Five Tips for Improving Performance Management, Increasing Employee Engagement and Boosting Your Bottom Line

Recent research has shown that high employee engagement is not just a nicety, but is fundamentally essential to an organization’s success and also directly linked to the bottom line. A new study conducted by IBM shows that a single percentage point increase in an organization’s Employee Engagement Index (EEI) adds an increase of $2,936 in sales per employee annually.

The key to improving employee engagement is good performance management and employee feedback, which can be challenging in and of itself. A manager can de-prioritize performance management for a number of reasons — he may see it as an afterthought and not a key part of his own job, or may find it uncomfortable. Managers can also often make mistakes by not setting clear goals and expectations (whether for teams or individuals), or making it clear to employees how their performance is going to be measured.

Five keys to helping managers improve performance feedback are:

1. Semantics matter. Employees and managers both often think of “performance management” negatively, perhaps linking it in their minds to a Performance Improvement Plan (PIP). A better way is to describe the process as “leading high performance,” something which any good manager will consider essential to his work.

2. Keep it simple. Goals and how good work is evaluated should be clear to manager and employee. Additionally, if the process is over complicated adding unnecessary tasks, it’s more likely the process will be abandoned and user adoption will suffer. As much as possible, for both managers and employees, administration tasks should be minimized.

3. Make sure leaders are being assessed too. Managers should also be evaluated regularly by their employees, not just at a 360 or capability assessment, or by their own supervisors. Self-awareness is a critical attribute for successful managers, who should know their own strengths and shortcomings and how it can affect their work and ability to lead. Essentially, this type of feedback will help managers make the necessary shifts to become better leaders.

4. Appeal to managers at both a rational and an emotional level. If managers understand how their own metrics can be boosted by improved employee engagement, as well as feel good about how it improves their team’s overall success and employees’ happiness, then it’s easy to have them buy off on the idea of employee engagement being essential to their job.

5. Show managers what outstanding performance looks like, and what subpar performance looks like. Be specific, using role-playing or hypothetical scenarios. Metrics are essential to achieving goals, but specific scenarios help everyone contextualize good (and bad) work. Research has shown that using real-life leadership scenarios can have a huge impact on improving manager performance.

Managers hold the keys to improving a company’s Employee Engagement Index, which not only leads to happier employees and a better workplace culture, but will also directly and significantly affect its revenue. Businesses should invest time and money into helping managers be better at performance management, which will ultimately translate into increased employee engagement and boost the bottom line.