Performance management

Your top performer has resigned. Now what?

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It’s Thursday afternoon. Your employee asked you for a personal meeting. You’re thinking it will be a quick update meeting. Not quite. Your star performer is handing in their notice.

This is not how most of us want to end their week. Receiving the resignation from your top performer can leave you feeling frustrated. So many thoughts are running through your mind. Just what are you going to do now?

Accept and learn

Take a deep breath. It may feel like the end of the world. It isn’t.

You may experience the feeling of hurt and disappointment. After working closely with your top performer, you’ve trained and developed them and don’t understand why they didn’t open up earlier about their plans. The employee may have had their reasons for not sharing them with you. Or perhaps they did all along and you just didn’t listen?

For now, simply accept their decision and take some time to reflect on it.

(No) counter offers

You may not be that ready to accept their resignation. You may consider offering them a counter offer, generally involving a higher salary and/or exposure to specific work and responsibilities.

Some companies categorically rule out counter offers. Such organisations see counter-offers only as temporary band aids. After all, you shouldn’t stop a rolling stone.

Unfortunately, history has shown that most employees who accepted a counter offer will still leave for the same reasons that made them look externally in the first place. Next time around, the company will not offer another counter offer and the employee will leave for good.

In contrast, some organisations may provide a counter offer for top performers in critical roles or working on time-sensitive projects. For these companies, a counter offer closes the immediate need and buys them more time to find an alternative, knowing the employee may still resign in a few weeks or months.

Before committing to any counter offer with your star performer, check with your company’s process and DOA. How long will it take to reach a decision, including answering these questions:

  • Do you know what would make your employee stay (higher salary, flexible schedule, a different project)?
  • Will you be able to match the external offer? Do you want to match the external offer?
  • If not, what non-financial offerings (e.g. new customer, new responsibilities) can you provide? How will you sell these?

Learn from exit interviews

“Employee leave for more money” used to the be explanation. Study over study shows that compensation is not one of the top reasons. For many top performers, a number of events is leading to their resignation.

Organise an exit interview and understand the employee’s motivation for leaving. Exit interviews are ideally held on the employee’s last working day or after they’ve left the company. This way, they don’t have to fear any repercussion for providing direct and honest feedback.

For any exit interviews held by HR in person, careful attention has to be paid to non-verbal cues. Assumptions and interpreting what the employee may wish to say can be misleading. More and more companies therefore use online exit interviews which protect the employee’s privacy and allow them to speak freely.

Implications for the team

While an exit, whether voluntary or involuntary, can impact the team, the disruption can be limited. This is an opportunity to review the team’s roles, responsibilities, processes and workflows.

Most teams generally anticipate some additional work while a replacement is being identified. During this time, support for the remaining team is crucial or a domino effect may be expected.

Managers can spend more time with each team member and modify work goals. At the same time, take a genuine interest in each employee and also help them achieve their personal goals. It’s the latter that also increases employee engagement, something in high demand especially during these times of change.

Just as current work arrangements are being reviewed, focus on making knowledge sharing and succession planning integral parts of running your business. Being pro-active now can reduce the impact of future resignations.

Create a succession plan where you identify those employees who could immediately step in, even if it’s only for a specific period, and who needs to be prepared within the next 6 or 12 months or longer. Do you have any employees who could be cross trained to reduce your dependencies on one individual leaving? Decide what specific training and exposure they’ll require and then start getting them ready. Depending on the transparency levels within your organisation, you may wish to inform these employees about your succession plans while also carefully managing their expectations.

The replacement

As you’re considering the current team structure, you may decide that a replacement is no longer needed. Perhaps you place this role on hold, profiting from manpower savings and only revisit the potential recruitment activities in a few weeks or months.

Should you have determined that freezing the vacancy is not an option, start thinking about the requirements on the role and the ideal candidate. It can be a challenge finding the perfect successor for your star performer. By understanding your team’s needs, you can narrow down on the must have skills, knowledge and experience. You’ll be able to recognise desirable abilities and traits as a differentiator between two (or more) equally suitable candidates.

You may choose not to recruit for the replacement externally and select an internal candidate, although their profile may not be a 100% match. Such a decision may be linked to your overall EVP and HR strategy, focusing on growing talent internally and reinforcing your company’s stand on internal career progression. You’ll provide the internal candidate with an individualised learning plan, acknowledging the support and training they require from you to become successful in the new role.

Make for a smooth exit

While notice periods vary from role and level within the organisation, motivation generally declines quickly after giving notice. It’s best to start the hand over as soon as your top employee handed in their resignation. Agree which activities need to be completed or to whom they need to be handed by what date. Obtain log in details and passwords. Decide who will notify customers about the individual’s departure. When will that communication go out and how?

If your star performer is in a sensitive role, you may wish to put them on garden leave. If you decide that, how will you extract their knowledge and manage the hand over?

Some individuals may ask to shorten their notice period. As tempting as it is to hold them to the entire notice period, be honest with yourself: How much will they actively contribute 9, 10 or 11 weeks into their notice?

