So, let’s start with: What Do Your High Potentials Expect from You? 1. To be part of the company vision, mission, and goals 2. To receive continuous and meaningful feedback 3. To be challenged 4. To be rewarded for great work 5. To understand their options for growth and promotion
Well, doesn’t every employee want this from their employer? Over the past few years, some companies have decided to totally forego performance reviews. So, how do companies gather this data into one platform to accomplish the 5 expectations of high performers?
There is one thing that employees and managers seem to agree upon, they dislike administering and receiving the dreaded annual reviews. Without an effective form of measurement, a performance review, you can’t easily identify your top performers. According to SHRM, The Society for Human Resource Management, nine out of 10 companies they surveyed reported using annual or semi-annual reviews-but only three out of 10 believed they did them any good.
“In August 2015, GE reportedly decided to scrap formal annual reviews for its 300,000 employees entirely, replacing the evaluation with more frequent conversations and introducing an app to help managers and their employees share feedback.”
“In July 2015, Accenture, one of the largest consulting companies in the world, announced it was shedding annual performance reviews in favor of a system in which employees receive timely feedback from their managers immediately following assignments.”
Okay, so what do these Fortune 500 businesses know that the rest of us don’t? We all hate the annual performance review, from small service organizations to mid-sized manufacturing, so should we all stop measuring performance; or is this a problem unique to only the guerilla companies?
What Accenture, GE, Microsoft and other large companies have found out is, in addition to the dread, the traditional annual review is outdated and ineffective. It doesn’t communicate company goals and vision. It doesn’t create greater engagement. It doesn’t provide constant feedback and coaching and it DOES NOT recognize and retain your top performers. This revolutionary change in the performance management world can be experienced by any company…. small, medium and enterprise size. Here’s how your company can keep your top performers by using a solid review process:
1. Share your company’s vision, mission and goals
The revolutionary change in performance reviews includes taking the strategic goals from the corporate boardroom and sharing them with everyone in the company. Break the “cardinal rule” and tell “everyone” in the company what needs to be done to be successful and profitable, no more secrets.
Schedule an All Staff Meeting. Remember the mission and vision statement that is in your company handbook? Share it over and over again with your employees. Then sit down with your managers and talk about how those strategic goals affect every area in the company.
If you have ever worked for a non-profit organization, you probably made the worse money of your career, but have never again felt that same sense of purpose. Non-profits are driven by their mission, their vision and their goals to “make a difference.” They have frequent meetings about making their numbers because not achieving them could mean a total loss of funding. Do you ever wonder how people can dedicate themselves to the non-profit arena for years? Its because the mission, vision and goals are shared often, sometimes at the end of very day. They are 100% connected and vested in the journey.
Top performers like being in the driver’s seat, so give them some goals they can drive. Access to information, especially milestones the company needs to achieve, is access to power…. the power to win the race. High Performers also have a keen sense of business acumen. Although high performers are not all millennials, “By 2020 millennials will make up 46% of the workforce” (Maximizing Millennials in the Workplace, UNC Keenan Flagler Business School). Millennials are like sponges; they want to soak up every bit of information and they need to feel that same level of contribution as their non-profit counterparts. So empower your employees, especially those who are your top performers.
2. Provide continuous and meaningful feedback
The revolutionary change in performance reviews also includes changing the annual one-on-one meetings to frequent coaching opportunities. Your top performers want constant feedback and they want to provide their managers with new ideas on what can be done better, easier or more efficiently.
Your top performers want the opportunity to shine….and often. So create a new culture of openness, where your top talent can have informal conversations about their work, what they like, what they dislike, and where their input could make a difference. Take advantage of tools that allow managers to keep up-to-date progress notes; and make it easy for employees to login and see how their managers value their latest contribution.
And……don’t take too long to make the shift from the old school annual feedback to feedback in-the-moment. If you are looking at the millennials to fill your current and future resource needs, take note: According to State Street Global Advisors, “60 percent of Millennials have changed jobs between one and four times in the last five years.” What does that mean to you?……. By not making the shift now, those top performers will be looking for their next job or possibly already be working for your competitor.
