Traditional performance management may not be as effective as HR leaders once thought it was. So suggests a new survey published yesterday by employee recognition company Globoforce and the Society for Human Resource Management (SHRM), who polled nearly 800 HR leaders and found that four in 10 think performance reviews are poor indicators of employees' performance.
Better than those based on traditional performance metrics, the "2016 SHRM/Globoforce Employee Recognition Survey
" suggested, are rewards and recognition tied to organizational values, which are perceived by HR professionals to drive more and better business outcomes.
"Organizations that dedicate 1 percent or more of payroll to values-based recognition programs are more likely to perceive a strong return on investment, instill and reinforce corporate values, and maintain a strong employer brand," Globoforce and SHRM concluded.
Specifically, they found that 60 percent of HR professionals said their organization has a values-based recognition program that recognizes employees for behaviors that align with the company's values, up from 50 percent in 2012. Among them, those who dedicate 1 percent or more of payroll to their values-based recognition programs are:
• Nearly three times as likely to rate their program as "excellent" compared to HR leaders whose companies spend less;
• Three and a half times more likely to say their program helps their company attract new job candidates;
• Nearly two times as likely to say their program delivers a strong return on investment; and
• Twice as likely to say their program helps their company retain employees.
This is significant, SHRM and Globoforce argue, because HR professionals cite employee retention and turnover as their biggest workforce management challenge as workers emboldened by an improving economy gain more confidence to explore new job opportunities.
"In order to be successful, organizations need to win the hearts and minds of employees," said Globoforce CEO Eric Mosley. "A more human-centric approach, where employees are treated not as human capital, but as people, fosters greater humanity and creates more positive employee experiences. It's also crucial for HR leaders to take a fresh look at compensation structures and evaluate the value they bring to employees and their respective companies. As our study shows, social recognition can directly impact employee experience and financial outcomes."