To keep the experience with your organisation a positive one, consider agreeing on an earlier end date, especially if brought up by the employee.

You can ask them to take any accrued but untaken leave days. This will reduce your financial responsibility to pay out any such days. Although it may be hard for you to appreciate it, you are, however, giving the employee some time to relax, finish working for your organisation on a high note and start their new job fresh. It all adds up to a positive image of your company and the employee being an ambassador for your organisation even when they’ve moved on.

Finally, wish them well. You may not want to throw a big farewell party. Yet, you may wish to give them a card and say good-bye with dignity and respect. Cherish the good memories you, the team and your top performer shared.

Don’t be caught off guard when your top performer leaves. Contact us today and learn how we can reduce your organisation’s dependency on a single employee. Don’t be stuck in a crisis mode. Be prepared.

The benefits of HR Policies

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We are working in one of the world’s most multi-cultural regions. Individuals from all over the world are coming to work in the Middle East. They are bringing their skills, excitement and hope as well as their beliefs and value systems. Leading a team where languages, viewpoints and behaviours may differ so substantially can be a challenge even for experienced line managers and HR teams alike.

Policies can support creating a common ground for all employees regardless of their background.

What are policies?

While top management determine the guidelines for the business, policies break these down further and define how the business runs. They support the strategic growth, the day-to-day operations as well as organisation’s culture.

What are the benefits?

Written HR policies provide numerous benefits to an organisation.

As companies are growing and hiring new staff, common standards need to be communicated. HR policies help all employees get and stay on the same page and support the company’s culture.

Companies can base their policies on best practices, set to foster innovation, increase the employee experience and strengthen the competitive advantage. Local companies can benefit from the flexibility which the UAE labour law gives them to adjust HR policies issued by their global head office to their specific requirements.

Determining the delegation of authority, roles and responsibilities are clarified for everyone. This, in return, reduces misunderstandings and ensures smooth workflows.

As such, well-written policies provide an opportunity to strengthen employee relations. Reflecting the needs of both parties, they describe the performance and behaviours expected from the employees and the support and guidance given by the company. Should any disciplinary actions need to be taken, they provide a clear framework for consistent and fair treatment and are to prevent lawsuits, as much as possible.

Hence, HR policies consequently serve as a reference point for all people matters.

Which policies to include?

The local laws outline a limited number of required procedures only. Chapter VI of the UAE Labour Law Federal Law No. 8 of 1980 and its amendments describes disciplinary actions whereas Law No. 2 of 2015 against Discrimination and Hatred focuses on the prohibition against discrimination in an employment context.

Companies can therefore decide which policies they implement depending on their needs, provided they do not conflict with the local laws. Typically, companies choose to cover the following areas in their policies:

Recruitment

Organisations can define how they link their strategic workforce planning with the operational recruitment activities like selecting candidates and rehiring former employees. Policies may also include an employee referral programme or deal with the recruitment of family members and relatives.

Code of conduct

Companies can set their own standards of behaviour in their code of conduct, which reflects the organisation’s daily operations, core values and overall company culture. The handling of bullying and harassment situations may be described here, too.

Compensation and benefits

Policies can outline the company’s approach to rewarding employees, eligibility of benefits and allowance and evaluating jobs. They may also include how the company will address salary reviews.

Leave

Besides mandatory leave, companies can support their employees’ wellbeing by providing additional leaves, for example, time off for parental and caring duties, sabbatical or study and exam leave.

Learning and development

These policies address the company’s view on training and can point out the resources available for employees to acquire and develop their skills. They can lay out the criteria for reimbursement of any employee-initiated training, if it is relevant to the job, or special assignments for the employee to gain new experiences.

Performance

Performance policies assist companies applying fair performance assessments. They can also provide guidance on how to deal with unacceptable conduct and help employees improve. A disciplinary policy is normally also in place.

Although there is no limit on the number of policies a company may have, a reasonable and practical approach should be applied. Companies should therefore evaluate the specific needs for their business, however, it is recommended to have the following policies at a minimum written and communicated to all staff:

  • Bullying, harassment and discrimination
  • Code of conduct
  • Disciplinary
  • Grievance

Just as the business evolves and changes, HR policies need to have an option to adjust to the changing business requirements or legal mandates. Do your policies provide you with that flexibility?

HR policies are an effective way to look after your organisation’s and your employees’ needs while providing guidance to handling common workplace issues. Contact us today and learn how we can draft tailored HR policies fit for your business needs.

25 ways to recognise your employees without breaking the bank

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Employee appreciation goes back to the basic human needs in the workplace and yet, too many companies are wasting time and money on ineffective recognition programmes.

Earning a steady pay check only contributes to the first level of Maslow’s hierarchy of needs, being able to look after one’s basic needs. While working in a safe environment follows, recognition is linked to Maslow’s levels affiliation/belonging and esteem, which fill an individual’s life with meaning. Especially for millennials, purpose-driven work is a must.

