Most people know what to expect when it comes to a traditional performance appraisal, but there are some extra tips and tricks to make them as useful for your team, and ultimately, your business.
Conducting an effective employee appraisal is an essential part of managing a high-performing team. Why? Well, appraisals give managers the opportunity to evaluate an employee's performance, set future goals, and create development plans. When done correctly, appraisals provide valuable feedback that helps employees grow in their roles while aligning their efforts with the company's objectives. But, if they’re not handled properly, appraisals can feel stressful or even demotivating for employees, so it is important to get to grips with the key steps for conducting fair and constructive employee appraisals.
In this guide, we’ll take you through everything you need to know, including goal setting, providing regular feedback, evaluating performance, creating development plans, and ensuring everything is documented for HR records.
Imagine a world where employees are so engaged and satisfied that they never want to leave. Sounds too good to be true, right?
Employee turnover is a huge challenge that many organisations face, and reducing it is critical if an organisation wants to remain productive, stable, and have a motivated workforce. High turnover rates can disrupt team dynamics, increase recruitment costs, and negatively impact company culture, but fortunately, there are proven strategies to reduce employee turnover and keep talented workers engaged.
Employee turnover is the rate at which employees leave an organisation and are replaced by new employees. This includes both voluntary turnover, where employees choose to leave the company, and involuntary turnover, which happens when employees are dismissed or laid off.
Turnover can be measured over specific periods, but is typically calculated annually, and is expressed as a percentage of the total workforce. A high turnover rate can be a signal of deeper issues within an organisation, such as dissatisfaction with the work environment, lack of growth opportunities, or poor management, which is why a high turnover rate often has a negative association.
Employee turnover matters to any organisation, not just because high turnover rates come with significant costs, but because recruiting and training new employees is time-consuming and expensive. It has also been understood that high turnover can lower team morale and disrupt day-to-day operations and processes, which can lead to decreased productivity. In general, retaining employees who are engaged, skilled, and aligned with the company’s goals is far more cost-effective than constantly replacing team members, which is why organisations keep track and manage their turnover rates.
The ideal employee turnover rate varies quite significantly by industry, but a general benchmark is that a rate between 10-15% annually is considered healthy. Some industries, like retail or hospitality, naturally experience higher turnover due to the nature of the work, whereas professional services or industries that require highly skilled workers might aim for lower turnover rates.
It’s important to consider though that turnover is not always a bad thing; there are positives that come with a certain amount of turnover, for example new recruits which can bring fresh ideas and energy into the organisation. However, the key is to identify when turnover becomes excessive and detrimental to the company's success, and to take proactive steps to reduce it - and that is where our strategies come in.
There isn’t a one-size-fits-all approach to reducing employee turnover, and it definitely requires a multi-faceted approach that touches upon everything from compensation to company culture. On a daily basis, HR managers face the challenge of finding high-quality applicants and have to ensure that they retain top talent. Of course, retaining that talent will depend on the organisation, the way it functions as well as its culture - so what strategies can be put in place to reduce employee turnover?
One of the main reasons employees leave a company is dissatisfaction with their compensation or the benefits that a company has to offer. These days, offering a competitive salary isn’t enough, and many top applicants expect benefits as part of their reward package. Employees are much more likely to stay with a company that pays them fairly and provides a benefits package that meets their needs.
How can you make sure your compensation is and remains competitive?
Employees want to know that they have room to grow within the organisation. Without clear career paths or opportunities for development, employees can often start to feel stuck, or as though their role has gone stagnant, and may start seeking new opportunities elsewhere. Giving employees the tools and motivation to progress in their career can boost employee engagement, improve their skill sets, and reduce turnover.
How to support employee growth:
Although it may seem obvious, company culture plays a big role in employee retention. It goes without saying that a supportive, inclusive, and positive work environment makes employees feel valued and connected to their colleagues. On the other hand, a toxic or negative culture can push people to leave, even if they are satisfied with other aspects of their job.
How to build a great company culture:
When employees resign, exit interviews offer a unique opportunity to gain valuable insights into the reasons behind why they want to leave. These interviews can shed light on potential organisational problems, such as ineffective leadership, lack of development, or dissatisfaction with pay, which can all help to shape and drive actionable change to reduce turnover.
How to get the most from exit interviews:
While employee turnover is an inevitable aspect of business, excessive turnover can significantly harm productivity, morale, and financial performance if it continues for too long. To mitigate these negative effects, organisations must take a proactive approach to address key factors such as compensation, career development, company culture, employee recognition, and exit interviews.
Remember, employee retention isn't just about keeping workers in their roles, it's about creating a workplace where people want to stay, grow, and thrive.
Get in touch with GoodShape today to learn how our services can help you retain top talent through absence management and health monitoring.