Employee retention is a hot topic these days, and many companies now have some idea of how to track and improve their employees’ satisfaction and loyalty. Unfortunately, despite its plethora of benefits, improved retention isn’t necessarily a cure-all for all of a business’ productivity and profitability issues. To truly see results, you have to make sure you’re retaining the right people.
A strategic approach to performance management ensures just that by going beyond the typical annual review and offering feedback to everyone involved on a regular basis. A well-designed performance management system comprises three levels of interaction between the individual and the company (employee-supervisor, employee-team, and employee-organization) and involves regular manager-employee appraisals and team briefings, both based around mutually agreed upon goals.
Such a system offers managers and upper-level officers constant insight into which employees are a good fit for their position and the company overall, which need some help to get there, and which are likely to be better off elsewhere. This enables supervisors and department heads to allocate educational and mentoring resources efficiently and to reduce unnecessary training costs. It also provides valuable insight into which employees should be let go.
Companies with such systems also have more engaged employees – the key to retention – because they offer a more active management style. As humans, one of our core needs is to know whether or not we’re doing well in the eyes of those around us. Waiting six or 12 months for such feedback can lead to dramatic self-esteem and performance issues. A well-designed and implemented performance management system gives employees the feedback they need on a continual basis, thus ensuring that a) they are motivated to excel and b) they have the tools to get where they want to be.
In short, a strategically designed performance management system offers valuable benefits to all levels of an organization, from individual employees and supervisors to teams, departments, and the organization overall. When conducted correctly, the system ensures a positive workplace environment where employees, teams, and even the company culture thrive.