Let’s Not Panic Over the Quit Rate. But Let’s Not Ignore It.

New data shows that workers are not afraid to leave their employers, even during economically challenging times like these.

The U.S. Labor Department recently reported that roughly 2.4 million American workers quit their jobs in November of 2013. More remarkably, the percentage of workers resigning from their jobs—known as the “quit rate”—is now higher than it was before the recession: America’s quit rate was 1.8% in November 2013 … up from 1.2% in September 2009.

Okay, there’s no need to push the panic button. A significant share of this spike in the quit rate came from low-wage jobs in the food services and retail industries. Even so, the quit rate should serve as a useful reminder to all of us about the importance of retaining our top talent. After all, they’re the most valuable workers we have. They’re also the ones who have the most employment options and, therefore, the easiest time walking out the door.

We now know that today’s employees are motivated to remain loyal to their employers through a complex mix of intrinsic and extrinsic factors. Intrinsic factors include how connected they are to their work, the sense of fulfillment and pride they get from their work, and the feeling that they are making a valuable and valued contribution to the organization, among others. Extrinsic factors include compensation, non-cash rewards, performance reviews, promotions and demotions, and the like.

Of course, savvy employers address all of these factors and the corporate world has given more and more attention to the intrinsic factors they once ignored. Many employers, for example, are building employee engagement levels by giving workers more mentoring, offering them exciting “stretch” assignments, and giving employees roles and responsibilities that are more closely aligned with their personal career objectives.

At the end of the day, retaining our top talent is all about rewarding and compensating them effectively. And that means much more than “paying” them appropriately. The most effective rewards strategies are total rewards strategies, which encompass compensation, benefits, learning and development, career advancement opportunities, and more.

If you’re interested in reading more about total rewards strategies that can help your organization retain its top performers, download a copy of our white paper, “Put Your Money Where the Motivation Is: Compensation Strategies to Retain Your Best People.”

Hating on Performance Reviews—and the Old Switcheroo

"Study finds that basically every single person hates performance reviews.”

With a headline like that, it’s no wonder a recent Washington Post article continues to get attention. The problem is it’s not true—not even according to the research the article cites as its

source.

The research was conducted by psychologists at Kansas State University, Eastern Kentucky University and Texas A&M University, who “looked into how people respond to negative feedback they receive in a performance review,” according to the article. It also says the researchers “asked 234 staffers at a large southwestern university to rate their feelings about a performance review they received three months earlier.”

Based on those facts, it’s a little difficult to understand how the Washington Post can justify the headline it ran. Okay, it’s VERY difficult to understand. But we definitely understand why they ran it: it’s a sure-fire attention grabber. It’s like a lot of recent headlines that hate on performance reviews.

Although it seems fairly obvious, we’d like to point out that there’s a significant gap between everyone hating performance reviews and a few statistics showing 234 individuals at one university generally don’t like getting negative feedback during a review (who does?) and some portion also disliking a recent review.

If this research does highlight anything it’s not that everyone despises performance reviews. It’s that many managers continue to do a less than stellar job of conducting reviews. If they truly want to help drive employee performance effectively, managers need to learn to be more constructive, guiding and mentoring—even when they’re providing negative feedback.

The Washington Post article is really just the latest in a long line of articles that pull the old headline switcheroo. Dozens of pundits and bloggers have written headlines like, “It’s Time To Eliminate Performance Reviews,” and then offered advice on how to conduct performance reviews properly. Clearly, it’s a popular attention-getting device.

Even so, performance reviews continue to be a necessary and effective tool for helping our employees grow, develop and even excel. But we need to conduct reviews appropriately and in ways that reinforce our employees’ commitment to doing the best work they can.

To read more about performance review best practices and how to rethink your appraisal process, download our white paper, From Dread to Moving Ahead - Taking the Pain Out of Performance Management.

Performance Measurement Is Not a CYA Activity

Here are a few lines from the recent Forbes article, ‘If You Can't Measure It, You Can't Manage It': Not True, by Liz Ryan:

“Measurement is our drug in the business world, because we believe that by measuring everything and sending the good news upstairs to the C-suite we can ward off the bogeyman of business, namely Getting On the Boss’s Bad Side. Measurement is our favorite CYA activity. It’s an inherently fear-based process, because the reason we measure everything in business is to prove to someone who’s not in the room that we did what they told us to do. … Measurement is our opiate of choice in the business world precisely because it temporarily allays fear all the way up the ladder.”

