The Importance of Establishing Core Values Before Evaluating Employee Performance
In the midst of changes or even business-as-usual, leaders and employees need to know that they have a solid foundation upon which their organization is operating. A company’s core values can serve as that foundation.
What are Core Values?
Whether we acknowledge it or not, each of us has our own personal core values. They help us make decisions and know where our energy is best spent. A company’s core values are similar. Core values should be words that help drive decisions in the company, words with which employees resonate and possibly even reflect as their own personal values, words that provide roots in time of change or uncertainty. Personal core values and corporate core values are more aligned today than ever before in the business world.
People have changed the way they view their jobs. The “clock in, clock out” culture is a thing of the past. Research shows that workers now value things like strong relationships with coworkers and company leaders in the workplace. People also want to feel connected to the company itself. A 2023 Gallup Poll showed that only 33% of employees are cognitively connected to their work. This means that 67% of employees feel disconnected from their work and/or the company.
When workers are engaged, it leads to increased productivity. The positive correlation between workplace engagement and an increase in productivity and retention suggests that a culture where employees are actively engaged can bring very positive benefits to a company, including an increase in overall company profitability.
Creating a Connection
Anyone operating a business over the last couple of decades understands the impact of workforce turnover. The direct costs are already something to scoff at, but then the ripple effect of one employee’s departure can be felt by many, for a long time, and can be financially impactful. Pundits nationwide, including our experts here at Fahrenheit, have opined on the benefits of investing in employee retention – particularly as this country has so recently experienced the most severe recession since the great depression (2007-2009), business shutdowns caused by the global pandemic (2020-2023), and the most recent fallout of the pandemic- the Great Resignation (2021-2022). Regardless of whether we are facing yet another recession, the cost of replacing an employee can take a big blow to the budget and managers should invest in ways to keep the right team on board. But handing out monetary incentives is no longer the most impactful way to increase loyalty. Employees want something more personal – to have purpose and a sense of belonging.
What can employers do to create a culture of engagement?
Establishing core values creates somewhat of a profile for a company. It says, “this is who we are and why we do what we do.” Today’s employees want to know exactly that. Factors that contribute to employees not being engaged include “less clear expectations, lower levels of satisfaction with their organization, and less connection to its mission or purpose.” A company can foster a connection to the organization by making employees feel they are part of the bigger picture.
Employees that resonate with their company’s core values will feel a stronger connection to the organization and have more confidence in their ability to continue to meet expectations. Since core values serve as guidance in how a company expects to operate, a clear understanding of the company’s core values also empowers employees to make decisions within the realm of their respective role. It gives them a sense of agency over their work as well as parameters to know whether or not the work they are doing supports the greater mission, vision, and values of the organization.
Employees Want Feedback
While historically there may have been some dread associated with the term “annual review,” there shouldn’t be! Executed properly, performance management is the best way to make sure everyone is on the same page. Performance management should include ongoing conversations and 360 feedback to ensure that there are no surprises, adjustments can be made along the way, and everyone is in alignment. In fact, the most prominent elements for a decline in employee engagement were studied, and at the top of the list was lack of feedback and performance focus.
Employees are seeking to feel connected to the organization through meaningful conversations with management about more than just their ability to meet expectations. Employees want to better understand organizational goals, collaborative opportunities, and prioritization that aligns with management’s vision for the company.
Establish Values Before Evaluating
While an employee’s goals and objectives are often tied to quantitative targets set by the company, the competency component of performance reviews are tied more to the employee and the company’s core values. Establishing the company core values before implementing a performance management program leads to creating a culture of success for both employees and the company. By doing this, you are providing clarity for the what, why, and how you expect the company to operate. This gives employees a foundation where they can thrive in their role and know that they are supporting the greater good of the organization.
Whether you need help to build a strong performance management program or to articulate your company’s core values, Fahrenheit’s experts are here to help!
only 33% of employees are cognitively connected to their work. This means that 67% of employees feel disconnected from their work and/or the company.
About the Author
Megan Price provides a broad range of experience in strategy development, operations project management, organizational behavior, corporate culture, stakeholder relations, process improvement, and change management. She encourages a collaborative process and tailors work to her individual client.
