If you lead or manage a business, chances are keeping your employees happy over the past few years has been challenging. First came the “Great Resignation” during the COVID-19 pandemic, followed by the “Great Reshuffling.” Even now that the public health crisis is over, however, organizations in many industries are having difficulty remaining fully staffed.
Unfortunately, this problem is unlikely to go away anytime soon. According to the US Chamber of Commerce, businesses will continue to face labor shortages for the next few decades due to an aging workforce and continued job creation.
“Given this situation, it’s vital for business leaders and managers to adjust their approach to make the most of the employees they already have and build a sterling reputation as employers,” says Hari Srinivasan, founder and CEO of iCover. “Mentoring and guiding your employees is an indispensable way to retain them while ensuring your enterprise’s success. In my experience, this can be done by following three best practices.”
#1: Don’t use Performance Improvement Plans
“My first recommendation is to stop issuing Performance Improvement Plans (PIPs),” Srinivasan says. “In my experience, too many companies still depend on these, yet experts have pointed out that they don’t actually work.”
Instead of improving the relationship between employees and their employers, PIPs usually cause it to sour. Indeed, some suggest that creating a PIP does nothing but predict the employee’s separation from the organization in the coming months.
Rather than using a PIP for an underperforming employee, consider the possibility that the position might be wrong for them. Maybe management just hasn’t placed the individual in the correct role yet, but if you can find the right fit, it will unleash their potential.
“To this end, managers should identify the person’s strengths and find a role to leverage those abilities,” Srinivasan explains. “Let me give you an example. A few years ago, we hired a software engineer who had a hard time finishing his assignments on time, but his presentation and skills were stellar. We asked him to try a client-facing role instead, and he loved it. It was such a good fit that he now directs our program/product management team.”
Managers should also rethink their reliance on annual performance reviews.
#2: Rate the fit, not the employee
Many employees experience annual performance reviews as stressful and anxiety-producing, often viewing them as a colossal waste of time. Little more than tools of power and control, they don’t do much to inspire performance and much to create a defensive company culture.
“At my company, we use a quarterly grading process instead of performance reviews, and the employee isn’t the one being graded,” Srinivasan explains. “The purpose of this regular rating system is to determine how well management has found the right position for them. Sometimes, we discover we need to move employees around to different jobs or even build new ones for them.”
According to Srinivasan, when people are in the right roles, their strengths and talents come alive, and their performance and productivity skyrocket.
“For example, consider the 26-year-old who has been our Chief Technology Officer for the past four years,” Srinivasan says. “Our rating system uncovered his intense commitment, dedication, and talent early on, so we started to outline his path toward a leadership role in the organization. Without this approach, we may not have spotted him so quickly or even at all.”
#3: Adopt a philosophy of talent transformation
Meetings with members of management should focus on employees’ development and career growth.
“In my experience, too many businesses view their employees as means to an end rather than ends in and of themselves,” says Srinivasan. “Employees can sense this and naturally feel used, which breeds resentment. Needless to say, that’s a productivity killer.”
On the other hand, a positive company culture should view employees as valued members of the community who each have a different, unique contribution to make. Management’s job is to create the conditions and open up the opportunities for that contribution to be revealed. Supervisors should position themselves as mentors, not authority figures.
“The name of this philosophy is ‘talent transformation’,” notes Srinivasan. “It’s a way of foregrounding people rather than deliverables. People can learn and grow — not merely be viewed as cogs in a giant machine. Investing in regular mentoring over the long term helps ensure they feel valued and get the support they need. It also positions the organization to reap the rewards of increasing mastery and motivation.”
Engage your team, reap the rewards
Studies show that employees who are more engaged at work perform better than their less engaged peers and tend to have fewer absences and stay longer at the organization. Businesses with high engagement even benefit from fewer accidents, product defects, and theft. At the same time, they enjoy 18 percent more productivity and 23 percent higher profits.
Eschewing traditional management tools like PIPs and annual performance reviews and cultivating a company culture of talent transformation can help ensure your team is as engaged as possible. The more management mentors employees in this way, the more those employees will be able to bring their gifts to the organization. Everyone will benefit as a result.
