Tag: performance evaluation

How to Use Performance Evaluation Effectively to Retain Best Talent

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Amidst a global pandemic last year, businesses across the country began to face a new, unfamiliar challenge. 2021 saw the emergence of a global economic trend recognized as “The Great Resignation”, where employees voluntarily left their jobs en masse. Organizations in COVID-sensitive sectors like leisure and hospitality were hit especially hard. According to research from Business Insider, employees within these industries left their jobs at a rate double to the national average (6.4% vs. national rate of 3.0% in September 2021). More recently, the trend has shifted from employees resigning from their roles to increased demand and expectations for the right roles.

Unsurprisingly, human resources has become a major focus. In GGA Partner’s A Club Leader’s Perspective: Emerging Trends & Challenges survey, 67% of club leaders indicated employee retention being a key financial risk to their club and 77% of clubs see employee recruitment and retention being key issues facing the industry moving forward.

The big question facing those charged with governance is, what can we do to retain employees? The immediate solution is to raise compensation, which was indicated in the Club Leaders Survey as the most successful tactic in retaining employees. Clubs seem to be reacting accordingly, indicating planned raises to payroll by an average of 7.8% across all departments. Although increased wages are an important consideration, there’s more to the story.

McKinsey notes the strong connection between employee satisfaction and relational attributes (feeling valued, relationships with management, potential advancement) compared to more transactional attributes (compensation, prestige, role/company). Today, employees are thinking about what they want out of their job now more than ever.

Returning to the original question, how can organizations prioritize relational attributes to increase employee satisfaction?

Understanding the Problem

Surveys are a powerful tool to assess member feedback and provide a quantitative component to member feedback received on a day-to-day basis. The same attitude should be considered with employee relationships. Although results from a full employee survey will mostly be leveraged at the management level, this information is important for all at the club to understand how satisfied employees are through establishment of both an overall and department specific Employee Net Promoter Score, as well as how retention programs are performing.

Start at the Top

Employee satisfaction and retention are key concerns throughout all areas of the business; however, it is important to ensure those charged with governance do not bridge the gap between governance and management. While the board is directly charged with evaluating the General Manager (often its only direct employee report), it can also support establishing the structure and measurement method for evaluating other key management positions, as well as the structure for a comprehensive 360-degree review program for all employees. Boards should aim to establish a policy requiring a quantitative element of performance evaluation to key management figures within the club. This type of formalized, quantitative performance evaluation structure should be “pushed down” from the top level as an example to use throughout the club. This form of evaluation ensures employees are aware they will be provided the opportunity for advancement as well as providing SMART (Specific, Measurable, Attainable, Relevant and Time-Based) goals. The board can then monitor the club’s performance evaluation structure and process through the GM with a requirement for periodic reports at specified intervals.

Determining Quantitative Goals

In developing this performance evaluation technique, identifying which quantitative goals on which to evaluate an employee is an important determination. If the metric does not meet the SMART criteria, the employee may feel as if they are tasked with an impossible goal and satisfaction (as well as ambition) may decrease. Evaluation criteria should relate to key performance indicators established for the entire club that align with organizational goals. For example, if your club is attempting to grow the membership, raising the Net Promoter Score of the membership measured through an annual survey may be a performance evaluator established for the GM/COO of the club. For clubs at capacity, perhaps overall satisfaction score and/or ‘value for dues’ is a more aligned KPI for performance.

Take the below general example of a quantitative approach to evaluation (every club should determine the categories and weightings based on specific KPIs and goals established for their individual club). This score may be used to determine discretionary compensation, such as performance bonuses, raises or be used for evaluating candidates for internal promotions.

Employee retention is a key area of concern for clubs across the country and the world, and those charged with governance can take steps to help improve employee satisfaction throughout their business. These techniques will assist boards in understanding, setting, and maintaining performance standards that flow through the entire club, creating a transparent workplace with clear paths for goal attainment and advancement.

This article was authored by Ben Hopkinson, Director, Evan Van Eerd, Manager, and Adrian Mazzarolo, Senior Associate  for Boardroom Magazine. 

Four HR Questions Club Boards Should Be Asking

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When was the last time your club audited its human resources? Alignment between a club’s strategy and its employee offering is essential in order to enhance the overall club lifestyle, culture, and experience for members and staff.

To determine whether it’s time to reexamine culture, Partner Derek Johnston lays out 4 questions private club boards should be asking. 

Among the most reverberant takeaways from the coronavirus pandemic is the importance of people to businesses. Global business leaders and executives at leading corporations have indicated that the shift toward talent as the most important source of corporate value has continued. The pandemic also seems to be leading an increasing number of talent-forward companies to take an “employees first” approach.

But this is nothing new for large-scale global businesses. Indeed, the third week of August marked the one-year anniversary of the influential Business Roundtable’s statement on corporate purpose – which puts employees, customers, their communities, and the environment on a par with shareholders.

