Over the last several years a performance management revolution has taken place, and businesses are now focusing more on the growth and wellbeing of their employees. This has led to the implementation of employee development programs that annually cost companies hundreds of billions of dollars. While it makes sense to respond to employees’ desires for growth in the workplace, many executives still grapple with how to improve the effectiveness of these programs.
The cause for the revolution? Employees in today’s knowledge-worker economy don’t respond well to techniques like command and control leadership or micromanagement. Small tech startups as well as established Fortune 500 companies like General Electric, Microsoft, and IBM, have shed outdated businesses practices like stack rankings and annual reviews, in lieu of continuous performance management strategies.
This is a cultural revolution that goes far deeper than the decision to hold annual reviews or not. Organizations must choose whether they will just assess performance or work to improve it, and whether they will create collaborative environments or competitive ones. But the number one question that today’s business leaders must ask themselves is: What do employees really need to become their best selves at work?
There’s a common saying in the business world: People don’t leave their jobs, they leave their managers. While it’s true that one’s direct manager is responsible for creating a positive employee experience, research suggests that many people leave companies not over relationships, but because they feel like they’ve stopped growing.
According to The Society for Human Resources Management’s Employee Job Satisfaction and Engagement Report, an organization’s commitment to employee development is “very important” to 40% of the thousands of employees surveyed. Yet only 25% of those employees are very satisfied with the level of commitment to development at their organization. Also ranking highly as an aspect of job satisfaction were opportunities to use skills and abilities at work (#5), and career advancement opportunities (#10).
Based on these numbers modern organizations must be intentional about employee growth and development initiatives. This takes two forms; (1) increasing the levels of skill and knowledge within a person’s current role, and (2) career development.
Thanks to the work of Carol Dweck, we now know that when an entire company embraces a growth mindset (the belief that talents can be developed as opposed to being fixed innate gifts), their employees feel more empowered and committed. But according to Dweck, when companies create competitive environments, people withhold information, don’t ask for feedback, and innovation suffers. Business leaders therefore must actively work to embrace a growth mindset and create a Growth Organization.
In Growth Organizations, the natural byproduct of working there is that every individual is continually growing and developing and becoming the best version of themselves. That is not a nice to have as a byproduct of desired business outcomes, it’s where leadership must be focused. Leaders must recognize that growth and fulfillment is an employee’s birthright, it is how we are designed to be as humans.
Technology has dramatically speeded up the timeline for new companies to bring their products to market. That means your great idea can be duplicated and your market share pilfered in months, not years. A company’s greatest competitive advantage then is its people.
Accordingly, every manager’s job is twofold; (1) Regularly communicate with employees to learn about their strengths, weaknesses, and personal/professional aspirations. (2) Create a safe space where employees readily volunteer their mistakes, opportunities, and triumphs.
The beauty is that these two goals are inter-connected. The more open communication that takes place with supportive and timely responses from management, the more vulnerable and transparent employees are willing to be. A culture of feedback will slowly start to develop, where not only are requests for information complied with, but information will be freely volunteered.
Upper management’s job is to create the frame of the Growth Organization. This emerging paradigm stems from a focus on the growth of employees personally and professionally. Through that, every member of the team can grow their personal and collective strengths, skills and abilities. The company will grow in terms of product innovation, employee headcount, customer count, and of course revenue and profitability.
Focusing on development represents a 180 degree shift in management philosophy that goes beyond putting people-first. It goes beyond perks, compensation and positive work environments. This philosophy isn’t focused on hitting the numbers, no matter the cost. It’s a renewed focus on employee development and a culture of growth.
Leaders must now create a deliberate culture, no longer looking at profit and business objectives first. While those matters are still important, leaders are now prioritizing their people and the systems that can help them thrive. Being deliberate about employee growth includes training in soft skills as well as professional development.
Employee development programs can fail when growth is not expressed as a core value of the organization. Leadership must commit to consistently listening to employee feedback, and then have every employee obtain new skills and access the latest information that is relevant to their roles.
This benefits both the organization and the individual employee, and can be done with very little cost by growing a library of business books or providing access to online repositories of information. Allocating a certain amount of departmental budgets to seminars, conferences, and continuing education can also yield a high ROI.
As mentioned above, employees deeply desire to advance in their roles. Ironically, what often holds them back is being good at what they do!
One of the best frameworks for moving an employee forward within their role is the four zones of employee performance discussed in The Big Leap, by Gay Hendricks:
1) Zone of Incompetence: Employees are bogged down doing tasks that they are not good at, and often stagnate from frustration.
2) Zone of Competence: Employees are competent, but not doing tasks that they are uniquely skilled to perform.
3) Zone of Excellence: Employees perform activities extremely well and make a great living, but are capable of much more.
4) Zone of Genius: Self-actualization (at least in the workplace) via offering one’s unique gifts.
While the goal is to move every employee along from Zone 1 to Zone 4, the common stuck point is # 3, the Zone of Excellence. This is the danger zone for managing talent. People add tremendous value here, but don’t feel fulfilled. Employees may feel afraid that if they ask to have these seemingly vital activities moved off of their plate, that they will no longer be deemed valuable or that they will be standing in the way of team objectives.
We always have to perform tasks that we find less than thrilling. The goal is for the majority of the work that an employee performs to fall within their Zone of Genius. This is work they are exceptional at performing and are deeply passionate about. You may have to find a contractor or make an additional hire to pick up the slack, but allowing someone to predominantly use their highest skills responds directly to their need for growth and development.
The other aspect of growth that employees desire is career development. But the reality is that at some companies there may not be a path for people to move into greater responsibilities and to advance they will have to look outside the company. While it may feel scary for managers to focus on career development at the risk of losing their best and brightest, this is the commitment they must make.
John Hall, CEO of Influence & Co. wrote in this Inc. article, that every workplace should serve as a stepping stone. Hall explains that training employees encourages retention but the alternative is fine too:
When employees do leave and you’ve coached, educated, and trained them, they’ll leave on better terms and be more inclined to advocate for your brand to future partners, clients, and even potential employees.
Many managers are scared of a talented employee considering their options elsewhere, that the person will get an offer and they’ll either demand to be paid more or leave. By holding employees close, you are sending the message that you care more about yourself and the pain of losing them, than you actually care about that employee’s best interests.
By giving employees the freedom to explore, you are saying, “I care about your best interests over mine”. Ironically, you end up with very little turnover because people who feel cared for tend to stick around. You may lose some of the people who interview elsewhere, but they shouldn’t be at your business anyway. We never get the best work from those we hold hostage.
When you hire an intelligent and skilled individual, those are merely indicators of how successful they can become. Of course, their trajectory can go the other way too. Only management and leadership that is committed to employee development can take existing talent to the next level by creating environments where people flourish.
Growth Organizations are unique in that people feel genuinely supported as human beings. That drives them to naturally want to improve and contribute and as a result everyone benefits, including your investors and valued customers.
David Hassell is cofounder and CEO of 15Five, lightweight performance management software that includes continuous feedback, OKRs, peer recognition, 1-on-1s, and reviews. David is a speaker and writer and was named “The Most Connected Man You Don’t Know in Silicon Valley” by Forbes Magazine. Follow him on Twitter @dhassell.