4 Reasons to Invest More in Performance Management This Year
Just because companies are doing away with traditional performance management doesn’t mean they should be cutting back on budget or reallocating spend to somewhere else. In fact, they should be investing even more into performance management. Whether you opt for an annual or monthly review process or are ready to invest in an innovative performance management system for a more fluid feedback model, there’s no denying performance management can be ignored. Take a look at these 4 undeniable reasons to invest more into performance management this year, even if you’re getting rid of your standard system.
Perks Don’t Always Work
It’s not enough to provide flex-working hours or unlimited vacation. While those perks may make your employees happy or satisfied with their job, it definitely doesn’t ensure they’re engaged. What does? Having the resources and tools they need to do their job best. Enticing employees to stay through experiences will only last for so long. If your employees are constantly stressed over a part of their job that could be solved with a new tool, that free lunch you provide every Friday in place of that tool isn’t really going to make them more efficient. Plus, companies with engaged employees outperform those without engaged employees by about 202%.
Tweet This: Reasons to offer a new tool to help alleviate stress for your employees:
Take a look: Are you providing more perks than actual resources and tools needed to make your employees’ jobs less stressful? Swap the perks for a stress-free performance management solution that allows employees to give peer-to-peer feedback to work better together or 360-degree feedback giving them the chance to tell leadership what they actually need to be engaged… and happy.
Regular Feedback Should Be Mandatory
Let’s face it… most employees can and will get off track on long-term goals if they’re only discussed once. With so much discrepancy in performance expectations, clear expectations and metrics have to be defined early and then communicated over and over again. Not because employees aren’t capable of understanding or being responsible, but because these long-term goals or project often evolve. Have you ever had such a great idea, you just HAD to write it down so you wouldn’t forget? What about all of those times you had a great idea but were simply too lazy to write it down and just hoped you’d remember it again? We’ve all done it, but this is pretty much what setting performance goals can be like. If they aren’t continuously evaluated, they run the risk of never getting off the ground.
Tweet This: Are you ruining long-term goals by missing this step:
Take a look: It seems like such a simple concept. But you might be surprised to find out that only 43% of companies have a formal process for setting and tracking goals. This is nuts to us! Investing in a performance management system is all you really need to turn these goals into reality.
Did you know missing a performance appraisal can damage productivity? See how…
Leadership Development is Finally Possible
For years, you’ve identified potential leaders on your team, but unfortunately none of them have ever been able to get to that next level of being ready for a management position. Plus, all of them have such unique leadership skills to bring to the team… but they’re all so different. How would you know if you’re choosing the right leader? A study by CareerBuilder found only one-third of employees aspire to have a leadership role in their company. Who is to say you aren’t looking to promote an employee who doesn’t even want to be a manager? THIS is exactly where performance management comes in. If you don’t sit down on a consistent basis with your team to understand their ambitions, goals and pain points which evolve on a daily basis, then you’ll never have the pulse on your team that you need to make these managerial decisions.
Take a look: It’s quite simple. Not only is identifying leaders possible with a continuous performance management process, but developing them is too. Systems that incorporate employee development initiatives and integrate learning content are the way of the future.
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Employee Turnover Ruins Way More Than You Think
Everyone under the sun knows a high employee turnover rate is bad for the bottom line, but what they may not have realized is how badly it affects compensation strategies. When employees aren’t around long enough to cash in on salary raises, companies turn to organizational-wide incentives like the perks we mentioned above or bonus pay programs to compensate all employees in a more organized fashion. The problem with this is a huge pay misperception happens. Employees will begin to look at their lower wage and not account all of the perks and bonuses into their final annual compensation leaving them dissatisfied with compensation growth in the long run. It’s instilled in us to expect growth in the number on that check over time, and when employees don’t see that number rising… they’re going to bounce.
Tweet This: The problem with large organization-wide incentives like these common perks:
Take a look: PayScale revealed in a recent study that 79% of employees paid above market rate actually believed they were being paid at or below it. Clear up compensation confusion with a performance management system that incorporates compensation data so employees can visualize how their work contributes to the growth of their total income.
Are employee bonuses more important than raises? Learn more…
As we’re right in the middle of a huge transformation in performance management, now is not the time to go crazy and let everything slide out the door. Keep in mind these crucial benefits to performance management and create a process that incorporates aspects of them all.