You will agree that people build businesses and are the most important business resource that a company could invest into.

Unfortunately, though there is no single process that reflects how each employee is pushing the envelope – contributing to their company’s profits and growth. This is one of the main issues business leaders and HR managers face, and look to solve.

A critical factor contributing to this missing link between employee performance and business outcomes is this:

The design of performance management itself!

The traditional model is prone to bias and lacks accuracy. It is a backward reflection of ‘how the year has been’, rather than a forward-looking view of ‘how to achieve this year’s goals’. Most employees think of the whole appraisal process as a very tedious and non-fruitful exercise. Something that HR must do, and others have to do, just to toe the company line.

Here are 4 ways in which organizations could solve this problem:

  1. Set clear goals
  2. Ensure transparency
  3. Create a healthy work environment
  4. Take feedback proactively

Set clear goals

A lack of understanding of what needs to be achieved will confuse employees. Ensure that your workforce understands the organization’s objectives, and identifies goals that are meaningful in the larger Organizational context. Set clear and tangible goals and steer clear of ambiguity. Help employees understand the significance of their roles, and the impact it has on the business as a whole.

Ensure transparency

As an employer, you owe a transparent, fair and seamless performance review to your employee. Adopting a process-driven approach to appraisals – well defined KPIs and KRAs, at every level is a pre-requisite. If necessary, introduce a multi-reviewer model of appraisals, to make sure no one manager’s prejudice comes in the way of a good review. This builds trust and prevents surprises.

Create a healthy work environment

Encourage employees within teams to work together to achieve team-level goals. This way, individual strengths can be leveraged and weaknesses offset. Encourage healthy competition and create an environment where they can exchange ideas and grow together. Invest into an exciting work culture, based on positive reinforcement and mutual-appreciation.

Take feedback proactively

Listen to your employees, their needs, ideas and issues. Water-cooler conversations are often loaded with employee feedback that goes nowhere. Harvest such opportunities as a means to understand how your employees commit to the organization. Remember, happy employees are more motivated and productive – and that means better profits for the Organization. It’s clearly a win-win situation.