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Traditional business practices are being shaken up. Many companies are reviewing their long-held traditions in favor of more agile, responsive ways of managing their workforce. Some of these changes include providing employees with flexibility to work from home more often, developing teams that blend permanent and contract employees, and leveraging technology like Skype for Business or Yammer to better communicate and share information among team members and even the entire organization.
One area experiencing a large transformation is performance reviews. For decades, the prevailing wisdom has been that a big annual review at the end of the year is enough to let employees know how they’re doing. However, this is no longer true – both contingent and full-time employees are demanding more frequent and detailed feedback on their work, and managers are responding by making their review practices more flexible and engaging.
If your company hasn’t updated its performance review practices, it runs the risk of losing top talent to companies that build feedback into their regular business functions from week to week. Also, you’ll miss out on the valuable chance to identify and develop employees’ professional skill sets.
According to a recent survey by the Institute for Corporate Productivity, 67 percent of the 244 companies surveyed said that they are rethinking their current performance management practices – and 59 percent of these companies are doing so because of employee feedback.
As you begin to focus on business planning and employee goals for the coming year, consider these four ways you can modernize reviews at your company:
1. Make performance an ongoing conversation
Instead of saving comments for the annual review, find ways to provide feedback and discuss priorities with employees and contract workers on a regular basis. You could hold biweekly, one-on-one check-ins with employees, discuss goals or accomplishments at the beginning or end of each quarter or provide opportunities for group discussions at weekly team meetings. Regular check-ins help employees feel that their managers are committed to them being successful workers, which in turn helps them be more engaged and motivated to do their best work.
2. Embrace career pathing
Career pathing is a strategy that actively invests in and develops your employees to thrive in their current and future roles. It is an intentional approach as opposed to a reactive one – instead of managers passively learning of an employee’s goals at the company, they take a participatory role in professionally developing the individual. Through career pathing, managers and employees sit down and learn of the employee’s professional aspirations at the company and then set a tangible plan for helping the employee reach these goals.
3. Create an open culture of feedback
Reviews that benefit both employee and employer are based on honest, open communication, and this is only possible when there is a culture of workplace transparency. Employees, whether they are permanent or contingent, should feel comfortable expressing their concerns, and criticism should be communicated in a way that is constructive. If employees feel that they are always one misstep away from being fired, or that their managers are not honest with them, reviews are more likely to further cement negative feelings instead of paving the way for constructive team-building. Company leadership can do their part to create an open culture of feedback by keeping employees in the loop on workflow changes, encouraging employees to voice their concerns and recognizing workers who aren’t afraid to ask for help.
4. Ensure reviews are fair
Only 29 percent of employees strongly agree that their performance reviews are fair, according to Gallup. The organization found that one main reason for this is reviews that are held just once a year fail to take into account all the changes that can occur in responsibilities, workflows and personal lives over the course of 12 months. Gallup also suggests that when conducting reviews, managers consider the expectations of the role compared to the time and resources employees actually have to fulfill these duties. The benchmarks employees are judged against should be realistic and fair.
Performance reviews are integral to employee success, but expectations have changed in the 21st century. Employees want reviews that are frequent, constructive, authentic and fair – and companies that update their review processes to match these needs are most likely to retain top talent.
Recent CDI Analysis
“Performance reviews are integral to employee success, but expectations have changed in the 21st century. Employees want reviews that are frequent, constructive, authentic and fair – and companies that update their review processes to match these needs are most likely to retain top talent.”CDI Corporation
Employment Situation (U.S.)
For much of 2017, the expansion of job growth throughout the U.S. trended steadily upward. There were only a few notable instances of slowdown, such as the hurricanes that hit Florida, southeast Texas and the Gulf Coast area in late summer. Per the latest numbers from the U.S. Bureau of Labor Statistics, the year ended with jobs gained as well, albeit at a more modest pace: 148,000 total nonfarm jobs were added in the month of December. The employment rate, meanwhile, remained at 4.1 percent during the same period, holding fast to the level it initially dropped to in October.
CNBC noted that the December figure for employment creation did fall short of numerous projections, and represented a drop of more than 100,000 jobs from November 2017, during which revised BLS numbers state that the economy added 252,000 jobs. These economists and other experts had expected a gain of about 190,000 new positions. However, the relative shortage of workers available to fill jobs – as evidenced by static 4.1 percent unemployment, and a similarly steady labor force participation rate of 62.7 percent – began to take its toll.
