When we talk with small to mid-sized employers today about the performance review process, we often hear how important it is, but that it needs improvement. Employers offer multiple reasons for why performance reviews don’t work today and acknowledge that moving to something else often requires organizational culture and process changes that may be challenging to make.
The trend in performance management and engagement today brings us away from the long and arduous process of yearly performance reviews, and into a continuous check-in process and an intentionally designed employee engagement experience (view our previous article on the annual review process). With the support of a strong technology solution that includes artificial intelligence (AI), these changes are easier to implement than ever. This article aims to explain the trend and provide a few tips for moving forward.
Many employers still evaluate employee performance once a year. They may have moved to more frequent check-ins with employees, but truly discussing performance, goals, and evaluating progress still happens at review time. While the benefit of the annual review is that there is written documentation and a performance rating to support the request for a salary increase or bonus, we hear a lot of reasons why the performance process needs to change:
Numerous reports confirm that organizations need to change to a more intentionally-designed talent experience to attract and retain employees. According to the 2016 ADP Research Institute’s Employee Engagement Study, 72% of employers “believe performance reviews provide important milestones for development and advancement, but only about half of employees feel the same. Just 15% of employees say they have been given defined development goals for their positions.” Industry analyst and HR expert, Josh Bersin, writes in an article on “talent experience,” “almost 40% of the workforce is independent and the talent issues are evolved: We must compete to find smart people, create transparency and mobility, develop a growth mindset, and build a culture of trust, inclusion, transparency, and fairness.”
Imagine a world in which your employees and managers have a talent experience that increases performance, engagement and helps employees align with your culture and values. This is how it could look:
The change from an annual performance review to a purposeful talent experience doesn’t happen overnight. Technology alone can’t get organizations there, but a strategic plan that includes technology, an employee experience-driven vision, and a strong change management plan can.
Shannon Klick consults with employers on workforce technology solutions.
Shannon Klick consults with employers on workforce technology solutions. She works with employers in all industries and sizes to secure customized workforce technology programs in areas such as payroll, recruiting, benefits enrollment, talent management and compliance. She provides client education, best practice guidance, and project and change management expertise as they review technology solutions in the marketplace. Her goals for employers are to reduce administrative burden and streamline business process through technology, and drive employee engagement.
A recent survey by the Society for Human Resources Management (SHRM) reported 94% of leaders feel employee engagement is an important or very important workforce challenge. An engaged workforce increases operational income by over 19%, while a disengaged workforce can drain over 34% of an organizations’ operational income. Additional risks of low engagement can be seen in increased turnover, low customer satisfaction ratings and even increased employment litigation.
I had the opportunity to speak recently at a Society for Human Resources Management (SHRM) conference where I shared my experience from my former career as a flight attendant. There’s a parallel between my previous office, an airplane, and a more traditional office when thinking about the importance of trust in connecting with and motivating people.
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