As we round the corner into a new year, it’s natural for managers to start thinking ahead and strategizing the company’s next moves. Where should you go from here? What larger goals should your team focus on? What does company-wide success look like over the next twelve months?
But it’s important to remember your team members are thinking this, too—just on an individual level. They’re also thinking about where they should go from here, what larger personal goals they have, and how they can grow over the next year. Year-end performance reviews are a critical part of that process as it crystallizes in their mind how the company views them and shapes their thinking over whether they’re valued. In short, the end of the year is a crucial time for team retention.
I’ve seen plenty of managers get caught up in their goals for the upcoming year only to overlook the importance of their team members in achieving those goals. This complacency when it comes to employee retention strategies can kill any long-term efforts toward the success of the company. What’s more, you’re losing out on an opportunity to gauge employee sentiment and learn how you can keep your best team members on your side.
Traditionally, year-end performance reviews have been one-sided affairs where an employee is called into an office and asked about their performance while managers suggest ways to improve.
In many of the companies I’ve worked with that showcase a high degree of team retention, they’re now implementing employee engagement surveys as part of the process. This gives them key insights into workplace dynamics and employee satisfaction and strengthens trust.
And let’s be honest, when you know what is making your employees dissatisfied, you can keep them around by taking action to remedy it. This means your goals for the year become aligned with your team’s, making them much easier to hit.
Why Employee Growth Plans Are Essential for Retention
Your team members start as eager employees, looking to make a good impression and carve out a niche for themselves within your staff. However, this doesn’t last forever. Over time, it will wear off, and they’ll become comfortable in their role and eventually complacent or even bored.
If they get to this stage, it’s harder to figure out how to engage them again. They may be skeptical of company efforts and may be resistant to change. That’s why a structured employee growth plan is essential for retention.
Employee growth plans map out the path an employee can take through your organization and highlight specific goals and skills to develop. Offering training programs, mentorship, and other learning opportunities keeps them from feeling stagnant and without any forward progression in their career. Most importantly, if a fantastic team member feels they’ve maxed out their growth at your company, they’re likely to start looking for that growth elsewhere.
Improving Team Retention Through Engagement Strategies
Imagine this. You walk into the office one day only to hear from your HR manager that a top-performing employee, vital for a current project, has just put in their notice. You’ve got a few weeks left with them before they depart, leaving a void of talent and knowledge, and now your other team members will have to pick up the slack. Hopefully, the project will still get delivered on time, but that’s now questionable.
I’ve seen this nightmare scenario play out all too often at various companies. How could this have been prevented? What could have been done to keep them on your team? My answer is usually that they needed to figure out what was causing the concern before there was a problem. In the case of team retention, finding out involves employee engagement surveys.
Using engagement surveys can grant you insight into which employees are happy in their roles and, most importantly, what you can do to improve their job satisfaction. It’s not always just increasing their salary or adding office perks like free donuts or coffee, either. For instance, 33% of employees leave a company to seek new challenges. Improving employee engagement is about much more than just placating them with extras. They need to feel a sense of upward trajectory, and they want to feel recognized and valued.
Using Employee Engagement Surveys to Shape Feedback
Employee engagement surveys serve as a communication and feedback channel between management and team members. Management can gauge how the team and individual employees feel about particular policies, the overall workplace environment, employee workload, and a host of other issues. A well-designed employee engagement survey shows you how you can improve in the eyes of your team and keep them on board.
Crafting a survey to get unfiltered responses from employees can be tricky. But in my experience, the best surveys ask about specific work areas (leadership, recognition, workload), ask questions with a mix of metrics (rating a statement from 1-10 as well as incorporating open-ended questions), and make it clear why the survey is being conducted.
You’ll also want to ensure the survey responses are anonymous and that you’re using simple, direct language in your questions so that employees aren’t thrown off by overly complicated phrasing. This lessens the risk of you receiving unhelpful responses.
Performance Reviews as a Tool for Career Growth
As I mentioned earlier, no employee wants to feel in a rut at work. If they do, their productivity will diminish, and they’ll start feeling like greener pastures lie elsewhere.
While conducting year-end performance reviews, make sure you focus them on skill-building and career progression. With newer employees who have only been in their role for a year, this is straightforward. Management and the employee can both see areas of growth and where new learning needs to take place while the team member has been settling into their role.
However, for employees in their role for a few years, it may take more work to discern this. They’re doing well. They’re a valued team member and have proven their worth, but they still need to see a path forward to imagine a future at your company. To achieve this, you should give them actionable goals to work toward when they leave the review. If you’re going to provide them with new projects that will require building a new skillset, make sure they have a clear path to gaining that skillset and will receive feedback on their progress along the way. They’ll have a definite idea of how they can move up at your company and in their careers.
Measuring Success: Metrics for Growth and Retention
I mentioned engagement surveys earlier, and these are a great metric to use for tracking growth and retention. You can turn the responses to these surveys into engagement scores in particular areas so that you get qualitative data about where to improve your employee retention efforts.
Another important metric to watch closely is your organization’s turnover rate. According to Gallup, 42% of lost employees are preventable losses, and with the replacement of a lost employee costing anywhere between 25% to 100% of the lost employee’s salary, a high turnover rate can cost your company dearly.
It varies significantly by industry, but an average turnover rate could be 19%. However, a good turnover rate is more like 10%. If employees are leaving, they’re unhappy about something.
Whether that’s a lack of recognition, a lack of challenges and career momentum, or an overload of work can be determined from survey responses. Most importantly, though, you’ll need to act on those responses to keep your turnover rate down.
Key Takeaways for Leaders
To maximize employee retention, company leaders need to understand the importance of performance reviews and engagement surveys. What’s more, they also need to know how to use them to create an effective employee growth plan in a way that boosts retention.
The companies I’ve worked with follow a multi-pronged approach of regular performance reviews that leave employees with a defined trajectory for their future growth and engagement surveys to stay on top of team sentiment. This allows for both employees and management to know where they stand and helps them be responsive to changes in the workplace.
Following these strategies drives long-term success for the groups on both sides of the workplace coin. Engaged employees are highly productive, and this feeds into your team retention, which improves your organization’s bottom line, not to mention your public image as a great place to work.
If you’re interested in learning more about how to leverage the team retention strategies I’ve personally seen produce successful outcomes elsewhere, be sure to sign up for my monthly newsletter. It’s bursting with powerful insights and tips on putting together and maintaining a high-producing team.
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