The industries driving the job gains that were seen in December 2017 were in line with those that fueled employment growth for much of the year. Healthcare saw the largest single sector-wide expansion, with 31,000 positions created, though construction was not far behind at 30,000 jobs added. Manufacturing, as well as food and drink services, also saw statistically significant job creation, with both of these fields adding 25,000 new roles to their nationwide payrolls. Professional and business services saw little change, adding 19,000 jobs over the month.
Many of the other major sectors tracked by the BLS, including mining, information and government did not see any noteworthy growth or contraction. Retail trade proved to be the exception, with a decline of 20,000 positions. This may appear surprising, given that MasterCard recently announced a record-setting 4.9 percent increase in holiday sales across the U.S. Yet that drop was in line with 2017’s trend for the industry, as it lost 67,000 jobs over the course of the year, a reversal from the 203,000 retail positions added in 2016. David Berson, chief economist at Nationwide, told The Washington Post that the continued rise of e-commerce may have helped that decline.
"That’s a notoriously volatile number around the holiday season, but it also reflects in part that increasing numbers of sales are coming from e-commerce and not brick-and-mortar stores," Berson said, according to the news provider. "That’s part of a longer-term decline in that sector."
Yahoo Finance noted that overall 2017 job growth makes the lack of notable expansion in American employees’ wage rates throughout the year puzzling to a significant number of economists.
Hourly earnings rose 0.3 percent in December and 2.5 percent on a year-over-year basis, in line with predictions. However, wages are not accelerating to a degree experts believe is fully commensurate with the upticks in employment seen throughout the U.S. economy during the last several years. According to Yahoo, the slow pace of earnings growth makes it unlikely, thus far, that the Federal Reserve will raise interest rates in 2018 beyond its three previously scheduled rate hikes.
All told, despite December numbers falling below expectations, 2017 can accurately be considered a good year for American jobs, which will brighten employers’ expectations as 2018 begins.
The full Bureau of Labor Statistics report can be downloaded by
Employment Situation (Canada)
December 2017 ended up being a month of significant tangible success for the Canadian economy and labour market. According to the latest results of the Labour Force Survey from Statistics Canada, unemployment in the nation fell to 5.7 per cent in the year’s final month. This marks the lowest figure for that metric on record since January 1976. Additionally, Canadian businesses added a significant number of jobs for the third straight month during this same period, with approximately 79,000 new positions created across all sectors.
According to Bloomberg, 2017’s total addition of 422,500 positions is the biggest number of Canadian jobs created in a single year since 2002. Meanwhile, Reuters noted that these gains surpassed predictions made by prominent economists. Those experts expected a comparatively miniscule increase of 1,000 jobs.
The sector classified as finance, insurance and real estate by Statistics Canada – which had seen little to no statistically significant growth or contraction for most of 2017 – experienced an uptick of 25,000 jobs in December. In fact, no other Canadian field saw job gains that big. "Other services" (professional and civic organizations, as well as personal services) took the runner-up spot with 13,000 positions created, while education saw the addition of 11,000 jobs. Transportation and warehousing added just 9,500 jobs, but this increase was still significant, as it was the first notable gain seen in the industry since the summer.
A significant number of the total jobs added in Canada for the month – 55,000 – were part-time positions, which can be attributed in part to the increased staffing needs of retailers during the holiday season. But even if only the 24,000 full-time jobs created were counted in the survey, such a figure would still greatly defy the aforementioned prediction of 1,000 new positions.
The positive nature of this economic news affected Canada’s various fiscal metrics almost immediately. Its two-year bond yield rate rose to about 1.79 per cent, which is a level higher than any seen since June 2011, while the Canadian dollar rose to C$1.24 per U.S. dollar. Additionally, optimism regarding the odds of an imminent interest rate hike by the Bank of Canada dramatically skyrocketed. Stefane Marion, the chief economist at National Bank Financial, was one of five prominent economic experts who believe rates are going up in a matter of weeks – by 17 Jan., according to these economists’ conversations with Reuters.
"It’s a spectacular year in terms of employment," Marion said. "I think there’s a rate hike in January. You’re either data-dependent or you’re not."
Speaking with Bloomberg, PNC Financial Services Group Senior International Economist Bill Adams was more reserved in his comment on the possibility of a hike, but he essentially echoed Marion’s sentiment.
"The latest data in hand support a rate hike," Adams told the news provider. "Broad-based growth is still the dominant theme."
Finally, another unexpected statistical jump also shortly followed the Labour Force Survey’s release. Bloomberg noted that the 3.7 per cent export shipment increase in November 2017 – the latest period for which data is available – reversed a trend of decline that had persisted for several months and constituted the biggest monthly export uptick in more than a year.
Canadian ES Report:
Labour Force Survey, December 2017