Summary
The finance and insurance industry is finding it difficult to attract and retain top talent amidst tight competition. Implementing proven performance management practices will allow these companies to address these challenges, while also fueling employee engagement and improving business results. Learn how the finance and insurance industry is leading HR professionals to more effectively implement performance management best practices and improve employee engagement.
The finance and insurance industry offers stellar benefits for employees, such as high earning potential, opportunities for growth, and transferable skill sets. However, in the last few years, the industry has experienced increased regulations, tighter competition, and high employee turnover that call for improved performance management practices. In a fast-paced environment where employees hold high expectations for culture and work-life balance, effective performance management is an essential business strategy that leads to improved employee engagement.
What is Performance Management?
Performance management entails continuous communication between a supervisor and an employee throughout the year, aimed at supporting the achievement of the organization’s strategic objectives. This process includes discussing performance expectations, defining and measuring objectives, setting and tracking goals, and engaging in continuous feedback.
Performance management has a direct link to employee engagement, retention, workplace satisfaction, and overall business results. According to Gallup, the cost of replacing a singular employee ranges from one half to two times that employee’s annual salary. In a 100-person company offering an average salary of $50,000, it can expect turnover costs of up to $2.6 million per year. For a 100-person organization that reduces turnover/improves retention by 15%, they can save $1.5 million a year.
Historically, performance management practices were often minimized to an annual performance review that did little to motivate or empower employees. The modern-day approach prioritizes being people-centric and invests in ongoing discussions about employees’ aspirations and talents.
Why is Performance Management Important in Finance and Insurance?
In an industry where top talent is fiercely sought after, engaged and satisfied employees play a vital role in overcoming the significant challenges faced by the finance and insurance sector. The following list highlights those major challenges:
- Retaining mid-career and upper-level talent- Finding/hiring mid-career and upper-level talent can be just as difficult if not more so than retaining it. The 2008 financial crisis pushed professionals to leave the industry entirely, causing a talent gap of seasoned professionals the sector is experiencing now. Attracting experienced employees to these jobs years later proves to be challenging as well.
- Intensifying competition- With the surge of “fintech” and “insurtech” organizations, the industry landscape has shifted, allowing job seekers to hold more negotiating power and a broader set of career opportunities. Businesses with a more traditional approach to performance management and workplace culture may find it more challenging to attract talent, specifically in the younger generations.
- Retiring workforce- According to The America Works Report, by 2036 almost 400,000 employees in the insurance industry specifically will retire. As the millennial generation shows low interest in these roles, the workforce will experience major gaps in talent sooner rather than later.
- Employee desire for greater transparency- Traditional performance management no longer has a place in this sector. Finance and insurance employees desire organization-wide transparency and accountability that fuels a strong and united company culture.
- Disparate and outdated performance tracking- People analytics and data-driven decisions are a necessity so HR and other executives can make informed people/business decisions. Tracking performance is important, but tracking the right metrics that empower employee growth and development is often a missing link.
The Benefits of Performance Management in Finance and Insurance
Amidst the challenges faced by the finance and insurance industry, strategic performance management practices can pave the way for success in various key areas:
- Boosted employee engagement and retention rates
- Alignment with organizational mission and vision
- Embracing flexible feedback mechanisms
- Providing avenues for growth and development
- Enhancing transparency within the workplace
- Generating more precise performance reports
- Establishing a digital platform as one single source of truth
- Facilitating well-informed business decisions
- Fostering a sense of unity and solidarity within teams
8 Tips for Effective Performance Management in Finance and Insurance Organizations
- Align Goals to the Organization’s Mission and Vision
Ensuring that all employees are aligned and working towards a common goal in a high-stress environment can be challenging. A powerful strategy to foster unity is to establish goals that advance the organization’s mission and vision. By setting company-wide, departmental, team, and individual goals that are in line with the organization’s purpose, it not only enhances the chances of achieving positive outcomes but also nurtures a culture of teamwork and high morale.
The WorkDove platform offers cascading goals and OKRs, giving employees a visual representation of their progress and how their contributions impact the organization’s overall objectives.
- Operationalize Core Values
In a market where competition for top talent is fierce, finance and insurance businesses can set themselves apart by offering a core-values-driven work culture. Identifying, clearly defining, and embedding the organization’s core values into all performance management practices will create a shared language among team members and promote a work culture that is purposeful and of greater collective value than individuals’ efforts.
A best practice to consider is to implement a recognition program based on the company’s core values. Employees can then recognize colleagues by giving praise and appreciation for displaying positive workplace behaviors that are representative of specific core values, galvanizing positive culture.
