The ability to retain top talent can contribute greatly to a company’s success, but it can also pose one of the biggest challenges. Ensuring that employees feel productive, invested and appreciated will make them more likely to say “no” to other job offers and choose to stay on your team.
The risks of neglecting employee satisfaction can go far beyond creating a negative work environment. A 2017 study
by The Engagement Institute found that disengaged employees cost companies between US$450 and US$550 billion a year.
So committing to a continuous feedback process that includes a well-thought-out annual performance review is crucial. Employees who are satisfied with the performance feedback process are more engaged and committed to the organisation, and more likely to be retained, according to a recent Gallup study
. And it’s a win-win for companies — the study also notes that companies with highly engaged employees outperform their competitors with the least engaged employees in categories including:
• 10 percent higher customer ratings
• 21 percent higher profitability
• 20 percent higher productivity
• 24 percent-59 percent lower turnover
• 41 percent lower absenteeism
Set the Stage for Honest and Open Communication
Today’s candidates want ongoing performance feedback, both positive and constructive, to enable them to grow and develop within their careers. Providing regular feedback, and bringing this all together in a comprehensive annual performance review, is a cost-effective way to retain top talent.
Feedback should be specific, and evaluate how an employee has performed against agreed responsibilities and metrics. While quantitative feedback is important, it is also crucial to provide qualitative feedback on an employee’s soft skills and cultural fit within the organisation.
However, an annual performance review should never be the first time an employee learns of a performance problem or issue. Providing feedback and counsel “in the moment” is crucial to keeping employees on the right path, whereas annual reviews can use that information to illuminate the bigger picture and plan for the future.
Employment experts note that a poorly-planned review is often worse than none at all
. Following a structured process helps ensure all the bases are covered and maximises the opportunity for real communication.
Steps to Prepare for a Successful Performance Review
1. Set a date for the review that allows both the manger and the employee enough advance notice to prepare. Choose a meeting location where you will be free of interruptions and distractions.
2. At the same time, provide the employee with his or her current job description, a copy of last year’s review and a self-assessment form to fill out
3. Prepare a draft review incorporating your thoughts from the year, as well as:
a. Notes from any previous performance discussions
b. Last year's performance review
c. Goals, objectives and performance expectations
d. Records of compliments and/or issues from the previous year
4. Request feedback from other managers who worked with the employee
Taking the time to create a performance review that celebrates achievements and addresses employees’ career goals can go a long way toward maintaining employee engagement and retaining top talent.