

the enterprise;

-- Streamline employee performance assessments and evaluations;

-- Use accurate and relevant employee performance measurements to

drive compensation decisions;

-- Align the entire organization with the strategic goals of the

company; and

-- Identify and develop key employee talent.

"Our research indicates significantly increased market demand for more holistic, performance-driven compensation systems," said Ron Hanscome, senior program director, META Group. "Total compensation represents more than 60% of total corporate expenditures, and most Global 2000 firms are not fully leveraging their compensation investment due to antiquated pay programs that do not properly reward high-performing workers. With optimal resource utilization being a major concern in an uncertain economy, organizations should now look to realize increased return on their people-related spending with the implementation of solutions that successfully link compensation with employee performance."

Industry data adds further support for both the short- and long-term benefits of effective performance management strategies and their crucial link to compensation. Human resources consulting firm Watson Wyatt Worldwide reported in its 2002 Human Capital Index report that organizations with clear rewards and accountability -- the successful results of integrating ongoing, goal-driven performance management and compensation management -- typically realize a 16.5 to 21.5 percent increase in shareholder value. Overall, companies with superior human capital practices can create more than double the shareholder value than companies with only average human capital practices.

According to David Link, Vice President, HR Transformation for The Cedar Group, "Organizations that implement solutions such as performance management and compensation planning reap the competitive benefits of meeting and exceeding business goals. Our 2003 Workforce Technologies Survey found that these HR systems typically provide a return on investment within two years, and enable organizations to trim transaction costs by an average of 43 percent."

The existing Performaworks performance management and assessment products will be marketed as OneForce/Performance. Additional modules for multi-source (360(degree)) assessment, goal alignment, competency management and development planning are also available. In addition, the recently announced Performaworks Succession Management(TM) application will be re-branded as OneForce/Succession and is available as both an integral component of OneForce/Performance or as an independent product. All of the Performaworks products will be available from Workscape in both hosted and licensed deployment options.

Performaworks' current President and CEO Paul Schaut will join Workscape in a new role as Executive Vice President, Workforce Management Strategy and Development.

About Performaworks, Inc.

Performaworks, Inc. is a leading developer of Goal-Driven Performance Management software. Performaworks' software enables large enterprises to gain competitive advantage by better executing their strategy through alignment of employees' goals with corporate goals. Performaworks' solutions track progress towards objectives, helping global companies to course-correct more effectively and faster than their competition. The resulting database of assigned goals and progress drives a comprehensive performance management process that recognizes those employees that contribute most to strategic corporate objectives. For more information, please visit the Performaworks Web site at www.performaworks.com.

About Workscape

Designed for the workforce, Workscape's solutions transform the delivery and adoption of HR services across the enterprise to enable a higher-performing organization. An innovator in HR self-service, Workscape provides a full range of online benefits and workforce management applications including employee self-service, manager self-service, compensation planning, performance management and outsourced benefits administration, as well as an employee portal. Workscape's applications and services are configurable to support each client's unique business processes, easily integrated into multi-vendor environments to ensure protection of existing technology investments, and are available in multiple deployment options to enable rapid implementation and ROI. Workscape's award-winning solutions have been embraced by millions of employees worldwide at more than 180 major corporations. For more information, visit the company Web site at www.workscape.com or call [phone].

Note to Editors: Workscape is a registered trademark, and OneForce is a trademark of Workscape, Inc. in the United States and other countries. Performaworks is a registered trademark, and Succession Management and Goal-Driven Performance Management are trademarks of Performaworks, Inc. in the United States and other countries. All other trademarks are the property of their respective owners.