3 Performance Management Transformations that Help You Win the War for Talent
Millennials and gen Z have begun to populate the workforce. Unlike baby boomers, they switch companies if they do not see growth and development. Consequently, the work-for-pay approach has become outdated and more importance is given to self-development. In order to win the war for talent, a company should be updated with recent techniques.
An organization confronts many challenges when it transforms its performance management system from the traditional method to agile, faster, and lighter technology. But the transformation is inevitable to retain the smarter tech-savvy millennial and gen Z workforce. Deloitte’s research reveals that organizations are more focused on implementing agile developmental management approaches to retain the workforce.
The traditional performance management system consumes a lot of time and effort but delivers no results. The business needs change often, and one traditional system cannot cater to all business needs. As business requirements change, companies should change their systems accordingly. A Mercer’s 2019 global performance study imparts that only 2% of companies say that their performance management system delivers results.
Research by Global Human Capital Trends suggests that 82% of companies report that their performance evaluations are not worth the time. Another study states that the performance evaluation method of 45% of companies did not motivate employees.
To win this war for talent, three performance management transformations should take place.
Set Specific, Measurable, Achievable, Relevant, and Timely Goals
Goal setting is an indispensable strategy of a successful organization. SMART goals should be set by organizations to achieve success. SMART goals and OKR give the employees a sense of direction, purpose, and motivation. The companies should cast off yearly once goal-setting approaches and set goals according to business needs. To set goals effectively, you must decide the key results for the quarter and determine the objectives.
The workforce should possess the mindset to embrace the redesign in the performance management system which includes goal setting too. Now, the baby boomers would be in authority in many organizations. They should endorse the changing work culture and system to retain the millennials and gen X.
Continuous Feedback Allows Transparency – Know-How
Trust is important between the management and the employees. To gain the trust of employees, the management should adopt transparent performance evaluation. Continuous feedback and 360 degree feedback helps you to achieve it. Continuous feedback keeps the record of your achievements, and 360 degree feedback ensures fair evaluation without manager bias.
A study suggests that 41% of companies experience manager bias and 65% of companies feel that the communication between the managers and employees should improve. The managers are not trained to handle teams. The organizations should focus on training managers to deliver feedback effectively to fill the gaps in performance. In turn, employees get opportunities to learn and upgrade their skills.
Only 2% of companies have a feedback-rich culture. The feedback culture should be implemented successfully, and the results should be recorded for further growth.
Ratings Should not be Removed from Performance management – Know Why
A study reveals that 15% of companies have eliminated ratings from their performance evaluation system. Removing ratings, which is the cornerstone of modern performance management, can confuse your employees. They may not understand the decisions taken by the company. This nontransparent process leads to nepotism.
Employees learn about their contribution through ratings, and feedback allows them to learn their strengths and weaknesses and ways to improve themselves. Feedback rich culture and evaluation through ratings are two different needed zones for a successful performance management system.