While many companies are familiar with traditional annual employee performance evaluations, the topic of employee evaluations has expanded greatly over the last decade. In today’s candidate driven job market, engaging employees is vital for retention, and investing time into performance management helps employees feel more invested in their jobs. As the workforce welcomes more mobile, tech-oriented Millennial and Gen Z employees, companies should consider how to tweak their performance evaluation process to better fit the needs of managers, employees and the bottom line.
Goodbye Annual Employee Performance Reviews
Studies show that despite the popularity in the business world, annual employee performance reviews on their own aren’t very beneficial at all. According to insights and technology company CEB, managers spend an average of 210 hours per year on performance management, while employees spend an average of 40 hours annually. Despite all the hours dedicated to employee performance evaluation, CEB found zero correlation between traditional yearly performance evaluations and business results. That’s a lot of time to spend (and waste) on activities that don’t impact the bottom line.
As Millennials and Gen Z continue to enter the workforce, they’re also bringing with them a new set of values and expectations for their managers. Younger generations want and expect real-time, frequent feedback. In fact, 61 percent of Millennials would switch employers to work at a company that didn’t use the traditional annual review process, in favor of real-time, qualitative feedback. Growing up in the age of instant feedback, it’s no surprise that four our of five Millennial workers want feedback in the moment rather than a mass amount of feedback once a year.
Focus on Employee Engagement
There are over 2,000 working hours in a year. Managers who only use the annual employee performance evaluations can miss out on work-related activities, questions, accomplishments and more in that amount of time. By holding employee performance evaluations once per year, managers also miss out on opportunities to engage their employees and re-connect them to their goals.
A Gallup study shows whose managers hold frequent meetings with them are three times more likely to be engaged in their jobs, compared to yearly reviews. Frequent one-on-ones give managers the opportunity to provide real-time feedback and give employees a chance to make incremental changes and voice concerns as they arise. They also give managers the opportunity to address minor performance issues before they become more serious.
Benefits of Performance Management Systems
Managers who opt into a performance management system should be on the lookout for a software that allows for 360-degree feedback. This type of feedback allows for anonymous input from other team members, managers and direct reports, to give the employee an all-encompassing review of their performance. The right system will allow for customizable competencies to measure against that can align with company goals as well.
Beyond the individual employee, an employee management software is a way for managers to gauge the competencies of entire teams. This type of functionality is useful in determining next steps in hiring for new positions, as well as succession planning in event of a retirement or resignation.
How to Conduct One-on-Ones
There are no specific rules for conducting one-on-one meetings between managers and employees, but there are a few guidelines companies should follow. Employees company-wide should be given the opportunity to meet with their manager on a regular basis. For some teams, that means a weekly meeting, others monthly or quarterly. An appropriate amount of time should be allocated for each one-on-one as well, depending upon the job and needs of the employee. Meetings lasting between 30 minutes to an hour are standard, but managers and employees can determine the amount of time needed on a case-by-case basis.
Use a systematic approach to conduct each meeting. A performance management system can guide the conversation and help you track and record goals and accomplishments as they happen. No matter the approach, ensure each employee is treated fairly and respectfully during their one-on-one, and that actionable goals are outlined.