The recent breakthrough in HR tech – performance management software, promises to maintain and boost employee engagement. Here’s how it helps companies of all sizes.
As organizations continue their climb out of post-recession lows, many are focused on how to generate more revenue while reducing expenses. Companies may create new products or services, market to different or additional demographics, or expand into the realm of mergers and acquisitions to achieve these tall-order tasks. However, one of the most powerful ways to effectively improve profitability over time is to shift focus toward the high-value resource of personnel.
An efficient, motivated, and skilled workforce is a catalyst for positive change in any organization, but finding methods to create or sustain a successful group of employees is not always a simple task. Recent studies suggest that increasing the level of employee engagement is at the helm of this challenge. Implementing performance management systems can result in higher engagement across individuals and teams, but not without first recognizing why engagement matters and what ultimately drives its growth.
Why Engagement Matters
Put simply, employee engagement involves building a workplace environment where all parties, from employees to managers, are allowed and encouraged to produce their best work each day. Having a high degree of employee engagement gives companies more opportunities to grow and thrive over time, but research cites greater levels of disengagement in recent years. According to Gallup, only 15% of employees across the globe are fully engaged in their job, leaving an estimated 85% either actively or subconsciously disengaged each day. Not surprisingly, only 12% of organizations are satisfied with the level of employee engagement they currently experience.
Dismal levels of engagement throughout a workforce are alarming on the surface, but as companies start to dig into the impact of an engaged group, the numbers tell an even more compelling story. Companies that have higher employee engagement experience 16% greater profitabilityOpens a new window ,(Click here to read The Link Between Performance Management And Employee Engagement) as well as 37% lower absenteeism. This can translate into 2.5 times higher revenue and an 18% increase in productivity. Organizations with higher levels of employee engagement also report 65% reductions in turnover. These numbers speak truth into the power of employee engagement, and the need for solutions to improve motivation and connection among workers.
Drivers of Engagement
Based on recent data compiled by Harvard Business Review, employee engagement has several key driversOpens a new window . These include:
- Recognition of work
- Clear understanding of corporate goals
- How individual work contributes to the greater organization
- Assessments and performance reviews aligned with organizational goals
- Personal and professional development opportunities
While employees may place different weight on each driver based on their own experience, companies must realize how important each of these issues is in practice. Fortunately, improving engagement based on these employee needs and wants can be done seamlessly with the help of a sound performance management system.
Benefits of Performance Management Systems
Performance management is the process of setting corporate goals and helping employees develop a plan for contributing toward those objectives in a meaningful way. The execution of performance management has traditionally taken place through periodic employee evaluations, but advancements in technology have made the process far more impactful for companies and employees. Use of performance management software assists organizations in revamping employee appraisal processes and in turn, boosting employee engagement, through a variety of tools.
Companies that use a performance management system have the ability to define and map out corporate goals and strategies to achieve them which can be easily shared with individual employees. Similarly, employees have an opportunity to create their own career goals, based on organizational objectives, and over time, they can track how their contributions help move the needle on larger goals.
Performance management solutions also allow for real-time feedback and recognition when it is earned, and opportunities to correct issues immediately instead of waiting for an annual evaluation. Employees may also have the option to map out scenarios through career pathingOpens a new window software. Â Integrating with performance management software, this tool highlights the professional development, education, and competency training they may need to move forward on their job trajectory.
The combination of these capabilities within a strong performance management solution has a direct impact on the level of employee engagement companies experience. With outlets for feedback and recognition, career pathing and professional development, and a revamped process for accurate and meaningful appraisals, organizations have what they need to increase profitability by improving employee engagement across the board.