When a manager appreciates their employee’s efforts and achievements, it increases the feel good hormone, oxytocin, within the employee. It’s a simple action by the manager with big implications for the organisation. For one, the manager strengthens the organisation’s culture for recognition. At the same time, the employee’s satisfaction, motivation and productivity increases, as Deloitte discovered.

Now, isn’t this something we all want?

“Take time to appreciate employees, and they will reciprocate in a thousand ways.” Bob Nelson

Yet, we still see companies not offering recognition schemes, whether of an ad-hoc or structured nature. Some businesses may quote current market conditions as preventing them from implementing a new appreciation initiative which, as they perceive it, comes with a heavy financial investment. The benefits of more productive and engaged employees, however, should outweigh any concerns.

25 ways to recognise an employee or team

An effective recognition scheme doesn’t have to cost the world as these 25 ideas to acknowledge an employee or team show:

  1. Put a simple sticky note with a personal message on their screen
  2. Thank an employee via email by using one of these 8 templates
  3. Recognise the individual’s or the team’s efforts in meetings
  4. Issue a certificate of appreciation
  5. Pay for a course in the field of one of their personal interests
  6. Announce the “Employee of the Month” and “Team of the Month” during the staff meeting
  7. Provide a travelling team trophy to recognise entire teams
  8. Send a thank you letter to the employee’s family, their family time may have been cut short due to the employee’s time travelling or working extra hours on a project
  9. Publish an article about the employee in the company newsletter
  10. Hand out a wellness voucher which employees can use for a massage, mani-pedi, yoga or spinning class
  11. Shout it from the roof top and post about the employee’s achievements on the company’s social media
  12. Give them a bowl of fruits or cookies
  13. Provide a parking spot close to the entrance, especially during the heat of the summer
  14. Let the employee present to senior leaders and gain exposure to them
  15. Give them cinema tickets for the employee and their family
  16. Name an office, lounge, conference room or any room in your office building after the employee
  17. Create a wall of fame where employees can recognise their peers
  18. Bring in a recognition cake for the team
  19. Offer flexible working hours or extended lunch breaks for a week
  20. Bring the employee their favourite drink for a week
  21. Invite family members to recognition events
  22. Send them to an unexpected training course or conference
  23. Prepare a food hamper to share with their family
  24. Have a senior leader take them out for lunch
  25. Give them time off to volunteer with a charity of their choice, works also well for team bonding

These 25 options can be given on an impromptu basis while recognising the team of the month can become part of the regular staff meetings.

Offering timely recognition, a leader is underlining their genuine belief in the employee’s efforts and achievements, regardless if the employee has carried out an outstanding task or is steadily enhancing their own performance, attitude and behaviour.

When an employee expects to be rewarded, this entitlement neutralises the positive effects of recognition programmes seen above. If no award has been provided, the employee’s attitude may become even sour. They may become disengaged and feel resentful towards their management. By keeping it unexpected, the entitlement mentality can be limited.

Benefit from motivated and engaged employees. Call us on +971-52-2516322 and find out how we can set up an effective recognition programme for your company.

How to kick start your 2019 performance management today

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As we’re closing this year, many companies are busy finalising their 2019 planning and are breaking down their objectives into actionable steps. For line managers and employees, it’s also the so often dreaded time of performance reviews. Remove the pain by making small, yet effective changes. Start setting 2019 goals that are actually meaningful for both the organisation and the employee!

Why set performance goals?

Setting performance goals in writing serves different purposes. It provides an opportunity to outline the rationale of the role within an organisational context. Millennials in particular value purpose over pay and need to understand how their role is making a difference within the company and society.

Even today, too few line managers are illustrating the interconnectedness of roles. When setting goals, the line manager should describe how a role contributes to the overall success of the team, department and organisation. This provides further clarity which, in return, will manifest the intentions to work towards these goals and provide opportunities to reflect on the progress throughout the year.

A study conducted by the Dominican University of California identified that individuals who wrote down their goals, planned actions and shared weekly progress reports accomplished significantly more than other participants. Line managers should consider a buddy system to support their team members in achieving their goals.

Line managers can reward and recognise the achievements during the continuous feedback discussions. At the same time, written goals support the accountability culture and identify performance issues early on.

Written goals also serve as a motivator. While generally set for only for a quarter or year, long-term goals can be defined as part of the organisation’s career management and mobility programmes, supporting the retention of staff.

How to set performance goals?

The traditional approaches to setting cascaded objectives are well known. Functional heads break down their area’s goals and let their direct reports further divide these goals for their respective employees. Although team goals are not very common, they can serve as a connect the dots and reemphasise the purpose of each role and team within the organisation.

Line managers and employees can still follow the SMART approach to setting goals:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-bound

The goals should differentiate between job related goals (e.g. for specific tasks, projects and outcomes) and professional development goals which not only look at acquiring new skills and competencies for the current job but also for future roles.

What to do differently in 2019?

With an increased focus on performance management being the second most important initiative for CHROs, organisations are redesigning their programmes with the expected high priority.

