Employee engagement is a top priority for organizations today. However, according to a Gallup study, 8 out of 10 employees feel performance reviews do not work. At the same time, 82 percent of managers agree that performance management is ineffective in achieving its primary objective, according to Gartner.
So, how do you create a high-performing culture?
It starts with setting clear expectations and holding employees accountable to those expectations through a process called performance management. By driving employee engagement through performance management, you can create a culture of high performers who are committed to your organization’s success.
The Link Between Employee Engagement and Performance Management
There is often a misconception that employee engagement and performance management are separate things, but they interconnect. Gallup defines employee engagement as “the involvement and enthusiasm of employees in their work and workplace.” When employees are engaged, proficiency and productivity go up. Conversely, when employees are disengaged, the most comprehensive performance management system will fail because people are less likely to care.
As a result, organizations need a performance management system to set clear goals and expectations and keep employees accountable for those goals. This helps increase employee engagement at the workplace and contributes to improving performance. The benefits of performance management go both ways. Not only does the review and feedback process improve performance, but being coached and receiving positive feedback can increase employee engagement.
When implementing a performance management system, there is a critical intersection to consider. That is, how do you manage the transition from a performance-based organization to one that is based on engagement?
New Approach to Performance Evaluations
For many years, performance evaluation has been a black box. Often, management’s judgment on an employee’s performance was based on their individual’s past performance or job requirements. Management learned about your employee’s performance during their time with the company, collected data on how the employee performed, and then decided whether the employee met expectations.
With the rise of social media and the transparency movement, being ‘successful’ now means being different from how you were successful before. A new generation of leaders thinks about their success in terms of their impact on the world and the people around them. They measure their success not just by their performance but also by how they perform compared to others.
As a result, management’s focus has changed. Prioritizing performance evaluation over engagement, companies have begun assessing how employees interact with each other and customers. Pay parity/pay ratio, job design, career development, and feedback and criticism were significantly linked to employee performance. Overall, the five drivers of employee engagement are equally crucial to employee performance. When an organization designs its performance management program around these drivers, they create a system that drives engagement and performance. Some companies have also started to talk about their employees regarding their impact on the company as a whole and the total impact of their work. At the same time, others are enforcing an ongoing performance management cycle.
Key steps to design highly effective performance management
The key steps to designing highly effective performance management must include the following:
Set clear goals and objectives:
A good system will set realistic goals based on what is required to succeed in a given role. If the goals are too difficult to achieve, the employee will become demotivated and may leave the company. If they are too easy, the employee will feel like they are not being challenged and may become dissatisfied. Goal setting is crucial. You can ready more about the importance of setting clear and achievable goals in an organization.
Aim for feedback:
Listen to your employees and set aside time to give regular feedback. This can help keep employees on track and aware of any problems in their performance. Ideally, this should be in the form of coaching and open, constructive criticism. According to Gallup, “employees who receive daily feedback from their manager are 3X more likely to be engaged than those who receive feedback once a year or less”.
Remember your metrics. This should not be — and never should have been — about numbers alone. Performance evaluations are more than just completed tasks.
Help your employees grow:
Value your employees and help them grow and develop at your company. This should include encouraging training and development relevant to the role and the company’s ambitions. Identify opportunities and provide career guidance to help employees think about their long-term careers at the company. This should include encouraging them to develop goals for their time at the company that aligns with its goals. This is an excellent system to manage underperformers and identify appropriate training or coaching to help them grow.
Key Players Involved in Managing Performance
There are several key players involved in managing performance. Some are responsible for evaluating employee performance, while others play a supporting role.
The top management team is responsible for the overall direction of the company. This includes defining key priorities, monitoring performance, and setting goals.
The Business leader/Directors are responsible for seeing that the goals set forth by the top management team are met. They work with other leaders in the company and their teams to set achievable goals.
Managers are instrumental in setting the daily goals of their team members. They also closely monitor the team’s performance and provide suggestions for improvement.
While most of the performance management process focuses on the leader/director and their team, it’s important to remember that it is a two-way street. The team member also plays an essential role in his performance. They can do this by reaching out to their manager for guidance and suggestions, as well as by being a team player and helping others in the group achieve their goals.
Finally, technology is the ultimate tool that ties all the players together. A performance management tool, like UpRaise app for Employee Success, provides real-time coaching, feedback, and performance reviews – without having to look through extensive spreadsheets or manually curating information.
As more companies move towards digital transformation, they’ll need more people to drive that change. Effective employee engagement strategies will help companies to retain the employees they need to succeed. Although it may be challenging, driving employee engagement through performance management is essential for any organization that wants to achieve success. By setting clear goals and expectations, providing feedback regularly, and offering opportunities, you can create an environment where employees are motivated to do their best work. Here are our top 10 employee engagement trends for 2022 to help you understand your employees better.