- Publish date
- Apr 12, 2022
If you are a business leader or an HR professional, you would know that standard processes like employee performance reviews are often underestimated as reactive, time-consuming, pointless, and box-ticking activities without any value addition to a company.
However, this is a misguided perception of performance reviews.
Constructive feedback is essential to employees' development and organization planning in the current corporate world. Regular feedback can triple the chances of employee engagement, build confidence, clarify expectations and provide opportunities for employees to learn from their performance.
Annual performance reviews shouldn't be the only time you tell your team what has been working or not. According to statistics, 96% of employees state that they would like to get performance feedback regularly. From top under-performers to the best ones and everything in between, your employees need specific, timely, and helpful performance feedback to attain their full potential.
Besides, it takes more than a salary raise to retain your staff and keep them from leaving.
This is a far more practical and productive exercise than simply trying to fill gaps created by poor performances. You need to let employees know their strengths and weaknesses as this helps them develop and makes them feel valued and supported.
All these sound good in theory, but how can business leaders achieve this?
- The first step is to focus on creating proactive performance monitoring instead of making it reactive. Begin by taking feedback and performance data early and regularly to give way for timely improvement action.
- Disconnect the process from the box-ticking annual review to a lighter and more frequent feedback exercise for better outcomes.
- When asking for feedback, it's best to structure questions such that both weaknesses and strengths are well captured.
Otherwise, a well-structured performance review has the following benefits:
1. Increases Retention Rates
Employees who get regular feedback on their work turn over 14.9% less compared to those who don't receive feedback.
Retaining top talent is vital to a company's growth and success, but it is often a big challenge. Ensuring that your staff feels invested, productive, and appreciated is the best way to make them choose to stay in your company.
So committing to frequent feedback increases employee performance and reduces employee turnover rate, further minimizing expenses and costs of new hires while adding to business profitability.
2. Improves Workplace Relationship
Frequent performance monitoring establishes trust between managers and staff. A survey by Harvard Business Review reported that only 42% of people trust their bosses, while 58% trust strangers.
Working in a position that needs you to oversee the work produced by the team can keep you from direct and regular interactions with your employees. Reviewing your employees' performance gives you time to have in-depth discussions with each team member, offering opportunities to build good relationships with them. You can give praise and rewards for hard work, offer constructive criticisms, and listen to questions, complaints, or concerns each team member has so they feel more open to receiving and giving feedback. Furthermore, it can also increase retention rates.
3. Career and Personal Development
Performance reviews monitor employees' work, allowing them to discover their points of weakness and strengths. This promotes personal growth as employees will use the feedback to try and enhance their strengths and overcome weaknesses. As a result, they will improve their performance while gaining new work skills and experience.
These appraisals also encourage managers and supervisors to design training programs that provide career and personal growth and development opportunities.
4. Identify Training Needs
New employees often go through various training when just hired. However, learning should never stop once the onboarding process is complete. Your employees will likely benefit from additional training at different points during their work tenure at the company. Companies can use performance review data to identify areas that need training and design suitable programs for each employee.
Continuous workplace learning helps to improve employees' skills and boost their chances of getting promoted to higher positions in the company. Regular appraisals may also help managers spot areas where new employees should have more training or seasoned employees be given refreshers. They can also be used to monitor the effectiveness of the training program by comparing employees' performance before and after implementation.
5. Enhances Employee Engagement
The Engagement Institute 2017 study found that lack of employee engagement costs businesses between $450-$550 billion in a year.
One of the primary benefits of regular performance reviews is increasing employee engagement leading to better dividends for the company. Various studies have shown a correlation between engagement and retention, quality, profit, service, sales, and returns.
Additionally, reports show that managers are at least 70% responsible for their employee engagement. Managers who communicate feedback regularly enhance employee engagement three times more than those who don't. Therefore, employee reviews should happen more frequently to increase engagement, reduce employee turnover and enhance productivity.
Involving employees in a regular appraisal can enhance engagement and motivation to stay loyal to the company longer. Employees also gain a better understanding of how their roles and responsibilities contribute to the company's growth, making them more invested and committed to the outcome.
6. Promotes Good Communication
Talking to your staff about their work and discussing any problems or weaknesses while helping them find solutions can promote a culture of effective, open communication.
For any business, open communication between managers and employees is very crucial. Create discussions that add value and make your staff feel supported. Ensure your reviews give your staff the best chance to develop themselves and rise in the positions. Having an open and honest approach during the process further builds a company culture where team members feel validated and listened to.
7. Improves Employee performance
Positive feedback and criticism have the power to motivate employees to perform better. Employees are often encouraged to work harder when leaders share details about what's working and what's not. In addition, because managers often use performance reviews to determine who or how to give some employee benefits and bonuses, the appraisals can give employees the push to work harder for incentives and rewards.
Taking the time to monitor and analyze your staff-produced work is a perfect way to spot areas that need attention and improvement. Exploring issues and offering solutions is an excellent way to help employees improve.
Buchanan Tech Can Help You With Employee Retention
When companies structure performance monitoring and regular feedback and use this as a vital tool to strategically align teams and goals, performance review exercises become more than an unproductive valueless pile of paperwork. An actual performance review strategy can make a just-performing business thrive. After all, employees performance is what generates returns in your operation.
At Buchanan Tech, we provide businesses with growth potential to compete for top tech talent and, more significantly, retain the talent these companies already have. If you want to hear what it takes to attract a dream team and also ensure they stay, contact us to get a free retention audit and see what you need to do to improve your workplace for better employee retention.