3 Ways in Which Employee Evaluations Positively Affect the Running of Your Business

If you are a business that doesn’t conduct performance appraisals, then you are missing out on all the positive ways that they affect the operation of your business. Employee reviews help both the staff and the company by encouraging open communication and by clarifying goals and expectations. They also help to identify the employees’ strengths and weaknesses, which allows the management team to create action plans to rectify their shortcomings while further developing their strengths. That is why forward-thinking companies do their best to regularly conduct innovative appraisals that maximize their results, the employees’ performance, and the company’s profits.

In this article, you will find three ways in which employee reviews positively affect the running of your business.

But first, what does an efficient performance management system accomplish?

Just as all companies have their own set of cultures and values, they will also have a unique approach and techniques they use when it comes to performance management. However, despite all the different methods, all performance management systems have the ultimate goal of improving the organization’s efficiency, “while sup­port­ing per­for­mance, pro­duc­tiv­i­ty, and the well­be­ing of its employees.”

Ultimately this means that the end goal is to marry the company’s goals and ambitions with that of the staff so that “per­for­mance man­age­ment and busi­ness objec­tives entwine with employ­ee well­ness and morale.” Because when management shows that it cares about the personal growth of its employees, not just the company’s bottom line, employee motivation, engagement, and loyalty go up.

Encourages Open Communication

For an organization to function well, there must be communication between managers and their staff. Employee appraisals are the perfect occasion for employees and managers to have an open discussion about work-related issues.

When managers actively communicate with their team members:

  1. Creates understanding: Managers can learn about each employee’s responsibilities, which means they’ll have a better understanding of how each team member contributes to the teams and the organization’s success. In this way, team leaders can create strategies to boost productivity using their team’s strengths.
  2. Generates Confidence: Through two-way communication, employees can learn to rely on and seek the assistance of their superiors. With this, they can provide more constructive and precise guidance that results in increased productivity.
  3. Positive management-labor relationships: When employees feel heard and supported by their executives, it results in an increased sense of teamwork, job satisfaction, and employee loyalty.
  4. Engagement: Employees who communicate with their Management and have positive relationship are generally more productive and engaged in their employment.

Nurture Employees Through Goal Setting

Employee reviews allow management to develop their teams. They do this by first allowing supervisors to identify what each team member’s strengths and weaknesses are. Secondly, they enable managers to have an open discussion with their team members about their professional goals, the overall department’s goals, and company goals. After which they can discuss how to best collaborate with their staff to achieve both their personal goals and the company’s. With regular appraisals where managers can proactively develop their team by discussing, creating, and following up on action-plans they can fully cultivate their team’s talent.

In addition, when employees feel that they are directly involved in the development of the company, then they become more motivated to do their work. When management involves employees in goal setting, research strongly suggest that they are more engaged than their counterparts. An engaged employee will produce higher quality work meaning higher customer satisfaction and therefore improved sales.

Career development through performance appraisals is an opportunity that should not be missed by management. It does not only play a role in motivation and engagement. But also, it helps to attract new talent and keep employee turnover rates low.

Professional growth is such a high priority that 42% of employees rate development as the most crucial benefit when choosing their employer.

At the same time, “offering career training and development would keep 86% of millennials from leaving their current position.”

Boosts Motivation

Performance reviews are a powerful tool for employee motivation.

According to Forbes, 26% of workers agree that feedback from managers helps them to be more efficient, while 14% find that feedback inspires them to improve the quality of their work.

Therefore, it is clear that employees want to receive regular feedback from their managers so that they can develop the areas in which they excel and the areas where they have room, from growth.

Another way in which employee reviews motivate employees is by allowing supervisors to acknowledge the work that their team members do face-to-face. Direct recognition from management is a powerful tool for motivation and very beneficial for the company. A simple job-well-done from their superiors motivates 69% of employees to work harder, boosts employee morale, and reduces staff turnover. A 2018 study from TINYpulse found that “21.5% of workers who don’t feel recognized for doing great work have interviewed for a job in the past three months vs. 12.4% who do feel recognized.”

Are you a business that needs help with their employee appraisals? Do you need someone to help you create an effective appraisal process or to conduct reviews on your behalf? Then the GRS Group is the right choice for you. With a combined experience of 95 years, we have a deep understanding of what makes a productive employee and how to motivate and guide them to become better when necessary. Give us a call or email us so we can discuss how our team can be of assistance.