Are your employees engaged? Yes. No. Maybe?
According to the State of the Global Workforce, worldwide employee engagement is sitting at a meagre 15%. South Africa is just above the global average at 17% but when compared to the USA and Canada at 31% we are still relatively far behind.
With that in mind, if your answer is no, maybe or even yes, do you know the cost of a disengaged employee to your company? The answer is, that whatever your engagement levels are, actively disengaged employees will cost you roughly 34% of their salary.
That’s a very high price to pay considering that 83% of working South Africans are not engaged or actively disengaged. Plus the South African economy is currently in a recession.
The question is…
Is there a way to improve workforce performance and drive engagement?
Simply put, yes there is.
The performance management process and employee engagement have a very symbiotic relationship. Productivity is a result of engagement but it also works the other way around. Effective performance management can go a long way in improving employee engagement and job satisfaction.
Before we dive into the ways in which performance management can empower employees, let's make sure we understand what we mean by performance management.
Performance management is no longer an annual performance review. Business leaders are revamping their practices to develop opportunities to:
Establish clear expectations
Provide continual coaching
When performance becomes focused on these core principles, manager-employee interactions and discussions feel encouraging, purposeful and rewarding in ways that annual reviews do not. Creating a culture of performance development around this cadence of core principles also helps employees better own their performance, development and career.
Establish clear expectations
Also known as the achievement phase, establishing clear expectations and following up with goal setting is essential when trying to inspire high performance.
The clearer the employee understands what is expected of them, the more likely and enabled they will be to meet those expectations.
This is best done on day one when a new staff member joins the team. Although, it can be done retrospectively with existing employees. In the initial meeting make sure you review:
the employee's job description
clarify their responsibilities
explain how they will be measured and evaluated
discuss reporting standards
ensure they understand the company's culture and values.
Next, translate those expectations into goals.
Goal setting helps provide a clear destination, a firm target for employees to aim for. The use of SMART goals (specific, measurable, actionable, results orientated and time-bound) help remove ambiguity from any expectations set.
It is important to remember that the purpose of goals is to help employees improve. With that said, it makes sense to include them in the entire process. The likelihood that they will reach their goals increases drastically if the employee actually buys-in to the goals they are being asked to achieve.
By including them in the process, individuals gain a sense of ownership and can be encouraged to be ambitious with their target. It is also a great motivator for their ongoing personal development.
Finally, as a manager, you need to help your team tie their goals back to the company's success. A recent Gallup study showed that employees who could link their goals to the success of their organization were 3.5 times more likely to be engaged. Uniting employees through a shared purpose, drives increased levels of engagement.
A majority of the criticism around performance management has been aimed squarely at the heart of the annual review.
And for good reason.
Managers have leaned too heavily on the annual performance appraisal as an opportunity to provide employees with feedback.
The amount of feedback managers give employees is startlingly low, with only 7% of employees receiving feedback daily and 19% weekly.
The issue with this lack of feedback and its effect on performance, is that performance happens every day. Continual coaching helps managers and employees create an open dialogue about their performance expectations and the employees' developmental needs.
An open dialogue between managers and employees is immensely beneficial. Conversations around performance, any barriers, and possible opportunities can be acted on when circumstances change.
Additionally, continual coaching helps foster trust and open communication between managers and employees that cannot be established in more formal meetings.
Effecting coaching is not simply about communicating frequently but also about the types of conversations. There is a time and a place for everything and coaching is no different.
Good coaches learn that there are strategic times and places to talk about workload, strategising how to achieve specific goals, giving feedback about performance, proactively anticipating future opportunities and building relationships.
According to Gallup, there are three key principles that define effective coaching conversations:
Frequent - The most effective managers globally interact with their team daily using a variety of communication means including email, phone calls, hallway conversations and videoconferences.
Focused - With this amount of ongoing coaching it is easy to lose focus and over-complicate matters which ultimately has a negative effect on employees. It is critical that managers are intentional and clear when assigning tasks and setting priorities.
Future-oriented - It is important not to dwell on the past. Conversations focused on past poor performance or mistakes come across as critical and can demotivate employees. Rather stay focused on up and coming opportunities to use what was learnt before to improve.
Accountability is the final piece in the performance management puzzle.
Without accountability, establishing expectations and continual coaching are just talk.
Accountability ensures that managers and employees take time to evaluate progress, look at any lessons learned and plan for the future.
Traditionally this is where most managers would turn to the annual employee performance review.
The sad truth is that this top-down approach always focused on bettering the company and not the employee. The aim was to get rid of the bottom performers and reward the stars with more money or a promotion.
Only 14% of employees strongly agree that the performance reviews they receive inspire them to improve.
Usually, the only thing that the employee benefitted from was knowing what their bonus and raise were going to be.
In 2016 a McKinsey report found that companies like GE and Adobe were working on changing this. More frequent discussions with employees around performance and coaching. In place of backwards-looking ratings and rankings.
Interestingly, employees who strongly agree that their manager holds them accountable for their performance are 2.5 times more likely to be engaged.
Although managers have leaned too heavily on the annual performance review in the past, employees must still be held accountable. Which means that there is still space for a performance review in the modern workplace.
So, what does that mean?
Well, progress reviews need to evolve into more than just high-level metrics and correcting issues. A performance review should create an opportunity for managers and employees to start on a clean slate. Prioritise tasks collaboratively, update any goals and expectations previously set, and ensure they have what they need to do their best work and grow.
To help transform the outdated annual performance review into a more constructive progress review managers should make them:
Achievements-orientated - Start off by celebrating any success the employee has had and understand how they achieved that success.
“19% of employees strongly agree that their manager recently reviewed their greatest successes, and those who do strongly agree are 3.8 times more likely to be engaged.”
Fair and accurate - Traditionally performance review data has seemed unfair and outdated. Improving the fairness and accuracy of progress reviews begins with measuring and discussing metrics more often (quarterly or semi-annually).
Developmental - Managers must be responsible for helping employees identify and meet their developmental and performance goals. Both of these influence employees’ engagement, and are major factors in determining their personal and professional success.
It is clear that by redefining the performance management system, managers can transform disengaged employees into highly engaged team members. This shift needs to make the employee the centre of the process and focus helping them do their best work.
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