5 Ways Employee Recognition will Augment the Annual Performance Review
The onset of the holiday season always brings cold weather, consumer super-sales, and employee year-end performance reviews. Like clockwork, it’s that time of year again already (we can hear you groaning at the thought). As you gear up to evaluate your employees’ performance over the past 12 months, consider this mantra for 2013: the annual review does not have to be your most-feared administrative chore.
Although most organizations determine bonus compensation based on the annual review, this process alone is not enough to engage employees. While the annual review acts as a performance indicator, it may actually hinder employee engagement and growth – unless it’s coupled with employee recognition. Most organizations rely on annual performance reviews to drive employee results, yet 71 percent of Americans are not engaged in their current positions.
So, what’s the problem? We’re not suggesting that you abolish the annual review; however, you should consider the benefits of incorporating employee recognition so that the year-end process is more tolerable for both HR and management.
Here are five ways employee recognition will augment the annual performance review process:
1. Infrequent recognition is costly
The cost of infrequent recognition (for example, only during an annual performance review) is a missed opportunity for employers to offer critical feedback and inspire employees to do their best work. Your employees must perform in order to drive results, but it’s difficult to evaluate or improve employee performance without regular feedback. Most importantly, frequent feedback helps to solidify an employee’s emotional connection with the organization, making them more engaged.
2. Big data leads to big insight
Annual performance reviews can be a major drag, especially when you must evaluate an individual’s performance over the span of 12-months without sufficient data and reporting. A consolidated recognition program can help you generate automatic reports that show you an employee’s recognition history over an extended period of time. Specifically, you can understand how specific feedback correlates to an employee’s individual performance. This will help you make better decisions faster.
3. Escape the administrative rock
Ever feel like you’re under a rock when it comes to writing annual reviews? You’re not alone. A standardized recognition program will help you document specific employee feedback, automatically. Instead of spending your valuable time trying to track down examples of your employees’ performance over a year, you can actually focus on the task at hand and evaluate your workforce, providing constructive feedback for the coming year.
4. Align employees and business success
Most annual reviews are based on individual employee performance, but how does this process speak to the bigger picture? A recognition program can help you align employees to specific objectives geared to drive success. With every bit of feedback, employees understand how their behavior is aligned to the big picture. This instills a sense of empowerment and achievement, making employees more engaged. And, according to the Hay Group, engaged companies have 40 percent lower turnover. Think about it.
5. Recognition drives culture, and not the other way around
Your company culture is your secret sauce, and no other company can take it from you. However, the annual performance review is disconnected from company culture. In fact, it could actually derail your culture and morale if employees are only receiving recognition or feedback once per year. For example, Southwest Airlines, who reported earnings of over $152 million in profits in 2011, is committed to building a happy, talented and productive workforce through their unique culture. They believe their people are their greatest asset, and it’s their culture that continues to catalyze their dominance in the market.
To summarize, implementing a standardized recognition program will not only help strengthen your company culture and align employee behavior to key business drivers; it will provide a source of timely, relevant data on employee performance throughout the year. Data that can be accessed by HR to simplify the annual review process for managers—as well as make it more meaningful for employees.
For more information about employee recognition, and how it drives employee success, visit www.achievers.com to learn more.