Performance reviews are becoming more important to organizations as the years go on. They are a great way to retain talent and gauge how your business and employees are performing. Performance reviews allow organizations to make improvements to aspects where the business is lacking.
Since the end of the Great Recession (‘07-’09), unemployment has been dropping to historical lows as businesses grow and add employees. The pandemic presented new challenges with unemployment. During the peak of the coronavirus, unemployment rates were as high as 14.8% and have significantly dropped off since then to 4.6% as of October 2021. The cost to acquire new employees has become much steeper than ever before. So, maintaining existing employees and developing them has become extremely important. According to SHRM, the cost to replace an employee is between 90-200% of their salary. That is a hefty amount that could be avoided with the help of performance reviews.
In September of 2021, 4.4 million people in the United States voluntarily left their jobs. Performance reviews can help reduce voluntary turnover by keeping employees engaged. Performance reviews can reduce attrition rates up to 40% because employees have a higher level of engagement (Lattice). Lattice states the three-year impact of a performance review return on investment is 195%.
How to Leverage Performance Reviews
To get the most out of your performance reviews, it is best to have reviews be more frequent than once or twice a year. Be sure to set expectations for managers and employees about work, progress, and development. Encourage honest feedback from both managers and employees to get an accurate understanding of the organization as a whole. When your organization begins to implement performance reviews, give formal training to supervisors on how to conduct them.
Supervisors should know exactly what the end result of the review should be. It is important supervisors are specific about their comments and feedback, engage employees for feedback especially when there is conflict, and to follow up with employees after the review. More frequent reviews can enable organizations to create shorter and more simplified reviews. This, in turn, can allow managers to focus on one to three ideas and drive them home for employees.
Technology can be very helpful when doing performance reviews. An electronic performance review system can help organizations automatically set scheduled reviews, making more frequent reviews easier for supervisors and the organization. Using an electronic review system stores all performance reviews in the cloud, saving time and money on office supplies. Storing in the cloud allows supervisors to pull all previous performance reviews easier since there organized in one convenient spot.
Dominions Performance Reviews
Dominion Systems’ performance review platform is customizable in every aspect. You can do as many performance reviews and make them as frequent or infrequent as you would like. With Dominion, all performance reviews are stored in the cloud and are easily viewed on the performance review dashboard. Another benefit to cloud-based performance reviews is they allow employees working from anywhere to be able to complete them as well. Dominion’s Performance platform integrates with our payroll and allows for merit increases and bonus pay based on employee performance. Of course, payroll will still have to approve the pay increase and bonus payments.
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