- Implement Continuous Feedback Practices
Taking the traditional route of exclusively giving feedback during a once-a-year performance review does little to engage and retain employees. In a fast-paced environment like the finance and insurance industry, effective feedback must be flexible, easily accessible, and ongoing. Embracing one-on-one performance check-ins improves the manager and employee relationship, allows crucial conversations to happen sooner, and gives managers insight into the needs and satisfaction level of their direct reports. Documenting these brief discussions in a digital platform increases accountability and transparency across the organization.
WorkDove Performance Check-Ins have template options for mass assignment, allowing feedback practices to move quickly. Check-Ins also include sentiment pulse checks, encouraging employees to share their satisfaction level in real-time and equipping managers with this knowledge so they can take action if necessary.
- Simplify Performance Reviews
A major component of keeping employees engaged and retained is ensuring that the feedback they receive is helpful, frequent, and digestible. Embracing ongoing feedback throughout the year allows important conversations to happen sooner and more often, leading to performance reviews that are a summary of past performance with a greater focus on the future. When ongoing feedback is implemented, performance reviews become simpler by reducing time spent on filling out the form, and managers can use more of the time to coach and develop employees.
Performance reviews by WorkDove measure both performance and workplace behaviors/core values, which provides a more accurate representation of employee efforts. The Performance-Values Matrix fuels coaching conversations by visually plotting individuals in a quadrant based on these two factors. Giving HR leaders the ability to see all employee placements on a matrix (and calibrate scores where necessary) leads to more informed business and people decisions.
- Provide Clear Opportunities for Growth
In an industry of professionals that are quickly approaching retirement age, it is critical for business longevity to lean on leadership succession planning. Putting parameters in place by which to identify potential future leaders ensures these employees are proactively coached and ready for leadership roles when the time comes.
In addition to leadership succession planning, creating individual development plans for each employee will create a culture of growth and development that encourages top talent to stick around longer, and even invite outside talent into the fold. WorkDove’s platform offers the 9-Box leadership succession planning tool and the IDP+ tool to collaboratively identify future leaders and establish growth plans to help them reach their career aspirations.
- Create a Culture of Appreciation
In times of intense competition in the market and higher-than-ever performance standards, small steps to incorporate recognition go a long way for individual and team morale. As mentioned previously, rooting recognition in core values elevates the process of giving and receiving praise. Utilizing a digital platform that allows employees to recognize colleagues at every level helps to break down silos and enhance organizational solidarity. Recognizing specific positive behaviors publicly provides examples of how to live out the core values that others who are watching can replicate.
- Leverage Employee Surveys
In the spirit of transparency, strategically surveying employees gives HR leaders beneficial information regarding workplace satisfaction, overall engagement, employee wellness, and more. Partnering with a digital tool that allows surveys to be sent internally and externally increases the accuracy of the data and provides visual data analytics to further inform business executives. Though employees value their voices being heard, it is important to remember that surveys should be limited to avoid form/survey fatigue.
WorkDove has several ways to survey employees, including the Employee Surveys tool, a workplace satisfaction survey inside the performance review form, and the employee sentiment survey within Performance Check-Ins.
- Utilize a Performance Management System
Finance and insurance organizations on the cutting edge of performance management partner with intuitive platforms that act as the singular source of truth for all employee experience data. Using a digital tool decreases time wasted on paper performance tracking and avoids the challenges of disparate, out-of-date systems that offer no flexibility. Choosing a system that serves as a hub for a dispersed workforce and can grow with the business is essential at a time when the industry’s landscape is changing.
Looking to the Future of Performance Management in Finance and Insurance
Continuous feedback will continue to replace traditional performance review-only feedback practices. Streamlined coaching and development conversations through user-friendly digital platforms will continue to emerge, along with increased transparency and visibility of data for more accurate reporting.
The finance and insurance industry will enhance employee engagement efforts, such as employee sentiment pulse checks in real-time and satisfaction surveys that are simple, easily accessible, and can be measured quickly by HR leaders. Organizations in this industry that implement people-centered and core-values-based performance management practices will find success in attracting and retaining top talent.
These efforts will be maximized through the implementation of best-in-class performance management systems such as WorkDove. Platforms that offer goal management, effective one-on-ones, integrated performance reviews, professional development, recognition programs, and simple survey options will stand out from competitors. If you are a finance or insurance organization ready to embrace a people-first culture, consider contacting an expert at WorkDove today!
