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Read time7 mins

Key benefits of performance development in the workplace

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Businessman ascending a long staircase towards a bright, clear sky, symbolizing the benefits of performance development.

Decoding performance development: Why it matters

Most organisations have some kind of performance development process in place, but do they really make a difference?

Discover whether your organisation really needs to be doing performance development, and the impact it could be having on engagement and retention.

Understand the true role of performance development reviews, and the role of clear feedback in job satisfaction.

Explore the key leader behaviours around performance development that can foster employee growth and wellbeing, leading to greater productivity and organisational success.

Harness the power of performance development

Watch the video to understand the role of performance development, how performance development impacts employee engagement and performance, and why organisations need to optimise their systems for feedback.

Step 2 - Understanding the challenges of performance development

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The purpose and impact of performance development

Hi, Andrew from SACS, and welcome to video number one in our seven video series on Performance Development, including 360 degree feedback.

We are dealing with why do we do it?

Firstly, what is the reason that we undertake performance development?

We’ll then be raising the question as to why most performance development doesn’t work, what does work, using goals in performance development, job definition as goals for performance development, performance conversations, and 360 degree feedback.

Why do performance development?

There are two main reasons that most organisations do performance development.

The first one is what we might call governance.

And governance really is the question of whether people are doing what’s necessary to earn their salaries.

Are they performing their roles in such a way that the organisation is getting fair value, and they’re contributing to their colleagues, they’re contributing to the goals of the organisation?

So that’s one reason.

Second, of course, is development, which is where people undertake performance development in order to ensure that people grow their skills, grow their well-being, and become better employees of the organisation in an overall holistic well-being kind of a sense.

Does it matter?

Well, in fact, there’s strong research evidence to say that it does matter.

This is an old study, 2002.

And the only reason we haven’t brought you a newer study is because little has changed in terms of what we know about performance development.

We know, for instance, that good performance development improves performance by up to 35% or even more by things like emphasising performance strengths, providing fair and accurate guidance, being knowledgeable about employee performance, and providing feedback that helps employees do their jobs better.

There’s also evidence that good performance development increases attraction and retention, increases career optimization.

In fact, it makes you a better employer.

What happens when you do performance development badly

But doing it badly, in fact, is worse than not doing it at all.

So for instance, lip service, where you’re sort of saying, ‘We do it,’ but we really don’t.

What that tends to do is it tends to devalue the entire process in the eyes of employees.

And that’s bad because one of the things that we absolutely know is that employees want to know how they’re going, but as well as that negative messages.

Negative messages are things like, for instance, when you’re bringing people down, you’re saying, ‘When you did this badly, you did that badly.’ That can actually undermine their performance and demoralise them.

So lip service or negative performance development is in fact worse than not doing it at all.

Reasons why people leave their jobs

Now, this is an interesting piece of statistics (refer to the video) because what it does is it shows the results of a study which SACS undertook, where we measured 2,000 people here in Australia and New Zealand.

And we measured why they left their last job.

So we asked people to comment only if they were recently departed from a job or they could remember why they left that job.

And the number one reason was a kind of an exciting and positive thing.

About 34.5% of them left to move to a more exciting opportunity.

But I think in terms of the topic that we’re talking about here today, in terms of performance development, look at number two.

33% left their job because they had an absence of clear performance feedback.

People want to know how they’re going, and they want to know how you think they’re going.

So performance guidance, performance development is absolutely crucial.

The role of engagement in performance development

Now, in addition to that, there’s a relationship between effective performance development and a thing called work engagement that has three characteristics.

The first is vigour.

When employees are highly engaged, they are vigorous and energetic in the way that they undertake their tasks.

The second component is dedication.

So they’re dedicated and committed to what they do.

They think it’s important.

They try hard, they try to improve their skills.

And the third is where they get kind of engrossed or happily involved in their work to the point where time flies.

So that’s what’s called absorption in the research literature.

Vigour, dedication, absorption.

If an employee has those three things, they tend to perform better.

They tend to be able to get through their work in a more happy and comfortable kind of a form.

They tend to be less stressed.

They tend to be more resilient psychologically.

So there are a number of benefits from engagement.

And one of the things that we know is effective performance development helps people to be highly engaged.

What increases levels of engagement?

Here’s the results of a study that we undertook in partnership with Deakin University going back some years ago (refer to the video).

We measured the levels of engagement of about 2,700 people across Australia and New Zealand.

And we measured the leadership behaviours that they experienced.

And what we found was that we could predict their levels of engagement with about 25% accuracy by virtue of understanding the leadership behaviours that they encountered day to day in their work.

And you’ll notice that there are a number of things here, 10 of them, in fact, we found to be statistically significant.

And some of these things are about creating a learning environment, being supportive and helpful and kind to them, fostering teamwork, which is encouraging them to work together, empowerment, which is giving them the opportunity to have input into the way that they do their work.

But in fact, the next four are really interesting because they are all about accountability, creating clarity about appropriate behaviours, effective management of behaviours, so that’s when people are not behaving well, how do you respond to it, creating clarity about performance standards, and effective management of underperformance, and then celebrating success, and optimism and positivity.

So if you look at these 10 behaviours for leaders, what you would say is that six of them are kind of kind things associated with growth and development and empowerment.

But four are about accountability.

Now, I think performance development contributes in both of these senses.

Good performance will create an accountability framework.

And let’s not kid ourselves.

Employees want this.

They want to know when they come to work what is acceptable and what is unacceptable.

And they’re going to be prouder of their employment if they believe that the organisation actually stands for something.

People are not proud of an organisation that stands for nothing.

So learning, development, but then accountability, that combination seems to be really powerful.

And good performance development can contribute to that kind of environment, which in turn contributes to morale, engagement, well-being.

Now, having said a bunch of things about why we should do performance development, the very next video in this sequence is addressed to why does most performance development not work?

I’m not making this up, am I?

I mean, most people that I speak to, and I speak to hundreds of organisations in the course of a year.

Most organisations don’t like their performance development system.

They don’t think it works very well.

So in the next video, join us to find out why that is.

Time to optimise your performance development process?

Step 2 - Understanding the challenges of performance development

If you’d like some help with refining your performance development processes, contact us about our 360 Degree Feedback tool.

Boost performance with 360 degree feedback

360 degree feedback is a powerful tool that can be used for a variety of purposes, including:

  • Individual performance management
  • Group or organisational performance assessment
  • Leadership behaviours and development

Gathering multiple perspectives allows you to strengthen the performance of individual team members as well as teams, departments, and your entire organisation.

Discover how our 360 Degree Feedback tool can help maximise your organisation’s effectiveness.

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