3. Provide challenging assignments and meaningful tasks
A Harris poll conducted on behalf of Indeed.com revealed 51 percent of people age 18-34 said meaningful work was the factor that most attracts them to a job. That’s compared with 40 percent of people age 35-44.
Regardless of age, your top performers are looking for work that excites them; work that brings a sense of accomplishment; work that helps their company reach the revenue goals needed to not only be successful, but number one. When you look at “Forbes 2016 Best Places to Work,” you see #1 Airbnb” where employees enjoy a collaborative workplace with fast paced growth; Google, where employees note the excitement of working on large-scale and fast-moving projects; and Twitter, where one employee stated “the culture is empowering” also emphasizing the power of clear and open communication from the company’s executive team.
And you can tie employee happiness and contentment directly to revenue. 2014’s Forbes Best Places to Work saw their top 100 companies’ revenues increase by 22.2%. (Forbes, Happy Employees = Hefty Profits). “And, according to the Bureau of Labor Statistics, these same companies added new employees at a rate that was five times higher than the national average.”
Companies with this rate of success have discovered that giving employees challenging and meaningful work will create a sense of ownership. If your company intends to compete with this Top 100 list, talk to your extraordinary performers often, understand what makes them happy, remove task-laden duties and replace them with goal-oriented objectives that support the company’s bottom line. Don’t wait until your top performers head for the hills……. leaving you with the remnants of their unhappiness.
Make sure your performance evaluation tool contains features that identify company goals, contains a strong coaching mechanism, aligns top performers directly to corporate initiatives and recognizes their achievements. Excitement is contagious so don’t be surprised at the number of “satisfactory performers” who catch the success bug!
4. To be rewarded for great work
For those of you who were ready to throw out the performance evaluation process altogether, hang onto your horses. Without correlating performance to salary, bonuses and other forms of compensation, how do we determine who should be rewarded?
In an article from Fast Company, 3 Ways Companies Are Changing The Dreaded Performance Review, Stephanie Taylor Christenson writes, “It can be tough for managers to nurture and retain talent when they’re limited by set pay scales…….top performers can often feel demotivated knowing that they can’t make more money until annual raise time rolls around.”
Getting paid for the value contributed is essential for keeping your top performers happy and on the bus with you. But there are some creative solutions that can be put into place without altering fixed base pay. Some examples are setting up a discretionary profit sharing piece to your company’s retirement plan (401k, for example). The company match can be determined based on performance. Other examples of non-fixed pay are spot bonuses, peer-to-peer bonuses, additional company-paid time off, and stock options.
Christenson also makes reference to a 2014 TINYPulse Employee Engagement and Organizational Culture Report where only 21% of the respondents said they felt valued at work……yet workplace camaraderie was the top reason cited for being willing to go the extra mile.
So, when designing your reward program remember that corporate culture, values and overall treatment of employees rates right up there with monetary rewards.
5. To understand their options for growth and promotion
One of the most important factors for attracting and retaining top performers is to provide them with a map for growth and promotion. This is a multifaceted process for companies; 1) provide the training necessary for growth; 2) provide access to tools necessary for automated processes and technical training; and 3) provide access to promotional opportunities. Having the tools and training necessary to manage their careers is very important to top performers.
A very important part of the performance review is professional growth. Like all other sections of the performance review, professional growth is not an annual conversation. Managers should be communicating with their top performers continually to keep them excited about career advancements. Although encouraging promotions can create the risk of losing your top talent to another department, but the bigger issue is losing your top performers to another company.
By using today’s refreshing new approach to performance management, doing a solid performance review can be an easy transition. Join the revolution; attract the best talent; share your vision, your mission and goals; then do what it takes to keep your top performers excited. Who knows, you may even make the 2017 Forbes Best Places to Work List!