Continuous Performance Reviews: Rethinking Employee Retention
Companies worldwide are rethinking their talent and performance management approach, as we’re in the midst of a workplace transformation. Some might even call it a workplace revolution. With the rise of technology and AI, and the shift towards remote work, the success of most modern businesses started to rely massively on employee tracking software.
There is an increased demand for workers with specific skillsets and capabilities, such as a particular level of technical literacy, self-sufficiency, or excellent organizational skills, for example. These workers often turn out to be “high performers”, and they have a reputation for leading companies to success and higher overall productivity.
A study of more than 600,000 researchers, politicians, athletes, and entertainers found that “high performers” are 400% more productive than average workers. That’s not all. The study found that the more complex the occupation, the higher the performance. For example, high-performing software developers were 800% more productive than average performers.
However, companies are struggling to keep high-performing workers. Employee turnover can severely harm companies’ growth and brand image. Turnover messes with the organizational structure of a business, potentially sabotaging healthy employee communication and it’s costly for the company.
With an increasingly more competitive work environment, new strategies emerge as ways to attract top talent. Competitive salaries and an alluring set of benefits aren’t enough to keep high performers around. Employee happiness and engagement are now essential for higher employee retention.
How can you increase employee engagement and satisfaction, without disrupting your employees’ workflow?
Simple. Offer continuous performance reviews with the help of monitoring data. If you’re curious about how continuous employee reviews lead to higher employee retention, keep reading.
What Are Continuous Performance Reviews?
To fully understand the connection between employee performance and lower turnover rates, we need to understand what constitutes performance management.
Performance management is split into three phases:
Performance appraisals serve the purpose of improving employees’ performance through constructive feedback. Depending on the performance management model of the company, the frequency of reviews varies. Most commonly, employee reviews are conducted annually. Back in the 80s and 90s, yearly reviews were a good way to track employee progress and promotions/raises because companies operated on a yearly cycle.
Nowadays, however, annual reviews, are demotivating, inaccurate, and drive employee turnover rates up. It doesn’t stop there, since yearly performance appraisals also stress managers out and they even make performance worse one-third of the time, the research found.
Annual feedback leaves neither the manager nor the employee any room to be proactive or particularly constructive when creating the review. For example, an employee might be eager to discuss an upskilling opportunity but needs to postpone this discussion until it’s time for their appraisal.
When you stump employee career development by delivering unhelpful reviews, chances are that they’re going to look for a new employer willing to put extra time and effort into their development. For this reason and numerous other benefits listed below, you need to embrace and implement the concept of continuous performance appraisal.
Continuous Reviews Lead To Company Success
Nowadays, workers expect employers to help them grow professionally. Instead of waiting for months on end, managers can quickly correct mistakes and redirect support or praise by shortening review cycles. This way, they’ll have better chances to retain top talent.
It’s possible to do continuous reviews without the help of modern software in smaller companies since it relies on frequent reporting. However, the development of revolutionary technologies such as HR management software and software for employee monitoring was closely tied to the transformation of worker appraisals. Plus, implementing this technology makes adopting this progressive approach much easier, even for big enterprises.
Helps to Set Clear Expectations and Goals
Communicating work expectations is crucial for high employee performance. This said employees often fail to meet their work expectations due to miscommunication. Since continuous management relies on agile methodology, it’s important that workers understand their performance metrics and employer expectations.
In an ideal scenario, the manager and employee work together when setting up these expectations and goals to ensure maximum transparency. Mapping out these expectations has also proven to lower anxiety for all parties involved.
Promotes Healthier Communication and Creates Stronger Relationships
An effective manager can understand an employee’s performance beyond just numbers or data. Great manager uses their data-driven observations to start meaningful and important conversations with employees regularly. This leads to fostering a culture of honest feedback where workers can thrive.
If managers can’t be honest with their workers about their performance (or anything else for that matter), employee satisfaction may start plummeting. Empty encouragement or praise won’t create a very effective team and will elevate employee turnover rates. Employees want fairness, trust, and constructive feedback. Monitoring data adds a much-needed lens of objectivity to the review process. More objectivity and less bias will lead to higher employee retention.
Easily Spots Top Talent and Underperformers
You can apply the mutually agreed upon performance metrics on an individual basis through employee tracking. This way, every member of the team can see where they are in terms of work success. Performance management also means appropriately rewarding performance that exceeds expectations. High performers are easy to spot and reward with the help of data. This also helps you retain that top talent.
If a team member is underperforming, the manager can point it out immediately and explore what might be holding them back. Any work-related confusion can get cleared up through conversation, and more training or support to help them reach their goals.
Keeping Up With The Times
Many companies don’t do clear annual cycles anymore. With the switch towards the gig economy, companies are focusing on projects and meeting close-knit deadlines. This means that workers have a greater number of milestones to achieve, instead of only one measurable goal annually. A modern approach to performance management requires a modern solution. In this case, monitoring software for employees.
As a result of switching to remote work due to the pandemic, many organizations have completely adapted to hybrid work in the post-Covid era. Enterprises such as Atlassian, Spotify, and Twitter even announced that this switch will be permanent. Managing a remote workforce comes with its challenges, one of which is employee reviews. However, with monitoring data, managers can see how their team is doing – in real-time, no matter where they are.
Through monitoring data, both managers and workers can retain top talent, all while having real-time insight into worker performance through established and discussed performance metrics. Continuous performance reviews work so well because managers use these reviews as chances to reflect and improve worker productivity, as well as opportunities to have constructive, open conversations.
This approach to employee reviews creates a company culture that takes care of its employees. And who doesn’t want to be a part of a nurturing organization that cares about employee development and satisfaction?