“Human resources” is trending

It’s also nothing new for club businesses. Our continuous research on club industry trends has shown human resource management and labor challenges to be a persisting trend, one which club managers have reported to be rising in importance – before the coronavirus.

In 2019, human resources was ranked the 6th most-impactful private club trend (out of 27) in a global survey of club managers. And, in a separate Canadian club industry survey, it was identified as both a key risk and primary hurdle to modernizing club management while topping the list of areas which managers say are under-supported from an education standpoint.

The early-pandemic question as to whether COVID-19 impacts would accelerate the business community’s move to stakeholder capitalism, or slow it down as companies focus on short-term financial pressures, seems to have answered itself.

For clubs, the people-related challenges previously reported by managers have exacerbated, with topics like employee willingness to work, labor anxiety, staff recruitment and turnover emerging as key strategic questions which club leaders are currently wrestling.

Widespread COVID-19 impacts like club closures, layoffs, and furloughs certainly haven’t helped ease concerns. With significant changes afoot in staffing, retention, human resource availability, and operational adaptations, clubs are presented with a unique opportunity right now – the chance to reevaluate and perhaps reset their culture.

Got culture?

In clubs, culture IS governance. Sound governance is a strategic imperative primarily because it enables, supports, and nurtures effective strategy. And, as the Peter Drucker saying goes, “Culture eats strategy for breakfast.”

This is extremely important for club leaders.

It’s important because it means that no matter how strong a club’s strategic plan is, its efficacy will be held back by team members, staff, and employees if they don’t share the proper culture.

When the breaks are going against the business, as they are for some right now, the people implementing the club’s plan are the ones that make all the difference. While strategy defines direction and focus, culture is the habitat in which strategy lives or dies.

Now is the perfect time to reexamine your club’s culture to ensure staff square rightly with the club’s strategy. In other words, to ensure that your people are the best fit for accomplishing the club’s goals and objectives. Someone who was right for a specific role pre-pandemic may not be right for the same role now. Your business has changed, and some people may need to change too, either themselves or their roles.

How can club leaders reexamine culture?

The first place to start is by understanding what you’re currently doing for employees. Club leaders require a comprehensive understanding of the club’s current approach to human resource management so that they can determine the alignment of people and culture with the club’s goals.

When was the last time the club audited its human resources approach, policies, procedures, and performance? Ensuring alignment between the club’s strategy and its employee offering is essential in order to enhance the overall club lifestyle, culture, and experience for members and staff.

To help you get started, here are four HR questions private club boards should be asking:

1. How does our current organizational structure sit relative to best practice and what recent COVID-related changes should we make permanent or revisit?

Review your club’s current organizational structure, including both employees and contract workers, against best practice structures at comparable clubs locally, nationally, and globally. This review should focus special attention on the roles and responsibilities of human resources within the organizational structure with the goal of highlighting key gaps or divergences from best practice. Often times in clubs, an overly flat organizational structure tends to create ‘siloes’ that breed inefficiencies and bloat staffing levels.

2. Are we both efficient and competitive in the compensation and benefits afforded to employees?

Complete a comprehensive benchmarking exercise which compares compensation and benefit levels of all key staff and for the club as a whole to comparable clubs and other businesses with whom you compete for talent. The focus of this exercise should go beyond salary and hourly wages, factoring in relevant club financial and operating data, benefits packages, member and employee feedback scores, and other market-related information.

The goal is to identify current and accurate reference points for evaluating current compensation and benefits against best practice. There is a high degree of likelihood that there are opportunities in your current compensation and benefits structure to better align incentives and shift compensation to top talent, which tends to support increased productivity and reduced head count.

3. Are our personnel positioned to help us achieve the club’s goals and objectives? Are we helping them achieve theirs?

Assess your club’s performance tracking and review processes. The goal here is to analyze current performance evaluation processes and procedures to ensure alignment with the club’s overarching goals. This requires the board and executive committee to have a focused, clear, and comprehensive understanding of the club’s mission, vision, core values, and objectives.

For maximum benefit, to both member and employee satisfaction, it is incredibly important that performance is measurable and incentivized. The trick is determining the right way to track and measure performance and tie it to the right incentive.

4. Are our staff equipped with the tools they need to succeed? Are they empowered to do so?

Evaluate your club’s current recruiting, onboarding, training, and ongoing relational efforts. This will likely require management meetings and staff interviews to learn about the current approach and unearth any ideas or recommendations your team may have to suggest.

The success of every private club is dependent on the quality of their staff. Recruiting the best talent, integrating them into the envisioned culture, training them for success, ensuring their satisfaction, and ultimately retaining them is an important goal. The outcome from which tends to have a positive financial impact on the club and on the member experience.

After all, an investment in people is an investment in culture and clubs will benefit from this investment.

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