How can employers REALLY improve staff engagement and productivity?

Guest blog by Adrian Lewis

As we approach the end of the first quarter, and the end of the financial year, many businesses are looking at staff performance – and the age old debate about performance  appraisals.  Engaged employees are productive employees – so why isn’t the UK competing, productivity wise?

Social Seeder produced an infographic showing what makes employees feel engaged, based on research from Red Letter Days:

Original infographic found at https://www.socialseeder.com/what-makes-an-employee-highly-engaged/

What do employers do now?

It seems the performance review process is failing to deliver the engagement objectives the study identified – so what IS the process?

• No process at all?  Some organisations have never reviewed staff performance.  Many plan to introduce reviews each year, but other priorities overtake the good intentions.

• Some businesses decided to ‘scrap appraisals’ after it got trendy few years back.  CIPD research shows that businesses who scrapped appraisals are now facing productivity challenges.   Hands up those who did what they should and replaced appraisals with a system of performance reviews, regular feedback and coaching – you are probably among the few UK organisations without a performance problem.  Many companies just threw the baby out with the bathwater.

• Finally, many organisations still use an outdated traditional annual appraisals process – and experience the same performance challenges as those who do nothing.

Outdated systems for performance reviews do not engage people – and are therefore not tackling productivity.

What is the traditional process?

Traditionally, appraisals are done yearly and mean a big paper filling exercise, a few tick boxes and an awful lot of passing word template documents you downloaded off the internet back and forth between team leaders and HR.

Line Managers often don’t receive training on how to do an appraisal.  Whilst managers are supposed to deliver feedback for a whole year’s performance, using old paper systems and no long term records, the appraisal winds up relating to the last few weeks and only considers the reviewer’s current opinion.

Under this model, employees see the review as a trip to the Headmaster’s office.  Neither party enjoys the experience and once the deed is done, there is a sigh of relief from both parties and they move on to the next task.   There is no consistency between reviewers, HR are left to navigate a pile of emails and paper, and to be honest it’s easier for HR to file away the problem than investigate what isn’t working – if that’s all you plan to do, you may as well scrap appraisals.

That’s a shame, because getting performance reviews right, like Adobe and countless other employers have done,  means the business could see:

• increased employee engagement
• better employee performance
• improved staff retention and
• improved employee satisfaction

How can businesses get performance reviews right?

Adobe have been hailed as the poster child for scrapping appraisals – but what they actually did was make a commitment to communicate with their staff more effectively, looking at motivation as a continual goal rather than a nudge once per year.  They have quarterly meetings, two way feedback, and both parties can also request meetings in between.  The process is more open, with continual coaching and open team feedback.  It’s not so much of an assessment as mutual goal to drive performance forward.   Adobe have experienced 30% less employee turnover since implementing the system – rare in a high talent environment.

Of course, not every business has Adobe’s level of resource – but every business can benefit from a more inspired, structured approach.  After all, the meeting aspect is the same, so why not have a meeting that inspires your team rather than leaves them feeling negative?  Here’s some of the things I recommend businesses think about:

• asking for employee feedback ahead of the meeting
• peer reviews (360 degree feedback)
• an agreed structure for reviews thoughout the organisation
• agreed competencies for each job role against which employees can be assessed
• identify learning and development opportunities
• agree SMART performance objectives

All of this CAN be managed through a manual system – but keeping all that on track, shuffling paper back and forth, is a time intensive process. It makes commercial sense for HR to switch to a cloud based appraisals system – which has the added benefit of both manager and employee being able to see exactly what was agreed and stay on track, rather than digging out old pieces of paper from somewhere in the filing cabinet.

HR Managers would not think twice about buying a staff member a cup of coffee once a month for a tangible improvement in performance if a benefits expert advised it would work, but they are often reluctant to invest in software – software to manage performance reviews would cost about a tenth of that, and the potential for impact is huge.

Isn’t it time HR took a fresh look at how we manage our people?