You can probably guess where we stand on the annual appraisals vs OKRs debate, but let us explain why this decision is particularly important for any businesses that hires Millennials.
According to KPMG, Millennials currently account for 35% of the UK workforce, and are set to represent an astounding 50% of the global workforce by 2020. As a result, companies of all shapes and sizes need to consider their approach to this recruiting, retaining and developing this generation of employees.
It’s so interesting talking to people from different backgrounds and generations about how the workplace has changed over the past decade or so.
If we have to sum it all up in one word, it would be flexibility. Employees have more choice than ever before, in regards to their hours, place of work and more. Workplace trends such as flexitime schedules and remote working are being embraced by some companies as key employee benefits, providing that flexibility which is so highly sought-after.
Providing internal flexibility as part of your business model can be a fantastic incentive to attracting top talent. On the flipside though, if you don’t get your boundaries set properly within your company culture then flexibility could also provide serious issues in relation to your approach to internal performance management.
Progression is important to Millennials
The phrase “a job for life” is swiftly becoming more and more redundant for the younger workforce. According to a recent article in Forbes, the average US Millennial looks set to have 15 to 20 jobs over the course of their working lives!
This trend has been growing for the best part of a decade. Don’t believe us? Back in 2012, a report published by Future Workplace called ‘Multiple Generations @ Work’ highlighted that 91% of millennials expected to stay in their jobs for as little as three years.
Around the same time, research was published by the Bureau of Labor Statistics suggesting that the average employee stays in their job for approximately 4.4 years.
So what does this mean for growing companies and the growing Millennial workforce?
This shorter timespan means that traditional business practices such as the annual appraisal can seem a bit redundant. If indeed a Millennial workforce is only looking to stay in a position for two to three years, is an annual appraisal really the best use of everybody’s time? You may only get to complete a couple of reviews before an employee moves on! Your business is unlikely to gain much from this, and neither are your employees.
One leading reason for this trend, Forbes argues, is that job-hopping may sometimes speed career advancement. Changing jobs can seem like the preferable option over a painfully slow climb up the corporate ladder, especially if an individual works for a company that only reviews employee performance once a year.
If your business is serious about growth, it only makes sense that your employees are too. But what does this mean in the context of annual appraisals vs OKRs?
It’s our belief that annual appraisals struggle to support individual growth ambitions, and may even contribute to lower engagement and retention. In contrast, regular reviews of quarterly OKRs enable a consistent focus on personal development and business growth.
Millennials value feedback
There are other key beliefs present in a younger workforce too. In particular, Millennials report a need for a friendly and supportive work environment.
In fact, 88% of workers say a “positive culture” is important or essential to their dream job, according to Net Impact. And when we look as a strong workplace culture, we often see consistent support and continual feedback as essential ingredients.
“Most companies focus on recruitment and do not put resources into retention. If you don’t mentor your millennials they will leave you,” Julie Kantor, chief executive of training firm Twomentor, recently told Raconteur.
Now, lets go back to the annual appraisals vs OKRs debate. The OKR process involves regular feedback, as employees review their personal goals and discuss progression. On the other hand, while annual appraisals can provide feedback on employee performance, the once-a-year occasion doesn’t lend itself to constructive and supportive development over time.
Annual appraisals vs OKRS: An obvious choice for Millennials
So, what’s the best way to foster employee satisfaction, as well as align departments and ensure that core business goals are met?
Implementing a set of objectives and key results (OKRs) is one of the best ways to ensure that employees are set goals which stretch their abilities, contribute to overall business performance and form the basis of a strong working relationship.
Goal setting and tracking provides Millennial employees with clear direction, and stretch targets can challenge them to step outside of their comfort one and grow within their current role, rather than being forced to find a new one.
Similarly, regular OKR reviews ensure that Millennial employees get the one-on-one feedback and guidance they crave, while managers can gain valuable insight into their team. The result? Better alignment within departments and greater employee satisfaction.