In past years, annual performance reviews were deemed necessary to ensure fair labor practices and standardizing pay and performance. However, in recent years, research has revealed that these processes are time consuming, discourage employees, and deter honest conversations. Employee performance practices must change to reflect today’s evolving workforce. Annual performance reviews are no longer effective in a fast-paced workplace where employees desire on-going feedback and flexibility – and where retention and engagement are vital to remain competitive.
Could continuous performance management be the solution to this problem? There has been great emphasis on the importance of providing employees with continual feedback that hones in on the individual’s strengths and development opportunities. Today, managing performance is about empowering employees to be more effective, and improving their level of engagement. To get an effective process in place, leadership needs to create strategic programs.
Managers need more visibility
Managers are no longer simply “driving performance.” Organizations are now responsible for building leaders who have the skills needed to engage, develop, and retain top talent. To achieve this, managers need technology and tools that provide comprehensive visibility into their direct reports’ skills and competencies – insightful talent data that helps them better engage with their employees.
Likewise, employees need to have a better sense of what opportunities lay ahead of them, what development they need to achieve those opportunities, and the tools needed to grow their careers. When employees have greater “career transparency,” they have a better understanding of their career path within an organization, thereby reducing overall attrition.
To help leaders have more effective performance conversations with employees, it is essential to provide them with insight into possible flight risks along with suggestions on how to keep top talent engaged. When considering this, a continuous performance discussion is not enough. Organizations must look at the comprehensiveness of an employee’s talent profile to proactively provide managers with an understanding of their employee’s career goals, strengths, development opportunities, and, most importantly, provide suggested discussion topics and actions for the manager. This of course entails a broader talent management strategy inclusive of learning, development, engagement, and retention.
Where to start
When creating a talent management strategy, begin by assigning ownership of performance management. This function often gets distributed among many groups who own small parts of the process. Finance handles compensation; organization development (OD) owns leadership development; and HR handles compliance. Today’s chief learning officers would love to connect learning and development to performance plans – however, oftentimes systems are not integrated to allow for this optimal talent management practice.
It is time to rethink this traditional model and create a performance committee where all groups can convene to look at how the company can effectively manage the engagement, performance, development, and retention of talent.
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Is Talent Acquisition a Strategic Business Partner to Companies?
Talent management supports the whole business
As you develop the broader talent management strategy and associated performance management process, considering company culture is also vital. Talent management strategies should be aligned to support an organization’s culture and overall business strategy. It is important to put deep thought into what is needed to boost organizational performance and what business challenges could be solved through performance management. More likely than not, organizations are looking to drive business results through the development and growth of employees.
Leader and employee development
Talent or performance management processes should equip leadership with the tools needed to provide better feedback across an organization. This starts by giving managers full visibility into key information, including job and talent data. If the organization has a strong behavioral assessment tool, this can be used as a guide to help managers identify important questions and have valuable dialogue with their employees.
Additionally, companies can create career transparency for employees by providing them with a clear view of their individual career path. This can be achieved by sharing exactly what they need to do to grow – and what future positions are available to them. Technology solutions can guide employees to people they can connect with for coaching and mentoring, as well as provide guidance about what external courses or internal curriculum they can utilize to continuously develop their own skillsets. If a company is not giving employees a clear career path, they can bet that their competitors will.
An effective HR technology strategy should shift the focus for managers to truly develop employees, not just provide them with continuous feedback.