Are you making the most of the investments you make in your employees?
In many industries, employees account for easily the company’s largest cost percentage, but are you really getting the most from your investments?
What if there was an easy way to firmly embed the relationship between corporate strategy and individual employees’ targets and priorities?
What if you could ensure that skills development is needs-driven and based on the enterprise’s strategy, while looking after and developing valuable employees so as to keep staff turnover at a minimum?
The result is employees who are more motivated, more productive, perform better, and who stay longer in the job.
Employees want to have clear management with unequivocal, specific targets, ongoing follow-up and recognition, along with a skills development plan and fair feedback.
The employee appraisal – as a main pillar
We use the employee appraisal as an important tool for communicating direction, establishing ownership of corporate and individual targets, looking after development needs, identifying emerging talents, etc. The advantage of employee appraisals is that there is no need to introduce brand-new management processes to achieve the above – all we need to do is to raise the existing process to a strategic level where we ensure that the individual’s targets and priorities are aligned with the enterprise’s overall objectives.
Ongoing follow-up secures good results
While annual employee appraisals are important, they provide little value if the agreed initiatives and targets are not discussed and followed up throughout the year. Lack of feedback and follow-up leads to low commitment among employees. Regular meetings and status reviews between managers and staff, with feedback and guidance, stimulate each employee’s commitment and performance. The status of targets and initiatives must be monitored and any adjustments made on an ongoing basis to ensure good results. Managers and employees determine the frequency of the meetings based on complexity and needs.
Systematic approach that creates added benefits
The benefits of working systematically with an IT-supported process are extremely wide-ranging and profitable – and the effects can be quantified.
Improved efficiency – is achieved through managers, employees and HR spending less time on preparing, holding and following up employee appraisals.
Cost savings – are achieved as a result of
- reduced staff turnover
- more targeted use of funds earmarked for training and skills development
- more targeted bonus payments
Improved productivity – is achieved as a result of a more focused process, where clear targets and the interrelationship of targets from top to bottom is key. A 5–10 per cent improvement in productivity is achievable.
An example of profit analysis – company with 500 employees:
|Benefit category||Annual profit(SEK)|
|1. Improved efficiency||560 000|
|2. Cost savings
1 000 000
|3. Increased productivity||10 800 000|
|Sum||13 060 000|
Source: Profit analysis – Employee appraisals process embedded in system, white paper, CatalystOne, 2008.
CatalystOne Solutions has helped Scandinavian businesses to achieve exactly this for a number of years, based on a combination of cutting-edge expertise within the area, best practice and tried and tested IT solutions.
Author: Magne Tveter