Last year, Cornerstone On Demand released a great survey regarding performance management in the workplace. The data clearly reflects what many of our clients encountered as an issue before implementing 7Geese in the organization – their employees are tired of the annual performance appraisals and they want a continuous performance management system focused on helping them achieve their career goals. It is estimated that the cost of employees churning is around $2 trillion in the US for 2012. Putting it into more perspective, it can cost you approximately 250% of the annual salary per exiting employee. It has been estimated that despite the high unemployment rate in the US, 21 million employees plan on changing jobs in the next 12 months.
Employers are trying to be more in tune with their employees, gathering surveys asking for employee engagement and satisfaction. Cornerstone’s survey revealed that when describing their jobs within the 6 months:
– Only 37% said their manager/employer gave them useful feedback
– Only 34% received appropriate training and developing to improve their performance
– Only 32% said that their performance goals are aligned with the organization’s higher level goals.
– And only 20% have established a career path with their manager
Why are these data important? As more companies are listening to their employees and implementing a social form of performance management system, your employees will more likely leave for another company where continuous feedback, regular coaching, and leadership succession are all part of the culture. 50% of employees who go through some sort of performance reviews feel more valued when the session is focused around helping them improve and achieve career goals.
The Cornerstone on Demand suggests creating a more innovative and employee-driven performance management system. We, at 7Geese, definitely agree with this solution. Very often, managers do not know how to conduct a 1:1 performance coaching session. They do not have the proper training, the right questions, or even the appropriate content to have a productive session with their direct reports. Many managers are also stuck in the traditional way of conducting performance appraisals; they talk to their direct report about their achievements for the whole year and then some rate the performance based on what the managers and employees remember. Although I agree that it is a good practice to have a formal meeting with your employees to talk about their year, annual performance appraisals should NOT be the only component of your performance management system.
Annual performance appraisals are dreaded by most employees because they usually do not have an idea on how their performance is being perceived by the managers and their peers and do not have opportunities to improve. A survey conducted by Society of Human Resource Management asked participants what they wanted out of their performance management systems. The top three answers were highly employee-oriented:
– Provide information to employees about perceptions of their performance
– Clarify organizational expectations of employees
– Provide information to employees about their development needs.
I definitely recommend you to read about how Medtronics abandoned performance ratings and how Amplexor has moved towards a more social performance management system with regular coaching sessions and real time feedback. It is time for you to provide what your employees want.Tags: coaching, coaching sessions, effective 1:1 coaching sessions, performance management, performance reviews, productive coaching sessions, social performance management, survey on performance management, traditional performance appraisals