Simplified ratings which also allow for well-rounded feedback and increased feedback frequency have already emerged this year. Continuous feedback is tied to continuous learning where companies are also placing higher emphasis on development on both job-related and personal levels.

Line managers will need to successfully transfer from just manager to also coach. Being genuine about their employees, line managers can influence the overall performance by coaching effectively. However, organisations need to invest in leadership development and upskill line managers, if they want to benefit from a 21% increase in business results and an improvement of 20% of the employee’s performance.

While some recommend to set shorter timeframes for goals, others also suggest planning for 2 years linked to the long-term strategy of the organisation. Whichever way an organisation decides to define goals, they need to be agile enough to allow for quickly taking corrective action and adjust for unanticipated changes in the business environment.

Just as line managers are part of the employee’s support group when working towards their goals, publicly announcing and tracking their progress is expected to increase an employee’s success. Line managers are therefore urged to team up employees with an accountability buddy as another source of support.

As you start your new goal setting sessions, ensure your leadership and employees are set up for success in the short and long run!

Kick start your 2019 performance management today and benefit from engaged employees. Uncertain how to align your business strategies with your current performance management? Call us on +971-52-2516322 and find out how we can create and enhance a strong performance management process fit for your organisation.

Preparing your team for now and the future

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Do your employees have what it takes to succeed?

All too often business leaders are complaining about complex processes in their organisation. Their employees aren’t achieving as much or as fast as expected. The quality of work needs to be improved. Time is wasted as employees don’t know how to fully use the latest tools. Business results are lacking behind. Does this sound familiar?

No company can afford such inefficiencies. When was the last time you reviewed your approaches towards employee training and learning? Make it a priority and benefit from more engaged and more productive employees, increasing your revenue and overall market position.

While organisations need to prepare their employees for future demands, current skills also need to be established and enhanced. For some businesses, this becomes a fine balancing act. How do you invest in staff when employee turnover is so high?

Companies have different options to train employees:

  • Internal formal training. Set up by the subject matter expert in the field, they are sharing their skills and knowledge in a structured training on a one-to-one or a classroom like basis.
  • Internal job shadowing. This is more informal and allows the employee to follow (shadow) a colleague when handling a specific task. The employee first observes and can than apply their newly acquired skills first hand.
  • Internal development projects. These provide the employee with exposure to new skills and potentially other/new departments and stakeholders. They can accelerate the skills development and prepare high potential employees for their next role.
  • Internal coaching. A more experienced colleague in the field or a manager (not the line manager) shares their knowledge and provides guidance to the employee. It’s supportive and allows the employee to explore their concerns and motives with the coach. Coaching is one element of building a high-performance workforce.
  • External formal training. Various training providers offer structured courses for participants from different companies in a classroom like environment. Depending on the topic, these training courses may last 1-5 days and may have different levels to increase the participants’ knowledge (e.g. beginner, intermediate and advanced).
  • Self-learning options. The employee is put in charge of their own learning, whether through online modules, evening/weekend classes or internal sessions with their team. While larger organisations may have their own learning portals or corporate universities, smaller companies can benefits from training courses offered by Udemy, edX or LinkedIn. The plethora of courses available may overwhelm an employee and together with the line manager, the appropriate course needs to be selected.

Employees who have received training for their current role are shown more engaged at work. They are also happier and more committed to their work. As these employees see the company investing in them, loyalty towards the organisation increases and so does the likelihood to stay with the organisation.

The company can benefit from the investment in different ways. Numerous studies have found that more engaged employees are also performing at higher levels and are producing higher quality of work. They are more alert at work, reducing the number of absenteeism and reducing the number of work-related accidents.

The overall productivity increases which leads to higher sales turnover for the company. Even in a testing economic climate, organisation that invest in their employees are more stable and notice the challenges to a lesser degree.

Set the employee up for success

To achieve the performance goals set at the beginning of the month or year, an employee needs to be enabled to succeed. This fundamental requirement is unfortunately sometimes ignored when tools, systems or access rights aren’t provided to the employee. Any training given to the employee would then become meaningless. As an organisation, start with the basics and ensure your employees have been given the appropriate tools of the trade today.

Identify the gaps

With leaders giving more immediate and on-the-spot feedback, knowledge gaps can be discovered, often in a straight-forward way.

What needs to be trained? Does the employee have an expiring skill that needs to be updated? Think about skills that are no longer required (much). This could be a manual way of sorting a product on a production belt while the process is moving towards automation. It could also be the employee knowing Linux and in need of learning learn Java, which the current programming language used by the organisation.

And why? 1) Did the employee not know because they hadn’t been informed about the appropriate execution and/or behaviour? 2) Or did they not perform the task/demonstrate the behaviour because they didn’t want to? 3) Or does the employee want to learn more?

Decide on the appropriate training

Not knowing how to perform a task or which behaviour to display can make training easier. It’s often down to communication where guidance can be a good start. Line managers may already have an idea which type of training is suitable for their employee. This may be formal training by a colleague, within an external training setting or self-directed learning, as outlined above. If in doubt, HR has to support the line manager and the employee identifying the appropriate training or training mix. Whatever is given needs to be remembered and can’t just become some time away from the office.

