If yours is like most businesses today, employee churn is probably a big concern. And your performance review strategy probably isn’t helping.
Over three million Americans change jobs each month, and most employees in the tech sector move to a new company every two years. Even the tech giants can’t hang on to employees for very long. The unfortunate truth is that, when employees advance in their careers, only 7% do so with their current employers.
This is unfortunate because high attrition damages business continuity and is expensive: in the legal world, losing a top performer (i.e. a senior partner) can cost $1 million!
But it’s not all about the money – not for employees anyway. They‘re looking for opportunities to grow and progress in their careers (65% of millennials believe it’s management’s job to offer accelerated development training). It makes sense then, that the key to improving retention is to offer your employees the opportunity to grow and feel motivated, validated and satisfied at work.
Enter the traditional year-end performance review. A great way to ensure that everyone is aligned to your organization’s targets, and a helpful mechanism for evaluating performance when it comes to dishing out their bonuses and annual increases, right?
There’s a whole heap of research saying that almost everyone hates annual performance reviews (and they’re not very effective anyway).
Adobe recently surveyed 1,500 office workers in the United States, asking them what they thought about these reviews. Here’s what they found:
- Reviews are time consuming with little perceived benefit. On average, managers were spending 17 hours per review. Yet, more than half of office workers said that performance reviews have no impact on how they do their job and are a needless HR requirement.
- Ratings and reviews are stress-inducing. Nearly six in ten say performance reviews are stressful, having their performance ranked against peers is upsetting, and their managers play favorites.
- People vote with their feet. As a result of reviews, many people said they cried (22%), looked for another job (37%) or quit (20%). The emerging workforce (millennials) was even more likely to look for another job (47%) or quit (30%). In fact, close to two thirds of millennials would switch to a company that didn’t have reviews even if pay and job level were the same.
- It’s time for a change. More than half of office workers and two thirds of managers wish that their company would get rid of or change its structured performance review process – for millennials that was even higher. When it comes to the ideal process, most people want feedback in the moment.
So, what do employees want?
Real-time feedback rather than an annual performance review
Feedback is essential to job satisfaction. According to PwC, 60% of workers want feedback on a daily or weekly basis. And employees who received strengths feedback had 14.9% less turnover than employees who received none, according to Gallup. Nearly 70% of LinkedIn employees said they would work harder if their efforts were recognized.
Even negative feedback is appreciated. A survey by Zenger and Folkman revealed 92% of respondents agreed that negative feedback, if delivered appropriately, is effective at improving performance.
Ongoing training and development
Great employees want to grow and develop new skills. They want to make themselves as valuable as possible. And they want to know that their development matters to you.
A career development roadmap gives employees something to focus on and work towards, which is highly motivating. It also gives managers something more tangible to discuss with their team members during regular check-ins.
An added benefit is that, as your employees develop and grow, so does your entire organization.
Offer real-time feedback and ongoing development with vi
Real-time feedback is the holy grail of employee performance review management. Our software plugs into your people management platform to create any real-time feedback questionnaire you want and any process you want – fully customized to your organization. We even offer default best practice forms for you to use right out of the box.
We’d love to take you through a short demonstration of our Real-time Feedback solution to show you how to create a better performing, happier workforce. To book a time, just follow the link below and leave your details.