Creating a productive workforce with continuous performance management

There is a monetary cost to rising levels of dissatisfaction, coupled with disengagement, among workers – according to Gallup’s 2023 survey, unhappiness among employees cost the global economy a staggering USD 8.8 trillion in 2022. Meanwhile, organisations are struggling to cope with high attrition levels – PricewaterhouseCoopers (PwC) stated that nearly 26% of the nearly 50,000 employees it surveyed were eager to quit their present jobs. In its workplace survey for 2023, Ernst and Young pointed out that organisations embracing a more flexible workplace culture boasted higher levels of employee satisfaction in their ranks.

One of the primary factors contributing to this growing sense of dissatisfaction among employees is the sense of helplessness most feel vis-à-vis their position in the overall organisational structure. This can include their relationship with their immediate supervisor, or feeling left out from the organisation’s journey, or feeling as though they are not contributing to its advancement, issues CPM is designed to address. To begin with, it is imperative that the ‘culture’ of an organisation revolves around inclusion, and motivation. It is vital that all employees feel driven by a sense of purpose to keep them engaged in their jobs. ‘Workplace Culture’ is as vital to employee retention as a ‘product’ is to marketing.

There is perhaps no better way to cultivate a sense of ownership of the organisation in each employee than by communicating to them their contribution in accomplishing its goals. While team leaders can easily assemble groups of talented employees and marshal such a force to deliver the desired results, members of such teams not privy to the exchanges taking place within the confines of boardrooms, need the assurance of their value to the business. This can be achieved by giving them a purpose that is aligned with that of the organisation and involving them in decision-making processes.

Achieving profitability, in any business, is a collective effort, and top-down feedback can enable creation of pathways to feed forward. It is essential for organisations to put such a system in place to ensure that the team works concertedly to accomplish collective goals in a dynamic environment. Leaders will have to develop an outlook that is all about looking ahead, while leaving the past well and truly alone. Constant communication between leaders and team members ensures that employees are much more engaged in their duties – businesses boasting higher levels of employee engagement were found to be, on average, 23% more profitable.

As important as constant consultation with employees is, it is equally important for organisations to put in place a system that enables progress of projects to be monitored regularly. Such a mechanism is helpful in providing them with a rear-view of the progress achieved vis-à-vis the plans drawn up at the start of the year. To that end, employees need to have a list of objectives that is SMART – Specific, Measurable, Attainable, Relevant, and Time-Bound. This system provides employees with a tangible marker for the success they have achieved. For instance, they can know for themselves whether they are meeting a stipulated deadline, all the while ensuring their goals are aligned with those of the organisation.

Furthermore, this creates a communication channel between team leaders and their members wherein it is easy for the former to address concerns much more immediately. For example, PwC found that a significant portion of the workforce did not understand the urgency for upskilling; however, constant feedback from team leaders can help impress on team members the need to enhance and expand their present skillset.

CPM is grounded in the belief that the capability of an organisation to retain employees boils down to its commitment to enabling their overall development. The practises grouped under the CPM philosophy enable organisations to illustrate their interest in aiding each employee’s growth. The higher the degree of involvement of the higher management in the development of its workforce the greater the willingness of the employees to continue at their present organisation, the Gallup survey shows. This also helps deepen the psychological attachment of each employee to the organisation, and directly effect a marked reduction in Turnover Intent – an employee’s supposed willingness to quit one’s position within a stipulated period of time.

Achieving a reduction in turnover intent is essential to sustaining profitability, and the role of the human resources team in this effort cannot be overstated. From recruitment, and selection of new employees, to potential loss of clients or sales due to inexperience on the part of new workers, high Turnover Intent can greatly increase capital costs, while shrinking profit margins for organisations.

Salient among the many transformative changes that the pandemic ushered in at the workplace was the new appraisal process. Moving away from the monologue-driven system that existed before, the pandemic compelled organisations to put in place a system that allowed for constant communication between managers and their team members. Instead of assessing an employee’s performance only once a year, CPM calls for constant assessment, and career guidance. This also eliminates recency bias wherein employees are mostly judged by achievements, or failures more immediately preceding the annual performance review.

Furthermore, CPM enables employees to adopt a more dynamic approach to course correction. Rather than wait for the end-of-year appraisal, constant discussions with managers is bound to enable them to take corrective measures more immediately. While each employee’s performance will be measured with respect to the stated objectives, the process will be continuous. Therefore, each employee, benefitting from the inputs one is being fed all-year round reaps the rewards of an uninterrupted development journey instead of one’s growth being impelled by periodic suggestions.

This article is authored by Sweta Mepani, senior vice president, strategic development, digital operations, NTT DATA Services.