The year is just beginning, and 2023 will bring new challenges for organizations to retain talent and keep numbers up in every organization. Today, it’s no longer enough to offer employees a good salary; keeping employees engaged and motivated is also critical. According to a recent survey by Gallup, well-being and engagement are critical components of strong-performing company cultures.
Research shows that business outcomes improve when people-centered policies are implemented in the workplace. For example, DEI policies, hybrid working, maternity and paternity leave, and better compensation can improve business performance. Why? Because people are the engine of every organization. Therefore, employees should be a primary component of your business strategy.
The relationship between employee performance and business outcomes
Setting performance goals for employees can foster optimal results within a company. They’re a great tool for professional development and increase productivity overall. Cambridge Dictionary defines goals as clearly stating what you want to achieve or what you want someone else to achieve. These could be short or long-term targets that people are expected to meet.
Research has shown that the impact of establishing goals is only positive when both employees and managers perceive them as fair. Companies where employees understand performance management positively impact their organization and are likelier to report better business outcomes.
When set accordingly, performance management has many benefits, including
Better employee engagement. Work becomes a priority when goals are clearly outlined. Instead of creating daily pressure, they function as a ‘true north’ to guide employees in their approach to work. Good performance can become a great tool for promotions, yearly recognition, and a great team-playing drive,
Improved productivity and decision-making. When performance goals are defined, employees focus on the primary tasks they’re given, which helps to avoid distractions or unnecessary tasks that don’t promote business objectives. This way, they’re better equipped to make decisions because they know what is being evaluated and what matters most in a given strategy.
How to set performance goals
How can you set performance goals in a way that’s fair for employees? Here are strategies worth considering:
Your team needs to fully understand their tasks from day one. It doesn’t help to set overwhelming and unreachable goals. Be realistic, transparent, and concise so the employee can clearly understand what should be met by a certain time, avoiding misunderstandings. In addition, set precise objectives and deadlines. When an employee completes objectives, it drives motivation to further goals and makes them feel more engaged and content in the workplace.
LeeAnn Renninger, the co-founder of LifeLabsLearning, suggests in her TED TALK to show impact. For example, name exactly how a data point affected you. For example, if you were impacted positively by another employee’s contribution, say, “I liked how you added those stories because it helped me grasp the concepts faster.” Alternatively, if your performance was impacted by another colleague, say, “Because I didn’t get that e-mail, I was prevented from completing my work.”
Using a data point can help contextualize how individual performance affects the broader organization while allowing opportunities for improvement or highlighting achievements.
Link goals with the company’s general business strategy.
Being a part of the same vision helps teams put forth their best toward the same objective. It helps align everyone toward the company’s improvement and improves understanding of the reason behind every goal objective.
Bernard Marr, a futurologist and business management specialist, calls this approach a “goal framework.” The idea is to lay out the business’s vision and set several strategic goals.
Celebrate your employees’ achievements.
When managers demand a lot from employees, they should provide incentives for employees to continue to achieve performance goals. Recognition or certifications at the end of the year can help increase employee satisfaction in their careers.
In a recent Gallup survey, the stress in the workplace has reached an all-time high. Congratulate your team often, ask them if they need any help, and when it comes the time when they’ve nailed their objectives, share their achievements with other team members and colleagues.
Measure your goals.
Periodically measuring the goal performance can help companies determine if their performance management strategies are working. If goals are struggling to meet expectations, it’s an opportunity to reevaluate performance strategies. In addition, show employees the numbers. Explain to them how their performance can be approved to achieve KPIs. As a result, not only will they be aware of their activity, but they can also reinforce why it is so important to establish performance goals.
To avoid wasting time and keep everyone focused on their tasks, keep long report ratings and reviews for the end of the year. Consider adding software like Trakstar or Synergita to streamline the review process for managers and ensure employees get the most constructive feedback.
Schedule regular feedback conversations.
Be collaborative and create a feedback loop for employees to receive and return constructive feedback. One-on-ones are necessary to help the employee reflect on strengths or areas for improvement and make employees feel mentored by their leaders who effectively coach them to reach the business strategy. Leaders shouldn’t scare employees but give them security with straight and direct communication – sometimes known as “radical candor.”
Make sure these conversations are only about performance. Book a different slot in your schedule for holidays and compensation. Otherwise, there will be mixed and uncomfortable feelings if everything is in the same basket.
Tactics to create a performance-based company culture
Creating a performance-based culture doesn’t happen on its own. It’s important to introduce performance management to your employees early on and provide opportunities to accept and address employee feedback. Here’s how:
How can you demonstrate that your current performance management is working? One method is to develop surveys to allow employees to share their perspectives and give feedback on policies or strategic initiatives. A work environment or pulse survey is ideal for understanding how employees feel about their individual and company performance.
Make sure to include performance-management questions in the survey. For example, how was their experience? Have they reached their expectations? How did performance goals impact their results? Is there a relationship between performance and promotion-resignation?
Assure that HR highlights the importance of completing the survey and encourages every employee to be as detailed as possible. Also, make sure to provide employees with the option to submit surveys anonymously. Anonymous surveys allow employees to submit honest feedback without creating feelings of job insecurity.
Onboarding and talent retention
Establish a performance-based culture from day one. Demonstrate to new hires why your company has implemented performance management as part of its best practice. This allows employers to introduce new employees to company values early on and shape expectations to avoid confusion or clarity. Highlight the message with testimonial videos of leaders or employees speaking about their experience with the company’s performance management practices.
If you want to go further, screening and first interviews can also be a great space to introduce what’s expected and mention the existence and importance of performance management. By doing this, hiring managers can create a performance-based culture by recruiting talent with the same values and ideas.
In addition, when applicable, link your team’s success to your performance-management strategy. When showing the results to internal stakeholders at the end of the quarter, add what goals were set during the presentation. Show how your results correlate to the tasks given to your employees. This practice will help prove how necessary and important these are for business performance.
Put employees at the center of your strategy in 2023.
We live in a time of high employee layoffs, turnovers, and resignations. It is important to understand as much as possible about every employee’s individual contribution and role in the company’s overall health. By understanding employees’ backgrounds, goals, and professional aspirations, companies can work with employees to align everyone under the same vision and strategy; as Peter Drucker, the father of modern business management, once said, “culture eats strategy for breakfast.”
Do you want to attract, motivate, and retain valuable talent? Get in touch to learn how CS-STRATEGIES can help your organization establish a healthy company culture and robust performance management.