The Multiplier Effect of Performance Enablement

THE MULTIPLIER EFFECT OF PERFORMANCE ENABLEMENT Great performance management increases employee experience metrics across the board. 2023 HR RESEARCH REPORT EBOOK SERIES

When employers want to get the measure of their workforces, they typically look at key metrics like productivity, engagement, and retention — which have all been shown to fuel pro昀椀tability. But what elements power those metrics? Data from our recent Betterworks 2023 State of Performance Enablement (SPE) survey has shown that sentiments like fairness, inclusion, belonging, trust, mastery, and autonomy play a substantial role in creating better employee experiences and performance across all critical KPIs. Performance enablement, a modern approach to performance What is Performance Enablement? management, has surfaced over the past few years as a signi昀椀cant in昀氀uencer of workplace sentiments. This transformational approach Performance enablement is the engine starts by reshaping how employees perceive their work, purpose, e昀昀orts, that transforms workforces by driving interests, and sense of belonging — using that as a launching pad for engagement, productivity, and greater driving results. employee satisfaction. Many organizations recognize the need to rethink performance. Our By placing employees and managers at research shows that 46% of employees have seen their companies the center, it allows employees to create implement new performance management (PM) systems since 2020. meaningful career and performance goals Despite the desire for change, organizations are missing the mark, as 37% that align with their company’s strategic of employees still grade their PM systems as a failure. This highlights the goals, and it equips managers with the tools importance of not just change, but the right change. to develop and retain employees. 2 The Multiplier E昀昀ect of Performance Enablement

How performance Enabled employees feel more productive, engaged, and confident. Lack of enablement correlates management affects with high stress and burnout. every aspect of Positive Sentiment employee experience Productive 65% 55% Good performance enablement has a 52% multiplier e昀昀ect, lifting up other aspects Con昀椀dent 31% of employee experience, including con昀椀dence, belonging, trust, fairness, Engaged 49% growth potential, and intent to stay 26% — and, in turn, correlating with higher 49% engagement and productivity. Optimistic 30% Let’s take a look at what the data shows. 43% Focused 26% Resilient 24% Enabled 18% Not enabled Negative Sentiment Stressed 27% Enabled 45% Not enabled Over- 23% Confidence, optimism, whelmed 35% and positive sentiment Burned 17% out 40% In our SPE survey, half of the participants 10% reported meaningful performance Distracted 14% enablement, coinciding with higher levels of con昀椀dence, optimism, focus, Detached 9% and resilience. Conversely, the absence 19% of enablement often leads to increased 8% stress, overwhelm, and a negative impact Pessimistic 18% on morale. 3 The Multiplier E昀昀ect of Performance Enablement

Employee satisfaction While 39% of our 2023 survey participants said they always like working at their company, that number rose substantially to 68% when employees always experience meaningful discussions with managers about their performance and goals. Employees who get good enablement are 2x as likely to feel they always belong and are valued at work. Always Sometimes Rarely Never Yes 53% 42% >4%

Trust in leadership and feelings of fairness Trust in leadership and HR is signi昀椀cantly higher when employees believe performance management is successful. Companies can leverage performance enablement to build trust and a昀케nity by embodying transparency and authenticity. When employees view performance management as failing, their trust plummets, especially with HR and company leaders. It skyrockets by 2x to 4x when employees view performance management as a success. Given the relatively low percentage of trust employees typically have toward HR and leadership, a good performance enablement process is a huge lever companies can push to build trust. The success of performance management correlates with levels of trust across the organization Trust: When performance 79% management is seen as a success 73% Baseline feelings of trust 68 61% Employee development, Trust: When performance 63 % talent pipelines, and management is seen as a failure % intent to stay 49% 40% 41% Employees who were always satis昀椀ed with their career development conversations with their managers were 7.5x more 32 likely to see a path forward internally, 26 % 21% translating into more robust talent pipelines % 10% 12% and higher retention. Only 32% of our 4% 12 2023 survey respondents felt that % their performance review process enhanced their performance, while barely Trust in HR Trust in organization Trust in direct Trust in team Trust in no one half believed they received adequate leaders manager members performance enablement for career growth. Among employees who had dedicated Employees who felt their performance reviews were very fair and equitable reported higher productivity performance enablement tools that they and engagement, 83% and 71%, respectively, than employees who felt performance reviews were unfair like, 92% felt properly enabled. (60% and 57%, respectively). 5 The Multiplier E昀昀ect of Performance Enablement

Good performance conversations drive higher engagement and productivity. 80% 81% 73% Always engaged Very productive 60% 62% 55% 54% 55% 47% 48% Engagement and productivity 40% Creating a culture of trust, inclusion, optimism, and resilience can move the needle on engagement and productivity. Gallup’s research demonstrates the positive link between employee engagement, well-being, and shareholder value. In our 2023 State of Performance Enablement report, we saw an 18 percentage point increase in engagement 20% among employees who were always satis昀椀ed with their manager conversations versus those who were only satis昀椀ed sometimes. There was a similar spike in productivity, a key metric for most companies, among employees who reported complete satisfaction with manager conversations. Employees who believe they have good performance Always Sometimes Rarely Never enablement overall reported nearly double the level of engagement and 16% higher productivity than their peers Satisfaction with manager conversations who did not have good performance management. 6 The Multiplier E昀昀ect of Performance Enablement

Ensure the right tools are in place Often, the success or failure of performance enablement comes down to the tools companies use. Lightweight, dedicated tools are easier to integrate into the work昀氀ow and can signi昀椀cantly enhance performance and development. In the checklist accompanying this ebook, 12 Qualities that Make Performance Enablement Exceptional, we explore the qualities your performance enablement system should possess to ensure peak e昀昀ectiveness and a signi昀椀cantly improved employee experience. Read our 2023 State of Performance Enablement report to learn more about employee DOWNLOAD sentiments at work. Want to learn more about comprehensive software that supports strong performance enablement, feedback, and goal setting — and helps to amplify the multiplier e昀昀ect? Contact us today for a tour of the Betterworks platform. 7 The Multiplier E昀昀ect of Performance Enablement

Discover Betterworks Companies like Colgate-Palmolive, Intuit, Freddie Mac, and Udemy rely on Betterworks as their performance management infrastructure — enabling great performance through dedicated people technology. Betterworks’ best-in-class HR talent management solutions are designed to drive exceptional performance by putting employee experience at the heart of how companies align, motivate, retain, and develop their people. Unlike legacy HR technology, Betterworks is a lightweight, enterprise-ready solution that integrates with the tools employees use every day. betterworks.com © Copyright 2013-2023 Betterworks. All rights reserved. Various trademarks held by their respective owners.