Not wanting to perform the task according the required procedure or not acting within the company’s guidelines is more challenging and may be a performance management issue. Here, conversations and coaching discovering the underlying reasons for ignoring the organisation’s standards are required. The direct line manager should start such discussions before involving senior management and HR. They also need to support the company’s policies and guidelines by publicly demonstrating them living and adherence to them. Otherwise, changing behaviour becomes meaningless.

Involve the employee

Employees are often said to fall into the entitlement trap. “I will only participate in a training session when offered by my company.” This mentality has to be stopped! These days, organisations are placing the emphasis on career development and training on their employees: “My career, my drive” or “Be More” are just two examples.

Training opportunities can be combined with career development discussions and questions may also be asked around personal goals of an employee. It’s important to honestly discuss these objectives as they’ll form the basis for any training and development plan created for the employee. Line managers have to set realistic expectations. In times where budgets are often limited, an executive MBA may not be (fully) sponsored by the organisation, however, study leave may be granted or the organisation may be used as a case study. Often, post-graduate studies are looking at real business challenges and the organisation benefits from innovative solutions to fix an existing challenge.

A skills inventory helps organisations to track the available knowledge within the company. At first, the core skills may only be tracked and other skills can be added in phases. Alternatively and as part of a bigger project, all skills can be identified in one step and the different knowledge levels (e.g. non-existent, beginner, intermediate, advanced, expert) can be assigned to each employee.

Organisations use the inventory to identify the training needs for day-to-day operations on a short-term basis. The inventory can be used for project assignments and substitutes, for example, in case of unexpected long-term illnesses.

Define future skills

Besides looking at the immediate skills needs, companies should consider the emerging skills in the market place and the shifts in customer demands.

Customers and clients provide feedback and by listening to them, companies can predict future products/services needs. They can also predict the necessary skills sets to develop the future products/services. Industry groups and business leaders can also offer valuable insights into future demands.

During the regular business review meetings, senior management can also discuss the need to change existing processes, prepare for future automation and re-evaluate ways of working. While some may be quickly adjusted, others may require project teams to define an enhanced outcome. Such teams can provide additional input into skills requirement in the near future.

Line managers and HR have to collaborate to identify the appropriate training for each employee. The employee’s motivation for short, medium and long-term training has to be factored in. This is where line managers can bridge organisational requirements with individual goals.

While some skills sets are to be acquired over longer periods, certain industries are rapidly changing and require more agile learning opportunities. Short and mid-term requirements also need to be considered and can be integrated into the monthly and annual performance goals.

Reap the benefits

Companies which provide strategic training opportunities also connect learning with their internal succession planning. Traditionally, skills inventories were reserved for only larger corporations. These days, smaller companies that pro-actively review the internal knowledge can limit the disruption caused by the departure of a key employee.

Furthermore, training and skills inventories can support internal recruitment across functions. Companies can identify and select suitable candidates, without having to create “fake” advertisements. This saves line managers and HR time and avoids disappointment amongst employees, not qualified for the role. This approach will need to be reflected in the HR policies, rather than an “all vacancies must be published” one. For smaller organisations, this can also serve as a retention tool since employees are given exposure to other areas without the bureaucracy often experienced in large corporations.

Don’t forget to show the benefits of training to your staff. It leaves them inspired to participate when they see how their work processes become quicker and smoother after a training. It brings them closer to the achieving their annual performance goals and, if linked, any personal goals. It underlines commitment of the organisation to the employees’ career development, resulting in higher engagement and loyalty from the individual. This will support the change in mentality discussed above. Rather than placing the ownership of training on the company, the employee has to play an active part, too.

Is your organisation ready to benefit from more engaged and productive employees? We support organisations looking for individualised training solutions fit for their business now and in the future. Contact us and find out how we can support your company.

How to increase your team’s productivity

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Many businesses are being asked to do more with less. Is your organisation one of them?

US-based companies lose 20-30 per cent of their revenue due to inefficiency. It is expected that this number is even higher in this region. It is high time for companies, whether an SME or a large corporation to tackle the issue and increase the team’s productivity with these 5 tips:

  1. Set realistic expectations

Start with the basics. It is too often ignored! During the induction, companies outline the expected behaviour and describe the organisation’s culture to new joiners. For existing employees, however, line managers don’t reiterate their performance expectations throughout the year. With many organisations still in the initiation phase of setting 2018 goals, line managers can use this period, set SMART goals and again define standards and expectations.

  1. Create clarity

Throughout the year, line managers can increase their team’s productivity by clarifying roles and responsibilities. This can be done through a job description, team meetings and/or project charters. As the team is getting a deeper understanding about their interconnectedness of their contributions, they can review processes and identify duplication and waste before recommending process improvements.

