We know that it’s critical to measure and analyse revenue & profit, the costs of providing your service or product. You need to understand your cash flow. Measuring customer satisfaction makes sense too.
It’s equally important to measure the activities associated with managing the people in your business and to measure employee satisfaction and engagement.
This should be something that you take seriously in your business, no matter the size. It’s important to understand that employment-related costs are usually the single greatest expense for most businesses (research suggests it can be 60-75%)
Employee turnover costs more than most people realise. There are many indirect costs that are usually overlooked as they are hard to quantify and measure. The cost of replacing staff can vary greatly from business to business and depends on a whole range of things but some things to consider are:
- Loss of productivity from employees taking on duties of the vacant position or employees involved in the recruitment process
- Cost of advertising the vacancy (could be the cost of a recruitment agency or the cost of doing it yourself)
- Cost of testing, reference checking, pre-employment checks
- Cost of administration of processing the termination
- Training/orientation/induction costs
- Loss of productivity in the early stages of employment while the new employee is learning the job & in the final stages of employment of the employee leaving the organisation
- You might need to temporarily fill the vacancy
Here are 5 things to consider for managing performance, keeping existing employees happy and avoiding the added costs of poor performance, employee turnover and recruiting new staff.
1 Managing Expectations
Providing policies, position descriptions and KPIs will help employees understand what you expect.
Workplace policies tell employees what you expect from them. Your workplace policies should cover things like how an employee should represent your business, how to apply for leave, expectations on conduct and performance, entitlements, use of social media, bullying, harassment and discrimination.
Employees that have a position description and KPIs to guide them in performing their work have a clearer understanding of what you expect of them.
2 Predictable, consistent communication
Good performance management recognises and rewards employees when they are performing well but also supports employees to improve if their performance is not up to the required standard.
Performance management should be an integral part of your ongoing communication with your employees. It’s more than just doing an annual appraisal; give your employees continual feedback throughout the year. The annual appraisal should be the formalisation of regular, ongoing communication.
Performance appraisal should focus on the behaviour or attitude the organisation wants from its employees. This should be based on the organisation’s culture, values, mission and vision.
If you need to address poor performance or conduct, make sure you have a process that is clear and ensure employees are aware of that process. Be consistent, set clear goals and a plan for improvement. Monitor progress. Follow up.
Consistency is the key. Quite often, business owners and managers are unsure of the process of managing performance. An effective and robust performance management system provides managers with the tools to facilitate appropriate communication. This applies for both encouraging excellence and improving performance, conduct or attitude.
Workplace culture has a huge impact on employees within a business.
Engagement is linked to performance, productivity and profitability. Happy people are more productive and more willing to put in a little bit extra and go the extra mile for your business. Workplaces where employees are engaged, happy and satisfied are more profitable than competitors with lower staff satisfaction.
What makes an awesome work environment?
- Employees wake up in the morning feeling good about going to work
- Employees have a sense of ownership and accountability for achieving objectives
- Employees are respected and valued
- Managers seek feedback from their teams and implement useful, great ideas
- Employees can take ownership of their goals and career progression
- Your values are aligned to the values of your employees
Transforming your business into a great place to work isn’t hard. So, it’s surprising that so many workers are unhappy.
Here are 5 top tips to ensure you have happy people working in your business:
- Seek feedback: Use an anonymous survey, such as the STAR Workplace program, to identify issues and provide your people with a confidential platform to share their suggestions and struggles. If you don’t ask, you won’t know.
- Collaborate on culture: Get your people involved in creating a clear and compelling company culture. When workers’ values and objectives align with the company culture, their attitude and output soars.
- Add great perks: Do your people want weekly yoga classes? More social dinners? A relaxing retreat area or more salary sacrificing options? Ask what would make work a better place to be and then action it.
- Start a mentor program: Ensure your workers don’t feel forgotten. Team up employees with a mentor, who can check in to see what’s motivating or frustrating them. Offer training and development to add to their skill set. Valued workers are happier, healthier and more productive workers.
- Celebrate: Whether it’s a birthday, work anniversary or hitting individual or team targets, celebrate it. We all like to feel significant and appreciated for our efforts. And if your staff enjoy coming to work you’re well on your way to creating an awesome company culture.
4 Employ the right people
Make sure you are attracting the right people into your business when you are recruiting. Work hard on retaining good people. Employ people whose values align with your values. Reference check candidates and ask their referees meaningful questions. Find different ways to reward staff and encourage them to provide feedback and ideas for improvements.
5 Training & Development
Employees feel valued if you invest time and money into developing their skills.
Determine the training and development needs for each employee. When determining these training needs you should take into account:
- Can you identify any skills deficiencies in an employee’s current job skills set that need to be addressed?
- Is there any training that will assist an employee to progress to the next level, learn new skills, take on extra responsibilities?
- Can any of your employees take on a mentoring role to pass on knowledge & skills which can assist in improving efficiency of everyday processes?
- Are there opportunities for your employees to attend seminars or other industry events where they can learn from others?
For further expert advice on human resources or if you have any questions about anything HR related, get in touch.
Karen Hillen is your HR Partner, she helps businesses by providing HR support and advice services.
For the right HR support and advice, book a My HR Partner HR Advice call with Karen Hillen.
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