Yeesh! There’s no mistaking Ms. Ryan’s contempt for much of the measurement being done in today’s business world. My own feelings about measurement—and her opinion of it—aren’t nearly so black and white.

On the one hand, I wholeheartedly agree with the spirit of what she’s written. Measurement as a CYA activity is a colossal waste of time, energy and focus. On the other hand, I completely disagree with the way that she has characterized measurement—especially when I think of it in the context of performance measurement.

• Performance measurement isn’t about CYA. It’s a legitimate and proven way to drive employee performance toward delivering specific outcomes. In this sense, performance measurement is a CYW activity—an ongoing effort to Calibrate Your Work to the evolving goals, targets and strategies of the company.

•  Performance measurement is not about sending good news upstairs to the C-suite. It’s about keeping our leaders honestly informed of the performance of our individuals and teams. Sure, some of the news will be good. But, if we’re doing our jobs well, much of what we report will be about critical skill gaps, talent shortfalls, training and development needs, turnover forecasts—in short, the “bad news” our senior leaders need to proactively manage the business in a truly strategic fashion.

•  Performance measurement is not inherently fear-based for many organizations. It’s a process driven by the need to have our people achieve specific goals and deliver specific outcomes. These goals and outcomes are tied directly to the company’s competitive position and its ongoing success. Savvy employers don’t rely on fear to “motivate” people; they give their workers the feedback, guidance and developmental mentoring that will enable them to excel. Engagement, not fear, is inherent in sound performance measurement.

•  Performance measurement is not an opiate meant to sedate us. Quite the opposite. Performance management is meant to be a wake up call, when necessary—a cold dose of reality that opens our eyes to our own shortcomings and weaknesses. But it’s also meant to keep us aware of everything we’re doing well. We need both sides of the story to build performance-driven, winning cultures. Information is the key, and a great deal of this vital information comes out of the performance measurement process.

Again, I understand and agree with the larger point that Ms. Ryan was making about the business practice of mindlessly “measuring everything.” And I understand that some employers still haven’t gotten everything right when it comes to performance measurement.

But I also believe there’s only one way we’ll all get better at managing and maximizing the performance of our people—by measuring it and then taking action either to support or change it.

Can Performance Reviews Actually Help You Improve Employee Engagement?

The simple answer is yes—if you leverage reviews to develop targeted learning plans for your employees. More on this in a moment …

Gallup’s most recent State of the Global Workplace report is an ongoing study of employee engagement in the workplace, and it contains more than a few striking statistics. Here are two

that hit us like a sledgehammer:

·       Only 13% of employees worldwide are engaged at work.

·       In the United States, 30% of employees are engaged at work.

The good news (if you can call it good) is that our domestic engagement rate tops the global average. But it still leaves a lot to be desired. A stunning 70% of our workforce is either only moderately engaged or outright disengaged from their work.

The Gallup Business Journal website recently published an article titled, “5 Ways To Improve Employee Engagement Now,” which is worth reading. It offers sound insights on how to gather truly accurate engagement data from your own workforce, where to focus your engagement improvement efforts, and why frontline managers are so critical in building and maintaining employee engagement.

Another powerful way to enhance your organization’s engagement levels is to leverage information from performance reviews to help you develop targeted learning plans for each of your employees.

This is an often-overlooked strategy for building engagement because many managers treat performance reviews as a mere formality or a necessary evil. The fact is every performance review is an opportunity—an opportunity for managers to develop and mentor their people, and an opportunity to gather crucial information about the areas in which employees excel and struggle. This information is developmental gold. It should be used as the basis for selecting learning curriculum that will build up strength and close skill gaps.

By developing targeted learning plans for your employees, you openly demonstrate your commitments to them. You actively support their personal and professional growth. And you significantly boost their chances of advancing within the organization.

This won’t go unnoticed by your employees. Indeed, they’ll reward you with their loyalty and a deeper level of engagement.