Performance Review Aligns Employees To Individual Goals
Often called pay-for-performance (P4P), the concept is to build a culture of top performers by aligning goals, performance, and rewards across an entire organization: Head HR, Skillsoft
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With the advent of technology, HRs in an organization are trying to break the cycle by opting for periodical performance assessment.
Krishna Prasad, Head HR - APAC, Skillsoft plays down the importance of periodical feedback and performance review in an appraisal cycle.
How important is performance appraisal for employees and from an employers’ perspective?
The famous line of Peter F Drucker - "If you can't measure it, you can't improve it" resonates perfectly when it comes to performance appraisal from both employer/employee perspective
- Receive Feedback: It’s an opportunity to receive constructive feedback with reference to his/her job performance on previously established goals and the areas where improvement is required. In short, they get to know where they currently stand.
- Self-Development: Based on the current situation, areas of improvement can be identified, new goals can be set for the employee along with a development (training) plan to reskill & upskill to reach the goals
- Provide Feedback: Employees get a chance to openly speak about the job performance, challenges they face and give feedback to their supervisors. It helps them feel heard, valued, builds trust and improves two-way communication
- Employee Recognition & Rewards: Best performers get better pay, bonus and other benefits
- Assess Talent Status: It is easy to identify the under-performers and decide whether you want to retain & train them to improve the performance or let them go.
- Increase Engagement: Employees who receive a development plan and support from management have a high sense of engagement and in turn leads to increased productivity and higher retention rates.
- Assess Recruitment Needs: The overall statistics from the appraisals can be used to evaluate, monitor the success of the organization’s recruitment and induction practices.
- Assess the Overall Training Needs: Organizations can assess individuals and departments’ weaknesses then identify areas which may require additional training and support
What is the process of periodical feedback? Will more organizations follow suit and move towards a merit-based salary program in the coming years?
In today’s app-based world, every transaction seeks for a feedback/rating instantly and the same is getting replicated at work. Performance Management is here to stay, the method of constant and continuous feedback is changing”
Mercer’s 2017 Global report reveals that 88 percent of companies not only made changes to their performance management process in 2016, they expect more to follow. 81 percent reported that they already have an “anytime feedback” tool in place.
The Mercer report also highlights another interesting statistic – 97 percent of employees say they want to be rewarded and recognized for a wide range of contributions and not for financial or activity metrics alone.
Best-in-class organizations focus on a performance-driven rewards system that compensates individual contributors directly proportionate to what they achieve and what they contribute to the bottom-line. It has been seen that programs that align employees’ compensation – merit increases, bonuses, long-term incentives – to their performance have proven to be very effective in driving actual performance.
Often called pay-for-performance (P4P), the concept is to build a culture of top performers by aligning goals, performance, and rewards across an entire organization. Motivating, rewarding, and retaining top performers is a key business objective for any company that seeks to successfully maintain or exceed growth expectations.
How does the periodical assessment replacing annual review helps the organization play a role in building individual careers?
The annual performance review process is evolving. Many are moving away from the high-stakes ratings and annual conversations and making the overall process more user-friendly for managers and employees. A regular feedback cycle between managers and employees results in timely corrections to behaviors, improved and ongoing development, and a better manager and employee relationship. It also enables organizations to reinforce what’s expected from employees if they’re to support the company’s goals.
Employees don’t plan to stay forever in their current positions and instead want to progress and take on more responsibility through promotions and career advancement. A well-structured periodic assessment gives organizations a valuable opportunity to support those employees eager for greater challenges.
Then managers identify their team members’ career goals and plan for future career development opportunities, such as additional training, extension courses or new projects, it leads to more engaged teams. Thus, periodical assessment, in turn, benefits the business, as it enhances employee loyalty, engagement, and productivity.
How does the performance review coupled with technology help organizations to lower the attrition rate?
As organizations have begun to incorporate periodical performance reviews, they have started to rely on technology to seamlessly undertake these processes. Learning management systems are put in place to record and track each employees’ goals as the data is stored in an accessible place. This helps the employee to refer to his/her goals online whenever required. This helps to keep the goals up to date and clearly reflect on the progress and development of each employee. In turn, the employees get to see a clear-cut path, feel motivated, engaged and excited about their career path thereby continuing their association with the organization. The same technology is accessible 24/7 via mobile phones, capturing real-time data that is linked to specific goals and competencies/projects from multiple sources.
HR technology empowers managers and employees to stay aligned with rapid changes in corporate strategic objectives due to the pace of digital transformation and competition. Best-in-class organizations use HR technology for performance conversations when it comes time to award pay and promotions.
What is the optimal outcome for periodical performance management?
- Creates a high-performance culture with more engaged employees who stay with the company longer
- The result of more frequent communication is the ability to address, in real-time, performance areas that can be improved, measured and developed if skill gaps exist.
- Real-time, continuous feedback encourages collaboration, gives development discussions more meaning and provides a process for giving and requesting targeted feedback.
- Employees are looking for growth and providing continuous feedback to them helps retain high performers by giving them dedicated career development plans.