Top Strategies for Retaining Your Key Talent

1.Change the way you measure employee performance

Finding the right people for all types of jobs is difficult in today's world. Applicants have high hopes, are confident and are spoiled for choice. In such a situation, if you feel that you have a large pool of talent in your company, you need to make sure that you do your best to retain them. You can do this by listening to what they have to say. You also need to give them what they want in a fair manner.

Companies used to conduct annual performance reviews where each employee was assigned a rank once a year. This number then served as the basis for compensation decisions. This traditional method has been heavily criticized in recent years because it was described as unfair and demotivating. Furthermore, in the dynamic world we live in, 12 months turned out to be a ridiculously long time to decide performance.

For this reason, several companies, including the largest, have stopped considering annual performance reviews as a way to keep their talent happy. They recognize that the system needs to be reinvented and strategically designed to increase performance, motivate employees, and make them better people. These new strategies have caused a stir in the HR industry.

Many companies around the world have changed the way they measure their employees' performance. The focus shifts to helping employees learn and grow so they feel cared for. This is especially true for Millennials, a generation that isn't interested in fancy job titles and perks, but rather in jobs that help them balance their work lives, pursue their passions, and encourage them to share their concerns with their bosses.

Uber recently conducted a focus group discussion with 600 employees and asked them how they would like performance reviews to be done. A key criticism from most employees was that the old process was too subjective and allowed some managers to give vent to their biases.

At Uber, the main reason the traditional appraisal process failed is that there was no way to track the set goals. Because of this, it was difficult to hold managers or employees accountable. For this reason, Uber has now introduced a system of systematic goal setting, where goals are entered into a system. This system is accessible to employees, managers and senior executives so that everyone can hold each other accountable.

Another special feature that Uber has introduced is the introduction of a new citizenship goal. This goal is about doing something good for others, whether inside the company or outside, e.g.  Helping colleagues or other people outside the company. That's quite a departure from the way performance was originally measured. The new goal is to make the system fair and equitable.

2.Focus on providing valuable and ongoing feedback

Although terms like "continuous feedback" have taken the appraisal world by storm, the whole point of feedback is useless if it doesn't improve employee performance. Frances Frei, SVP of leadership and strategy at Uber, says after numerous meetings with employees, goals should be set to enable more frequent and productive conversations between managers and employees.

Interestingly, Frei also says that feedback should be like a gift. Feedback is often misunderstood as judgment or something to avoid. But that’s not how you should view feedback. If the person giving feedback isn't interested in seeing the employee improve, Frei says they shouldn't give feedback. Therefore, interactions, advice and coaching must be genuine and not just a task to be completed. That's what Uber wants to achieve.

Many companies have adopted technology to achieve this. Goldman Sachs, for example, launched a new performance review system in April 2017 that allows employees to send and receive real-time feedback to their managers throughout the year. This system is called Ongoing Feedback360+ and is part of the project to redesign the annual reviews process at Goldman Sachs last year. This system provides employees and managers with a dashboard that summarizes the feedback they have received throughout the year.

Earlier this year, JPMorgan Chase & Co. also announced its new way of evaluating employees. The company has launched a mobile tool that allows employees across the company to send or receive instant reviews of their colleagues. This software, called Insight360, is intended to support the development of the bank's 243,000 employees. This application allows employees to request and receive feedback at any time and from anyone. This change was made after realizing that many leaders, including Millennials, crave constant feedback.

3.Be fair, transparent and focus on employee development

Any type of performance appraisal can only be successful if it is fair and transparent. This is possible when appraisers are truly motivated to make the right decisions and employees being appraised have the opportunity to voice their concerns.

Facebook tried to achieve this by having colleagues write reviews that were shared not only with managers but also with each other. This reflects the company's core values: openness and transparency. Managers then sit down and discuss their reports face-to-face, incorporating feedback from colleagues. This makes the system fair because compensation decisions do not depend solely on a manager's bias. Once managers write the performance reviews, they are reviewed for bias by a team of Facebook analysts. Once all obstacles are removed, the reviews will be converted into compensation. This process involves a formula so that it is fair because managers have no discretion in compensation decisions.

Finally, feedback is useless if it doesn't help employees develop into better professionals. Too much feedback can confuse employees. This can cause their performance to decrease instead of increasing. This is why it is important to have a calculated and fair system that helps employees prioritize to improve.

Modernizing performance reviews fosters growth and fairness. With tools like IceHrm, organizations can empower employees and enhance productivity.