Making Impact With Employee Feedback

Over the years, the process of going into a periodic appraisal was met with a lack of energy and sometimes a little bit of fear. It's not that I ever believed that I was doing a terrible job, but I am probably the worst employee ever at selling myself, articulating my strengths or potentially even being able to twist the truth to make myself look better. In addition, working in a field based role without these skills, has probably made the whole process a little bit useless for me and my previous managers.

The Problem

The vast majority of organisations still schedule periodic employee appraisals or reviews, in many circumstances only once or twice a year. There are clear problems with this approach:

Short Memories

When you review an employee's performance infrequently, you are essentially only monitoring performance for the last two weeks. An employee who has had an amazing 11 months but fallen on harder times just prior to the appraisal can be unfairly judged.

Old Goals

The less frequent the review the more out of date goals become. It could be that all of the goals set at the beginning of the year are completely useless by the time an employee review takes place.

Single Touchpoint

The detail generally discussed in a traditional appraisal is based on direct interactions between the manager and the employee. If the manager is not completely engaged or the relationship is not as strong as with others in the organisation, an inaccurate picture can be formed.

All of these points have meant that 58% of executives believe that their current performance management process drives neither employee engagement or greater performance (https://hbr.org/2015/04/reinventing-performance-management).

The Introduction of Feedback

For many years, the problems discussed above have been addressed in part by the introduction of two factors: more regular reviews and employee feedback. This has seen an improved view of the performance review process with 96% of employees saying that receiving regular feedback is a good thing (https://www.officevibe.com/state-employee-engagement).

However, 62% of employees wish they received more feedback from their colleagues (https://www.officevibe.com/state-employee-engagement) and 32% of employees still have to wait for more than 3 months to get feedback from their managers (https://www.officevibe.com/state-employee-engagement).

Solutions

Many organisations are now applying feedback and other tools into the review process but there is more we can do. Examples of modern solutions include:

Peer Feedback

I'm sure many of us have worked in organisations where a tool exists to send feedback about the organisation, such as an annual employee survey. In some cases, organisations provide a tool that you can send feedback about a peer. However, it is clear that many of these tools still require the manager and/or the employee to request feedback from peers. This also tends to happen around the time of a review meeting, delaying the impact of the feedback and also falling fowl of the short memory issue discussed earlier.

Recognition Tools

Recognition is important and can take the process of feedback and make it instant and gamify the process. A recognition tool will enable managers, employees or peers to submit a recognition award or badge for positive performance. The trick with recognition tools is to ensure the criteria for recognition is not too restrictive as well as enabling cumulative evidence to support the reward or recognition.

The key requirement for these solutions should be that the evidence is captured immediately and shared between the employee and their manager and for that data to be maintained and useable within a periodic structured review as achieved within the Microsoft Dynamics 365 for Talent app. 80% of Generation Y employees stated that they would prefer on the spot recognition for positive work (https://www.achievers.com/press/achievers-and-experience-inc-reveal-class-2012-study-results/).

The Result

The impact of effective feedback within an organisation is considerable, including:

Employee Retention

I have always been sceptical when I read that feedback tools and similar can reduce employee turnover. However, the evidence is there and a Gallup report suggests that employee turnover is 14.9% less for organisations with effective feedback. With the average cost to replace an employee up to ￡30,000 (www.acas.org.uk/index.aspx?articleid=4857), the potential savings to an enterprise size business are startling.

Imagine if you are a 10,000 employee business with a 10% employee turnover rate. The potential savings for your organisation could be up to ￡4,470,000 per annum (10,000 employees x 10% x 14.9% = 149 employees. 149 employees x ￡30,000). This may be an extreme view of the problem, but even if the actual figure is a tenth of that figure, we are still talking about ￡447,000 a year.

Increased Productivity

An interesting statistic is that 69% of employees stated that they would work harder if they felt their efforts were being recognised. Actually, 92% of employees even felt that negative feedback would help them improve their performance. Increasing the productivity of existing resources has a huge positive impact on an organisation.

Take the 10,000 employee example, with an average annual loaded cost per employee of ￡27,600 + Employer's NI (www.instantoffices.com/blog/reports-and-research/average-uk-salary/). A very modest 1% increase in productivity would equate to ￡3,037,500 benefit to the business per year. Even a tenth of that productivity increase would equate to a benefit of ￡303,750 per year.

How can employers afford not to introduce an effective feedback tool into their organisation?