The war for talent is not just a “talent attraction” phenomena, this war continues when good talent joins an organization so that the best talent stays put and doesn’t drift away to other organizations, especially in today’s day and age when Millennials and Gen Z populate the workforce who switch companies if they don’t see growth and development. Performance Management can be an effective tool to win the talent war that organizations face today and organizations should look at transforming it in line with the changing business and talent needs. If not addressed, organizations face the challenge of increased costs and reduced productivity. Hence, winning the talent war is a matter of organization survival and below are some best practices on using performance management to retain talent:
- Challenging Work: Often people look for opportunities outside if they feel their current work is not meaningful enough and they don’t see themselves making a difference in the organization. In fact, one of the many reasons why people prefer to work for startups today is because it gives them an opportunity to assume challenging and interesting roles where they have an opportunity of making an impact. Hence, it’s important for organizations to carve out enriching roles for their top talent so that they are engaged and satisfied at work. At the same time, it’s also crucial for leaders to reiterate the purpose of one’s job as it helps individuals draw a meaningful connection between their job and the organization’s vision. This not only helps in retaining people but also leads to improving productivity as people who relate to the larger vision are more likely to put discretionary efforts at their job
- Disproportionate Rewards: Somewhere in the 18th century, a man named Pareto while studying the wealth in various nations observed that 80% of Italy’s wealth belonged to only 20% of the population. Likewise, most things in our lives are also not distributed evenly and Pareto’s 80/20 principle can be applied to organizations too where some people contribute more than others. Hence, while organizations should definitely reward everyone for their contributions, they should specifically focus on rewarding the top talent for their exceptional work. Stock options, retirement plans, advanced learning programs are also some of the perks that leaders should offer to people as it can go a long way in retaining people. Organizations should also look at adopting the ‘Total Rewards’ philosophy which not just aims at compensation but also offers personal & professional growth opportunities
- Empower People: Today’s young workforce seeks more responsibility & freedom at work and they want to experience the sense of being able to take direct action. This increased sense of ownership not only gives people a chance to prove their mettle but also helps foster a culture of trust in the organization. Even psychologists believe that while extrinsic rewards like money act as a motivator for people but there is also an inherent desire among human beings for autonomy and individuals who experience this are more likely to be self-determined, engaged, and motivated. Some of the ways in which managers and leaders can facilitate empowerment include communicating a clear vision, delegating work, allowing mistakes, etc.
- Accelerated Career Growth: Today, people look forward to fast-track career growth & vast amount of learning at their jobs and if they don’t see their careers shaping up in the desired direction then they are likely to move ahead. Hence, it’s imperative for organizations to create avenues for the growth of their top talent and also equip them for future roles & responsibilities. A good way to do that is invest in a robust succession planning program, it not just aids in retaining talent but also helps organizations with a ready pool of talent that can bigger and newer roles in case a situation arises without having to look at market hires
- Custom-made development plans: Creating individualized development plans as a part of performance management is another way to win the talent war as it not just helps employees to set goals to capitalize on their strengths but also aids in addressing their development needs. As part of these development plans, organizations take a deliberate approach to enhance the knowledge, skills, and experience that one may need to rise up in their career. When employees witness that organization genuinely takes interest in them as a person and invests in their overall development and growth, they are highly likely to stick around.
According to Deloitte's Global Human Capital Trends survey, 61% of people feel that finding qualified, experienced hires is the biggest challenge that they face today. The war for talent is only heating up and organizations need to find ways to navigate through this with a fresh mindset. If implemented well, Performance Management can be the key to win this war.