Perfman HR- Starting the Performance Management Cycle

Career

Performance Management for Retaining Employees With skilled workers in such short supply, and given the cost of hiring and training new employees, many employers are realizing that it’s cost effective to keep their current workforce happy. When you initiate a performance management cycle with a new employee, you are taking an important step toward that goal. By providing frequent on-the-job feedback, you not only build a relationship with your staff member, you help him grow in his job. Those two things alone are often enough to keep motivation high. In survey after survey, employees complain that lack of feedback is one of their biggest problems on the job. According to a 2006 Employee Review by Randstad, one of the world’s largest staffing organizations, 86 percent of surveyed workers said they needed to feel valued by their boss to stay happy—but only 37 percent report receiving positive feedback. So, while it’s important not to let your performance management slide, take the time to learn what’s important to your new employee—especially her long – and short – term career goals and her expectations regarding her job responsibilities. Show an interest in her family and hobbies. Ask for her ideas about the business. Give her ways to earn time off, and reward her for jobs well done. Differentiated compensation schemes—better raises—are one way to recognize top performers. At the same time, don’t lose sight of your midlevel workers, whose loyalty and effort support your company. According to Harvard Business School professor Thomas J. DeLong, in “Let’s Hear It for B Players,” Harvard Business Review (June 2003), if you ignore workers of this type long enough, they begin to see themselves as low performers. So whenever you can, dig into your corporate pockets, as Procter & Gamble did when it gave every worker a one-time bonus of two extra days of vacation (or the equivalent in cash) in the spring of 2004. For jobs where a high turnover rate is hard to avoid, specifi cally repetitive, high-stress jobs such as answering phones at a call center, try to hire people temperamentally suited to the position— friendly, not easily bored by routine, and satisfi ed by a structured environment and the chance to help others. Make sure that you show appreciation for these employees’ efforts. Pay a little better than you have to, and offer fl exible schedules and incentives for specifi c performance goals. If possible, offer opportunities for advancement to those who successfully spend a predetermined amount of time in the job. Most important, understand your employees’ goals in life and do what you can to help them get there. THE HIGH COST OF REPLACING EMPLOYEES

There’s a sound financial logic behind keeping workers content—if an employee decides to leave, replacing him could end up costing his company two and a half times his salary. This startling ratio was released in a 2006 survey of 444 North American organizations conducted by Right Management Consultants, the worldwide leader in career transition and organizational consulting. Yet the amount makes sense if you consider the expense of hiring, training, and severance, plus lost productivity while the position remains vacant. In fact, 43 percent of organizations responding said replacing a worker costs at least three times the employee’s salary. SOURCE: “Survey Reveals Top 5 Mistakes Companies Make When Hiring or Promoting,” Right Management (June 12, 2006).

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