Staff turnover can be costly and a key contributor to sleepless nights! Organisational turnover costs per person range between 90 and 2000 percent of a person’s annual salary (source EOWA www.eowa.gov.au ). In addition to the direct financial costs there are factors to consider such as morale of the remaining staff, scarcity of skills and experience here on the Sunshine Coast and your reputation in the market place as a good or poor employer.
The key to growth and long term development in today’s business world is long term investment in the most precious assets of your business – your people. The benefits of implementing a simple, fair and motivational performance management system are numerous and provide a direct link between productivity and profit (through companywide integrated objectives, key performance indicators and competencies).
Gone are the days where Bruce is invited into the office for his annual appraisal, given a slap on the back and a 5% salary increase and it’s all over in 15 minutes (at least we like to think these days are gone). Managing performance is part of the day to day role of any people manager and setting, agreeing and reviewing objectives should be a regular and constructive occurrence.
Even before we get to setting objectives, ask yourself how effective your employee induction program is (if you have a one)? Even if you only have one employee, their perception and impression of you as an employer will be made and fairly well set on the first day they set foot in the door so aim to make it a positive and lasting one.
I have been involved in designing and implementing performance management systems since 1994 for small and large businesses alike and am a strong advocate of everyone having a clear set of objectives, a personal development plan and a framework for being recognised and rewarded, regardless of the size of business.
It pays to keep your staff motivated and productive by developing their skills, attitude and knowledge within a performance management framework. As a result, some of the many benefits you can expect to achieve include :-
- an increase in motivation and morale as staff have clear roles and responsibilities
- a reduction in duplication of work and effort as objectives are clear and integrated
- a direct link between operational, management, director and executive objectives starting from the top down
- a greater sense of ownership as employees are involved in the design and implementation of the performance management system
- fewer issues with staff turnover as human resources and career development is proactively planned