  1. Enable the individual

Line managers need to support the individual to create a well-functioning and highly performing team. As such, line managers can conduct a knowledge gap and training needs analysis. Assessing the knowledge and skills of each employee, the line manager decides what training the employee requires. Training does not have to be formal classes only. Online courses, webinars, product demos and tutorials, lectures, articles and books can be a cost-effective (if not even free of charge) alternative.

An employee will also need to have the required tools to perform to increase their productivity. This includes providing the appropriate software packages, but also access rights to the required systems and data, access to the client’s database to arrange sales calls and the freedom to make decisions.

  1. Effective communication

All too often, we find ourselves in meetings that should have been an email or a phone call. We spend too much time in meetings with no concrete actions as an outcome. This year, reduce the number of meetings and change the standard meeting time to 30 minutes. If this is already in place, shorten it to 20 minutes.

Being bombarded with information from all sides and all times of the day, communication with the team needs to be clear and precise to avoid confusion. This cannot be underestimate in a region with as many different native languages and cultures. As with the expectations mentioned above, line managers can use this time to define how to handle requests, e.g. those marked “urgent”, which seems to be the norm in many organisations.

Throughout the day and week, line managers can use constructive feedback when there’s an opportunity for an improvement and help an employee become more efficient and effective. Instead of the dreaded monthly or annual performance review, line managers can have informal chats or check ins with their team (individual employee and entire team) and use these observations to take corrective actions as well as lead the activities over the coming days, weeks and months.

  1. Motivate them

Finishing work on time is for many employees their motivation. This, however, does not mean they’re productive during working hours. Line managers, possibly together with HR, need to identify ways to recognise and celebrate the team’s achievements and motivate them. While this could be an extra (financial) incentive, it may set the wrong tone and non-financial rewards may be more appropriate. Team lunches foster communication and team working, too. Karaoke events or sporting competitions, in particular against other teams within the organisation, are fun and promote the team spirit.

Can’t afford to waste time and money due to team and process inefficiency? Are you looking for a more engaged and more productive team? Call us on +971-52-2516322 and find out how we can help you develop a high performing culture reflected in increased sales and revenue.

Maximise a limit merit budget

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For many organisations in this region, the 2018 merit rounds will bring new challenges. As in other parts of the world, merit budgets are limited while employees are experiencing a rise in cost of living. Since 1 January 2018, VAT has been added to most areas of our life. Employees have already asked last year how companies will compensate them for these increases?

Most companies still wait and see what other companies are doing and are planning to provide a merit increase only. Any cost of living increases may follow at a later stage. With budgets already set for many organisation, companies can still be creative and maximise a limited merit budget by using one or a mixture of the following course of action:

  1. Peanut butter approach
  2. Differentiation by performance
  3. Targeted increases
  4. Lump sum awards

The peanut butter approach

The peanut butter style provides the same percentage increase to every employee. It is generally taken by organisations wanting to give an equal increase to cover the employees’ cost of living, especially since the implementation of VAT. While managers are not involved in the process and no additional calibration and approval meetings, the process is reduced substantially. HR and Payroll can implement the new salaries almost instantly, freeing up resources for other projects. However, such increases become a mere cost of living adjustment rather than a merit increase.

Differentiation by performance

Companies may want to support their performance-driven culture by linking it to financial rewards. These organisations provide different increases for the different performance ratings. In general, a low performing employee would receive no increase or only a minimal one. In contrast, the efforts, achievements and behaviours of high or top performers are recognised with merit increases equivalent to 2x or 3x of the budget.

An effective performance management system is a pre-requisite for any pay-for-performance programme. While some companies set a fixed increase for each performance rating, the trend is to enable managers to determine the increase from a range. In the latter case, a realistic timeframe needs to be set for managers to provide their recommendations and calibration before the increases can be communicated to employees and executed by Payroll.

Targeted increases

Similar to differentiated increases by performance, organisations can provide targeted increases for certain employee groups. This could be for critical roles which create value in, for example, improved quality, financial performance or customer satisfaction. They could also be of a strategic impact where roles are linked to the organisation’s capability to maintain and strengthen its position. Other employee groups could include high performances, high potentials, individuals on the succession plan, hard to replace or employees with hot skills or those low in the salary range.

Knowing which roles, skills or individuals should be focused on, HR and management can identify an appropriate merit increase. For simplicity, all increases to the identified groups can be of the same amount (peanut butter approach), yet, such increases may not lead to the desired motivation boost amongst the workforce. Should the company wish to differentiate between these groups, the proposed merit increase can be distinguished based on certain factors, like the contributions made to the organisation and the implications and risks of leaving. This process, however, can easily be over-engineered, leaving to a lengthy planning and implementation period which, at times of a limited merit budget, may be counterproductive.

Lump sum awards

As merit increases not only increase the current salary, they also add costs to other salary-linked elements like bonus, end of service benefits, pension or social security contributions. For companies to control the rising long-term cost implications, lump sum amounts can be paid.

Even here, companies have options around the payout: For all employees or just specific employee groups. A flat amount or varying amounts based on a points system (e.g. for performance or criticality of the role or individual).

