What HR Leaders Need to Know About The Growth Divide

Innovation, productivity, and sustainable growth are a handful of typical priorities for HR leaders and executive teams. So why is there a huge disconnect between what employers and employees believe is necessary to support these priorities?

Results from the new Growth Divide Study, based on two surveys of 500 U.S. HR and cross-functional executives with a title of VP/equivalent or higher who are decision-makers on company operations and 2,000 U.S. of office professionals across industries and company sizes, were announced on April 4th at HR Transform and IMPACT 2018.

The study commissioned by Reflektive and conducted by Wakefield Research reveals a concerning disconnect on the current state of performance feedback and management. Most notably, the widespread lack of real-time engagement and development between managers and their team members causes counter-productive friction and dissatisfaction, which hinders employee performance and business growth.

What is the Growth Divide?

The Growth Divide is a gap between what business leaders believe is necessary to compete and grow market share and revenues with their business operations, and what employees believe is necessary to contribute, grow professionally, and thrive with their career operations.

For example, the study found that while 94 percent of executives are confident that employees are satisfied with their company’s performance review process, the reality is most employees feel the process is outdated (61 percent) because it’s too generic (22 percent) or too infrequent (6 percent), and often incomplete (62 percent).  

Rachel Ernst on Key Takeaways

Five Study Themes to Consider

  1. Outdated Performance Review Process 
    It’s well understood that annual performance reviews often include recency and manager bias, and are painful for employees as well as time-consuming for supervisors and executives.  Unfortunately, more than half (58%) of executives frequently reschedule or delay employee performance reviews because they don’t have enough time to prepare all the necessary materials. Nearly a quarter (23%) of executives have delayed a review for an entire month or longer. Executives spend an average of 15 hours outside of the office making sure they have the right information for an upcoming annual review.
  2. Lack of Alignment Around Goals 
    More than a quarter (27%) of employees learned of the metrics on which they are or will be evaluated in their next performance review after they were hired but before the review, while 25% found out during their last review or check-in. And 16% of professionals still do not know. Feedback matters, too — 94% of office professionals want their manager to address their mistakes and development opportunities in real-time. But, more than 2 in 3 (67%) busy company executives admit to having removed negative feedback from an employee’s evaluation because too much time had passed to even bring it up. If employees don’t get feedback, they can’t improve — and that’s lost value to the business.
  3. Poor Conversations and Listening
    It can be difficult to voice concerns at work when there isn’t a regular opportunity to do so. Nearly half (48%) of employees admit they don’t even feel comfortable raising issues with their boss between formal performance reviews. Millennials are even more nervous about bringing up concerns, as 54% would not bring up an office issue between formal reviews, compared to 46% of Gen Xers and 40% of Boomers. And employers feel the same lack of communication. More than 2 in 3 (68%) company executives frequently only learn for the first time about an employee’s concerns during a performance evaluation.
  4. Socializing Takes on New Meaning
    Social time with the boss can be a meaningful way to establish rapport and get on the manager’s “good side” – but does Happy Hour outside of work help to foster growth-minded relationships? Surprisingly, a majority (69%) of employees actually believe having more regular performance and development check-ins can better improve their relationship with their manager, rather than more regular social interactions with them outside of work (31%).
  5. Growth Challenges to Overcome
    Nearly half of executives think employee growth and development (42%) are the main challenges their companies now face, followed by productivity (40%), innovation (39%), profitability 38%, employee retention 37%, and positive office culture 36%. Managers believe they can do better, which is good news for employees. 94% would like to see changes at their company in the next 12 months, including: updating technology, such as networks or programs (56%); creating more opportunities for employee mobility (48%); and incorporating better diversity initiatives (46%). Last but not least, many executives (43%) would like to establish more frequent performance reviews in the next 12 months – perhaps a fix for the outdated performance review which so many employees complain about.

From One Divide to Another

Not too long ago, there was significant inequality across many segments of the global population when it came to technology access and tech-related skills; it was called the Digital Divide. That changed years ago and virtually everyone is connected and communicating with mini-supercomputers at their fingertips.  

Now, we’re experiencing a new divide whereby the access and speed of digital business is causing a breakdown of 20th century people management practices like the annual performance review and development.  “The data from across many industries confirms what we’ve been innovating for since 2014: business performance and employee success hinges on real-time, ongoing feedback among leaders, managers, and employees,” said Rajeev Behera, CEO, Reflektive. “In the same way that overcoming the Digital Divide in prior decades was critical for widespread connectivity and prosperity, the ability to help bridge this new ‘Growth Divide’ with technology is a differentiator when it comes to continuous learning and development, goal alignment, employee performance, and growth.”

Learn More and Register for the Webinar

We’re just getting started and we invite you to participate in a Growth Divide discovery process! Register for the May 8th webinar with Wakefield Research and Reflektive. Download a brief E-Book and stay tuned for more content to come at GrowthDivide.com and contribute to the conversation on Twitter with #GrowthDivide.