- Give 360-degree feedback. Consistent feedback paints a clear picture of employee performance, as blind spots and unintended bias occur more often without input from peers and other stakeholders.
- Link to organizational performance. Most employers (93%) list improving organizational performance as a top priority and they recognize it's critical in order to maintain employee trust and retention.
- Prevent disengagement. Compensation and promotion are based on performance. Employees who don't trust performance management won't believe their compensation is fair. This leads to employees disengaging and leaving the company.
Employees want to know three things: they receive fair evaluations; their pay is reasonable; and they can trust their managers. Unfortunately, the majority don't find these things to be true.
According to a study by WTW, only one in three employees feel their evaluations are correct, and a survey by Gartner found that only 32% of employees believe their compensation is fair. These results are a problem for employers across all industries, and they know it.
WTW's survey highlights that 93% of employers list improving organizational performance as a top goal coming off the heels of a turbulent three years. However, employers can't rely on office perks and in-person camaraderie to attract and retain key employees anymore.
So, what's the solution?
Employers must double down on their overall performance management.
Performance Management Best Practices
Aisling Teillard, chief customer officer at beqom, asserts that employers should use 360-degree employment feedback to paint a clear picture of performance.
"Due to remote work, your boss isn't in the office looking over your shoulder,” Teillard said. “They have blind spots, and blind spots often lead to bias.”
The strength of 360-degree feedback brings in crowdsourced performance reviews from peers and other stakeholders, allowing more profound insight into your daily work. This is especially important if you work remotely or on a hybrid schedule. When others share their feedback on your performance, it gives you more chances to receive recognition for what your direct manager might miss.
Another best practice is offering personalized goals directly tied to the employees' purpose in the company. While setting goals is common practice, only 17% of employers improved employees' understanding of how their performance is evaluated, the WTW survey found.
Goals should help employees understand how their role links to the company's broader vision.
“Companies are used to having cascade goals that move from the top down. But in a company with 100,000 people, the CEO's goals often don't relate to others,” Teillard said. “A better method is to use bottom-up goals.”
She explains that bottom-up goals are when you start with the employee's goals and link them to the manager's goals, continuing that connection as you move up the chain. So, no matter where you are in the company, you see the purpose behind your performance goals.
Another best practice is to be transparent. Lack of trust occurs due to poor communication and lack of transparency. There's a disconnect if you hold annual performance reviews, and that's the only time you express dissatisfaction with their performance.
“Employees are left wondering where your discontent came from,” she said. “If you've been working together for six months or 12 months and didn't mention your concerns, it can feel like a surprise and leave them wondering what happened.”
If employee performance drives compensation and employees can't trust their performance management, they won't trust that they're fairly compensated. That's a recipe for disengaging from the position and ultimately leaving the company, Teillard said.
“If you don't have tools like 360-degree performance reviews, employees will feel like they're not valued and recognized,” she said. “That will create a cohort of disengaged people from the company.”
There’s less emphasis on the in-office experience from an employee viewpoint, often because employees either aren’t in the office or don’t want to be in the first place. Thus, performance management is an even more integral part of the employee experience, Teillard said.
"Performance is one of the few things they can do,” she said. “Not having quality performance management means you're missing out on a key tool that helps you enjoy working at a company, and it's a loss for both employees and employers.”
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