Each approach has pros and cons as explained above and HR teams need to their overall objective when identifying the appropriate one (or a blended one) for their business. Linking it to the company’s culture is as important as getting top leadership buy in before communicating the chosen way to management and consequently employees.

When facing financial challenges, companies win by communicating a transparent overview to their employees. It helps to manage employees’ expectations and reiterates the company’s philosophy for success. Line managers need to be supported by HR and be prepared to communicate potentially harder messages to employees not receiving any pay increase.

HR teams together with line managers should also look at non-financial rewards to recognise, motivate and retain while being challenged by a limited merit budget.

Do you want to ensure your limited merit budget achieves the desired outcomes? Are you uncertain about which approach is the right one for your company? Call us on +971-52-2516322 and find out how we can help you maximise your merit budget motivating and engaging your employees.

What’s happening around performance reviews?

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Last year, the HR world saw large organisations like Deloitte and IBM abandoning their traditional performance management system. Instead of forcing managers to rate their employees, these companies switched to a rating-less review focusing on continuous feedback throughout the year.

At the 21st Compensation & Benefits Forum held in Dubai last week, the topic of performance management formed a large part of the agenda. How are companies getting on with their new performance management systems? Is it working for them? What lessons have been learnt? Attendees were all too curious to find out what happened over the last 12 months.

The performance management arena is still changing and no one solution has been found to fit all organisations. Performance management is still closely linked to the maturity of the organisation’s HR team and the culture of the business, as Madhur Mehta, Lead-Global Compensation Centre of Excellence at Western Union pointed out.

Managers are still as uncomfortable to have performance discussions with their staff as before.

HR teams are recognising the need to empower line managers to provide feedback to their employees. Moreover, they see the need to equip line managers with the tools to lead challenging conversations with their staff. While many organisations are training managers on a regular basis, these sessions don’t always make managers feel more comfortable having difficult performance discussions.

A training designed by Corporate HR may not take into consideration the local challenges. HR and the business need to speak the same language and the training courses need to represent this. Understanding the learning needs of line managers, HR teams may need to customise the training sessions, communication and tools to enable all line managers. Potential translations into Arabic, French and potential other languages may also be required, depending on the demographics.

Aggregate scores are used to provide fairer ratings.

Aggregate scores are a new trend. Rather than providing one rating at the end of the performance year, some organisations have introduced frequent discussions and are requesting ratings after each conversation. Throughout the year, the employee’s performance will have been rated 6-12 times, resulting in one aggregate score for the entire year.

For both manager and employee, this concept appears to provide a fairer evaluation. Often, the manager and the employee frantically review their emails in preparation of their year-end assessment and seem to focus only on the last few weeks, maybe months. The aggregate score removes this and allows for a consistent review and rating.

The number of ratings has been reduced to an even number.

Organisations like Abu Dhabi Commercial Bank (ADCB) have reduced the levels within their rating system, for example from 5 levels to 4 levels. Many managers use the middle rating as a safe and solid option. Moving to an even number, managers need to “make a decision” on their employee’s performance, as Susan Cunning, Head of Reward Design & Policy at ADCB, pointed out. They can no longer hide behind a rating in the middle of the spectrum.

Ratings are replaced with descriptive texts.

Moving away from numeric ratings, businesses have introduced descriptive texts of the employee’s achievements and improvements. Organisations that have applied this approach found line managers increasing constructive feedback, helping the employee to enhance their performance with specific actions.

HR teams are looking to optimise the effectiveness of the process.

Questions around the validity of KPIs led companies to remove traditional goal setting from the process. They’ve discovered that, despite all their training efforts, goals were not well defined, making the evaluation and measurement more challenging, as Samir Bajaj, Global HR Director at Cola-Cola commented. The exception remains the sales force.

Understanding the time required for performance discussions and documentations, HR teams are looking at software solutions to enhance the effectiveness of their performance management system. Applying a holistic view, HR teams are searching for possibilities to remove the natural dislike by both line managers and employees towards performance management and are identifying technological advancements to reduce the administrative work required for both customers.

Performance management and rewards have been delinked.

Too little differentiation between top, average and low performers has been found in this region. It does no longer warrant the many hours spent by line managers, senior management, HR teams and Compensation & Benefits teams during the annual merit and bonus cycle. Instead of looking at a forced distribution curve which then feeds into the actual merit increase or bonus payout, some companies are arguing for flat merit increases.

Differentiation of performance and the consequent rewards need to happen on new levels. Examples are spot awards during the year, training opportunities or special assignments and career advancements.

The findings from this year’s Compensation & Benefits forum highlight the moving state of performance management systems. The topic is still evolving with no clear solution for all organisations in sight. It further showed the importance for each organisation to identify the right approach for them. What may work for one business, may not be suitable for another.

You’re not happy with your performance management and are you looking to enhance it? Contact us and find out how we can create a programme fit for your company and culture.

