Organizational Support for Employees Is Down. Here's What You Can Do About It
Given the economic environment, you'd think organizations would be doing even more to support their employees and managers, especially when it comes to performance. Yet our recent study on performance management found the opposite was true: employees think less of their company’s performance management practices than they did just two years ago.
Leaders should pay attention to this decline, because it will directly impact their company’s ability to deliver results. One of the areas where employees feel their company is falling down is with clarity of goals and expectations. Our research has found that employees with high clarity on what they need to do to succeed in the future are three times more likely to be engaged at work. They are also two times more likely to stay with their current organization. Retention and engagement are particularly important for companies in the tight labor market and uncertain economy.
Employee Clarity on Organizational Goals Has Declined Since 2021
Our data, collected in the fall of 2022, revealed a few things about employee perceptions of their company’s performance management practices:
- Fewer employees have clarity on what is expected of them (38%) compared to 2021 (48%) (see Figure 1).
- Only 37% of companies encourage employees to update their goals continuously, compared to almost 50% in 2021.
- Forty-six percent of employers make sure their employees are clear on goals, compared to 55% that did the same in 2021.
Additionally, we found that after rising in 2021, employees’ perceptions of their company’s practices are back to the same levels as before the pandemic in 2019.
Figure 1: % of employees in 2022, 2021 and 2019 who agree their organization does each item to a “significant” or “very great” extent, n=739 | RedThread Research, 2023 | *Note: This item was not included in the 2019 survey.
A few possible reasons can explain this decline in perceptions:
- Employee expectations have shifted. According to Gartner research, 50% of employees report that the pandemic changed their expectations of their employer. Additionally, 52% said the pandemic made them question the purpose of their day-to-day job. Employees want and expect their employers to provide them with the information that helps them understand the value and purpose of their work and how it connects to the company’s overall goals.
- Regression in performance management practices. Many companies are letting go of some of the practices adopted during the pandemic. These could include frequent manager check-ins, 1:1s, town halls, and company announcements, that likely helped employees better understand organizational priorities and expectations.
- Companies are expecting managers to do too much. Many organizations leave it up to managers to clarify employee expectations, align goals and set priorities. However, managers themselves are struggling, so putting more on their plate is an ineffective approach to getting employees the information and support they need. For example, our research found that manager effectiveness and engagement have declined by 12 and 5 percentage points, respectively, since 2020.
Related Article: What's Next for Performance Management?
How Can Organizations Provide Greater Clarity?
Organizations can do three things to provide more clarity to employees and help them navigate the future (see Figure 2).
1. Clarify Organizational Purpose
When people understand the company’s overall purpose, it can be easier to see how their day-to-day work connects to it. Organizations should clearly define their purpose and priorities for the future to help employees keep their goals updated. For example, at EY, different businesses and practices are encouraged to articulate their purpose, which is nested within a well-defined overall mission of the organization. This helps people connect their personal purpose to the nested purpose and ultimately to the overall organizational purpose.
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2. Communicate Priorities
Once companies have established their purpose, overall mission and priorities, they must communicate them within the broader organization on a regular basis, as well as externally. Regular communication can help employees stay on track and understand how their work adds value. For example, a 500-employee Canadian financial software company effectively communicates priorities, goals and performance, and it starts from the top. Once the C-suite leaders have shared their overall priorities, data and numbers, managers help employees connect the dots. Employees are encouraged to discuss how their goals and work align with the organization’s mission with their managers.
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3. Help Employees Align on Their Purpose
Organizations should make sure managers have the information they need to help employees stay on course and align their goals and priorities. Additionally, while managers have a critical role, organizations should encourage individuals to take ownership and reflect on how their work contributes to organizational goals. For example, a Canadian digital advertising company makes sure employees are extremely clear about their expectations and aligned with their managers on the role descriptions. The company crafts a two-sentence role objective out of the role description for each employee and shares it with employees as their North Star. This way, the organization clarifies employees' roles and helps them align their purpose.
Figure 2: Actions organizations can take to help employees navigate the future | RedThread Research, 2023.
Employee perceptions of their company’s practices around providing clarity on goals and expectations have declined since 2021. Companies need to pay attention as a lack of clarity can lead to employee disengagement and result in them quitting. Helping employees navigate the future by providing clarity on their goals and how they can succeed is one of the ways organizations can meet employee expectations.
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