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Curtains for the final performance
Print – Issue 171 | Article of the Week

Kenny Nicholl


Each month we will be sharing four, carefully-chosen articles from the Latest Issue of our flagship publication ‘theHRDIRECTOR’ which exemplify the high standards we strive to achieve. We hope you find this in-depth article of interest and decide to become one of our valued Subscribers.

Take any conference with a keynote speaker stating that Performance Management is an annual theatrical has-been that nobody liked and few will miss, and the entire hall will nod sagely. But if our keynote was then to ask the hall; “so what is PMs successor”? And heads go down, as the collective pretend to feverishly take notes. The fact is, there is very little agreement about what to do instead.

That more people are studying at University, yet the UK is experiencing a worsening skills shortage has to stand as the strangest dichotomy in employment and commerce. The majority of firms share the same core concern and, inevitably, this has engendered a culture where businesses must fight to attract and retain talent, leading to inflated salaries, longer recruitment times, higher training costs and a rise in temporary staff as a short-term solution.

Further on down the track. We know that the skills gap is sizeable and growing, and it’s vital that businesses, academia and Government come together and strengthen their working relationships to ensure that the next generation of talent has the right practical and technical skills to meet future demand. But, while closing the skills gap calls for investment way beyond the abilities of any single, or groups of, organisations, there are practical steps that individual businesses can take to better attract and cultivate their workforce. The long-tail of the skills shortage can only be tackled with a fundamentally changed recruitment process which offers more than just salary perks to new recruits. A proven track record in upskilling staff, and the ability to demonstrate that they’re committed to employee development, is crucial in the fight to boost hiring. And when employees are through the door, a shift needs to happen in how learning and development is positioned alongside other business priorities, how performance is measured and how workers are rewarded. Only then can employers ensure talent is nurtured and staff churn is stemmed. So why isn’t this already happening? And how can businesses begin to fight back and tackle their own skills problems?

“The world’s biggest organisations ditched their annual performance reviews and set off a sea change in the world of PM. But while many firms now realise that these antiquated practices don’t work and need to go, there is little agreement about what to do instead”

It’s a sizeable problem. While commitment to training and learning is a clear route out of the skills crisis, new research has revealed that too many organisations don’t prioritise employee development, have not implemented digital learning strategies, and have either inadequate or inconsistent review processes. Most businesses in the UK are struggling to create a learning environment. Only 25 percent of HR staff say their organisations have a learning culture. In comparison, three quarters of companies don’t have one at all (11 percent), are still trying to establish one (59 percent) or report it is simply not a priority (five percent). Furthermore there is a significant disconnect between employees’ learning and their organisation’s strategic goals. While almost two in three (64 percent) UK workers understand what their company does, more than half (53 percent) don’t know how they contribute towards company goals.  And for many (25 percent) this can lead employees to start looking for a new job. These statistics make for surprising reading. And while we see most organisations at least paying lip service to staff development, too many are failing employees by not having the right tools in place to achieve a true learning culture. But while business leaders are right to be surprised by these findings, it’s not all bad news for UK Plc. On the flip side, employees are hungry to learn and that opportunities for growth are a key driver for staff retention and engagement, and often the reason job applicants decide to join an organisation. And so, firms have a real opportunity to foster a more engaged, loyal and productive workforce through a commitment to training and learning. To do this, organisations must listen harder to what their employees want, ensure that training meets real and relevant needs, and are more collaborative and flexible in how learning is delivered. Which, of course, is no small task.

When some of the world’s biggest organisations ditched their annual performance reviews, they set off a sea change in the world of performance management. But while many firms now realise that these antiquated PM practices don’t work and need to go, there is little agreement about what to do instead. There is no doubt that employees want feedback and that it’s an important part of making them feel valued, but it’s largely agreed that annual reviews are heavily backwards looking, often at the expense of improving current performance and encouraging talent. Instead, we believe that the most-savvy employers are turning to ongoing feedback instead of rigid review processes. Not least, agile and responsive feedback is a better fit for millennials and Gen Y, who are growing up and becoming leaders in an always-on environment, with greater access to real-time information, and where moving quickly and entrepreneurialism is a generational trait. But it’s not just younger workers who can benefit from more ongoing feedback – it can help everyone make incremental and more sustained progress.

Of course, all this can sound like a headache for HR and management – more work, more engagement and more report writing – but of course, giving feedback more regularly calls for time investment and employers must decide how often and in what form assessment is needed. 

But, if ongoing feedback is implemented well it should not be cumbersome. A more dynamic feedback process can be simplified, which is where technology comes in.

In all areas of commercial life, data is big business. In HR, the use of data can help us measure performance and guide training. Indeed, it’s not an exaggeration to say that companies who don’t use analysis and data and move to more consistent on-the-job learning are likely to be left behind. Used in the correct way, data can help companies understand how employees’ learn, their behaviours, how they best respond to feedback and where they are excelling or struggling. Harnessing data allows employers to personalise training and feedback in a much more sophisticated way than ever before. But, it is also necessary to fundamentally re-evaluate the way that we measure progress. Instead of standardised tick-box reviews, ongoing assessment must appraise research skills, applied knowledge and practical ability – vital in making sure that employees are skilled, not just for their current role, but for their wider career. It might be a cliche, but it’s not the data that’s important – it’s what you do with it that counts. Turning static information into actionable insights which fuels change is the real key to making data analysis bear fruit. Digital employee development systems can not only help employers harness data to inform a better approach to reviewing performance, but can help deliver more flexible training too. Online learning can help employees develop in their own time, at their own pace, and can empower staff to take charge of their own learning – something which, according to our research, six-in-ten employees say they want.

So a more flexible, data rich, approach to feedback will help create a more local, more engaged, workforce. Showing your employees that you are listening, that they are worth training and developing, and that you are committed to them, is a crucial. And importantly, in relation to the wider skills gap, it’s easier to train staff to be the skilled workers you need, rather than to spend excessively on buying in new talent from outside. So, not only will this approach benefit a single organisation, but it can be part of that much bigger initiative: to close the skilled gap and to help UK Plc remain competitive in an increasingly uncertain economic landscape. We believe that to innovate and develop the best products, solutions and services, our workers require constant learning and training, supported by ongoing feedback. This approach will also help in the quest to acquire skills capable of morphing to suit the changing workspace. Rather than encouraging the development of narrow skill sets that can – and ultimately will – be commoditised, employers have the opportunity to be laying the groundwork that encourages the development of a polymath mindset. In this environment the ability to pass a performance review – the traditional measures of success – becomes less important, and the ability to apply knowledge, learn quickly, and work collaboratively becomes crucial.

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