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How Will Performance Management Best Practices Change in 2017?

By Sue Wigston on January 11, 2017

How Will Performance Management Best Practices Change in 2017.pngIt’s not cheap to find and keep great talent these days. According to a study by CAP, on average, replacing an employee costs a company about 20 percent of that employee’s annual salary. How can you get your best employees to stick around? With effective and thoughtful performance management best practices that build employees up and keep them engaged. Here are the performance management best practices we hope to see adopted in 2017:

Follow the Leader

The new year is a chance to usher in performance management best practices that focus not just on effective management but also on effective leadership. A manager can say whatever he or she thinks will connect the most with an employee during a review—but that’s essentially a “do as I say, not as I do” approach. Effective managers must also model appropriate behaviors so that employees will follow suit. For managers to really take ownership of the performance management system, they must understand their role and the impact that a true leader can have on employee performance. Infusing leadership skills into performance management should be a priority in 2017 and beyond.

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Management, Not Just Measurement

The term “people analytics” burst onto the HR scene sometime around 2007, and we’ve been hearing about the revolutionary potential of “big data” ever since.

Now it’s time to get back to basics: treating employees like people, not numbers. That starts with effective communication between managers and employees. Honest, transparent feedback should be at the heart of performance management best practices. What does effective, people-centered feedback look like? A three-pronged approach: Managers should react to employee actions with honesty, respect the employee by using truthful yet tactful language, and focus on the results of an employee’s actions by addressing consequences.

Anything less is doing a disservice—when you sugarcoat feedback, there’s a good chance your actual intentions will get stuck in all that sticky sugar. But when you approach feedback bluntly and without a care to a colleague’s feelings, you’re contributing to a toxic workplace culture where people become afraid to take risks and speak their minds for fear of a backlash from management. Striking the right balance is key to effective communication. Ultimately, pairing a big data approach with the basics done right—like honest, transparent feedback—can help pinpoint a department’s most promising talent and foster their growth.    

Be Mindful of Millennials

Millennials—those born between 1980 and 2000, roughly—overtook Gen Xers back in 2015 to become the generation that represented the largest share of the workforce. 2017 will be the year that Millennials come into their own—with the help of performance management best practices tailored to Millennials’ needs. And Millennials have made it clear that the traditional annual review just isn’t going to cut it. Millennials crave more frequent feedback from managers and more of a mentor relationship. Adapting to Millennial needs does pay off. According to Gallup, more than twice as many Millennials report feeling engaged at work when they also report that they have frequent meetings with their managers, compared to Millennials who said they do not have frequent contact with managers. And the impact of high employee engagement cannot be overstated; it greatly affects not just employee retention but client retention as well.

The feedback that Millennials crave may be less formal and more frequent, but it should still follow the performance management best practices for effective feedback outlined above: React, respect, and focus on results. And while Millennials may be stereotyped as workers who want a gold star just for showing up, capitulating to that stereotype isn’t doing anyone any favors. Feedback must be constructive to be useful, which means talking with Millennial employees about the consequences of their work habits, both for the company and for themselves.  

To keep on top of the rapidly changing candidate-driven market, it’s clear that the performance management best practices need to evolve to keep up—what changes to best practices do you hope to see in 2017?

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Sue Wigston

About the author

As Chief Operating Officer, Sue's extensive senior leadership experience and facilitation skills have established her as a trusted partner and organizational development expert. She has a proven track record of successfully leading culture transformation in Fortune 500 companies and has established herself as an authority on training and development. Sue has over 20 years of experience in the creation and delivery of programs and custom designed solutions for Eagle's Flight.

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