Time to audit your HR function

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The beginning of a year provides a great opportunity to conduct an HR audit. New laws and regulations often take effect on New Year’s Day. While companies may have some time to update their documentation, policies and procedures, you’ll need to be compliant with legislation or risk being fined.

Your HR team can carry it out on its own or, preferably, work with the internal QA team or an external consultant to obtain objective results. Working with a checklist and predefined evaluation criteria, the findings from the HR audit offer unbiased results. You have the chance to identify the strong policies, processes, procedures and, more importantly, the areas in need for improvement. Simultaneously, it lets you step back and review how closely your strategy is reflected in your operational work.

As you prepare for the audit, define which areas you want to check. Examples can include:

  1. Personnel files: Is the electronic or hard copy personnel file complete? Do you have all required visa and work permit documentation? Do you have all contracts signed by all parties and filed? Have performance evaluations and any related documents, e.g. warning letters, been recorded and filed?
  2. HR policies: Are your policies in line with the latest changes in labour law, immigration law, data privacy law or civil law? Do any of your policies stand in contraction to each other? Have all policies been written and, as a next step, been communicated to the employees?
  3. HR procedures: Are your procedures in line with your policies? Do the written procedures reflect the actual execution of them?
  4. Payments: Working together with your Payroll team or provider, have salaries, allowances, bonuses and commissions been paid by the required dates and as per the applicable plans? Do the number of overtime hours match the hours worked as per the time keeping records? Has overtime been calculated in accordance with the legal requirements and internal premiums?

HR audits need to be carefully planned and the auditors require the appropriate training to define the current state. Due to the time requirements, it may only be conducted at one point once a year. Some companies prefer to audit throughout the year, focusing on one particular area in each month (e.g. HR policies in January, salary payments in February and so on), thus keeping the impact on the daily operations low.

Once the findings have been gathered and analysed, you can identify any gaps and prioritise the corrective actions, if and as needed. The most important actions are to correct violations of the law and health and safety. These two areas can attract financial fines as well as imprisonment. Address HR inefficiencies and implement best practices once a solid foundation has been put in place for your HR team. This may mean (re-)training your team on getting the job done right the first time by understanding the required steps in the process, leveraging technology and applying their strengths.

Are you concerned that your HR operations may no longer be compliant with the labour law? Don’t have the time to create an HR audit from scratch? Call us on +971-50-5516322 and find out how we can support you to reduce risks of being fined while increasing your HR team’s efficiency.

Are you ready to communicate your total rewards?

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Companies are spending hours and weeks on defining the total rewards philosophy that’s right for them. Yet, how much time is spent communicating it to all employees? Do your employees even know how much they receive in cash and non-cash elements?

In 2016, 53% of companies reported that most of their employees do not understand how base pay is determined (Willis Towers Watson). Do you know whether all your rewards programmes are understood or even known by all of your employees?

A clear and easy to understand communication strategy can increase the comprehension of your various rewards programmes amongst your employees. Follow these 5 steps to create an effective communications plan for your company:

  1. Define the goals for the communication initiative. Are you looking to increase general awareness about your existing rewards programmes? Are you rolling out a new benefit and want your employees to become more familiar with it?

    2. Be clear about the objectives. Refer to them throughout the process and measure your progress and achievement regularly.

  2. Identify all audiences. This goes from your top executive team to all levels below. Don’t forget to include spouses and other family members who will have an interest in programmes like medical benefits or retirement provisions.

    3. Working in a multi-cultural region, is every employee (and family member) fluent enough to understand the message in your working language? Do any messages need to be translated into other languages? Factor any translations into your budget and timeline.

  3. Articulate key messages and outline actions employees need to take. Review your messages and ensure they are consistent, concise and clearly written. Stick with either British or American English and proofread the messages before they’re sent out. Check that none stands in contrast to your EVP or any other HR programmes.

    4. If you’re asking employees to take any actions, specify what needs to be done by whom how and when. Provide details of who to contact for any support.

  4. Determine the most effective communication channels and the timing of the delivery. Consider the different channels you have available within your office and global organisation. These could be town hall, team or individual meetings, webinars and online training, newsletters, intranet and emails, to mention just a few.

    5. Select the channels most appropriate for the specific employee group. For a new employee, the new employee orientation may be the right place to start whereas for existing employees, performance reviews can be utilised.

    Line managers are a great channel to spread the news about the different rewards programmes. Provide them with a solid understanding of each programme and enable them to confidently answer any questions from their employees.

    The same message should be delivered through multiple channels and on a regular basis to maximise its effectiveness. Don’t stop after sending out one email! Keep the communication flowing throughout the year.

  5. Utilise total rewards statements. Total rewards statements illustrate the employee’s personalised total rewards provided by the company. They generally include a table showing the before and after a salary review details and/or a pie chart for all rewards elements. The employee’s manager can issue these and answer any questions directly.

Looking to overhaul your total rewards communication in 2017? Not sure how best to approach it? Call us on +971-50-5516322 and find out how we can establish a unique communication strategy for you.