Look past a modern machine shop’s expensive machines and fancy automation, and you’ll find the manufacturer’s most valuable resource: its people.
Along with their inherent human value, people matter to your business primarily because of what they are not. While you can hop online and order your next mill or a new alloy, people aren’t products to drop in a shopping cart. Finding the right people for your team is challenging, even in the best of times. And the current labor shortage has made the challenge even greater.
That’s why small and mid-sized machine shops need to actively, intentionally, and regularly connect with their people, then lean into those connections to develop effective team-building and retention-boosting strategies.
Where should you begin this approach? With performance reviews.
Are You Avoiding Performance Reviews?
Many manufacturers avoid performance reviews for completely understandable reasons. Maybe you’re not ready to offer raises, or you’re hesitant to tackle a difficult conversation, or you simply don’t want to upset anyone.
Or maybe you’re thinking, “But a 2019 Gallup poll revealed that only 14% of employees strongly agree [that] their performance reviews inspire them to improve.” (And you’d be correct.)
As the shop owner, however, it’s your responsibility to ensure regular engagement with every employee. Call it feedback; call it a performance review; it doesn’t really matter. The point is that, without consistent employee engagement, you’re all but guaranteed to open your email one day and find a valued employee’s two-week notice—and you won’t even know what drove them to quit.
Did they get fed up with a broken process? Was morale unbearably low? Are other employees now considering their own exits?
Some businesses have settled for mocking the pandemic era’s Great Resignation, calling it the Great Regret as some of the “voluntarily unemployed” struggle to find new jobs. However, many ex-employees insist that they have zero regrets, which may indicate that their work experiences had become truly intolerable.
Did their bosses know? And if not, why?
Reimagining Performance Reviews
As the Gallup article explains, businesses are unfortunately prone to using performance reviews as annual, one-sided evaluations of an employee’s achievements. That approach, however, creates anxiety among employees—particularly when they aren’t receiving regular feedback throughout the rest of the year.
According to research from Officevibe, “82% of employees really appreciate receiving feedback” of any kind, and 65% said they wish they got more feedback from their managers.
Modern machine shop owners should take this data to heart. Your employees want to hear from you. They want to be great at their jobs, and they want to be valued for their efforts.
“Correction produces change, but appreciation produces great work,” say these Forbes contributors.
The implication is that ongoing, positive engagement throughout the year has more impact than a once-a-year sit-down in which you point out an employee’s faults.
Or think of it this way: if one employee’s departure can instigate other departures, how much more can one employee’s job satisfaction inspire satisfaction among other team members, too?
Creating the Perfect Manufacturing Performance Review
High-quality performance reviews are interactive conversations in which an employee and their manager collaboratively evaluate that employee’s experience as a whole.
Therefore, the “performance” part isn’t singularly tied to the one employee’s actions. A performance review should comprehensively examine any factors that speak to one important question—a question posed by NTMA’s own president, Roger Atkins: “What can we do to make your job experience better?”
Here are more conversation prompts that will help you discover the needs of your people:
- Do you have access to the resources you need to do great work?
- Are you interested in what you’re working on?
- Do you feel appreciated for the work you do?
- Have you previously expressed any concerns that have not been effectively addressed?
- What’s missing that would make you happier in your role?
- How can I better support you in your day-to-day work?
- Is there anything that would help you continue to do work you’re proud of?
- Do you have any ideas to share that would improve the company as a whole?
In addition to more casual interactions, you’ll want to schedule planned performance reviews monthly or quarterly, depending on the size of your shop. Many modern machine shops also rebrand their performance reviews to help reduce the stigma associated with traditional assessments. Instead, refer to these meetings as recaps, check-ins, conversations, discussions, or “Free Lunch with the Boss”—whatever works for your people.
To keep your review conversations focused and fluid, experts recommend having separate conversations about compensation increases.
Learning from Performance Reviews
When you approach performance reviews as opportunities for team-wide learning and growth, the process becomes exciting! You’ll discover unexpected skills and interests, find out who your natural leaders are, and get introduced to interesting new perspectives.
Fox Business recently reported on Fidelity Investments’ 2022 Career Assessment Study, sharing that, beyond pay, job-seekers were most concerned about “medical benefits (54%), retirement savings (49%), and bonuses (34%). The most important non-financial benefits were schedule flexibility or remote work (65%), paid time off (59%), and professional development (28%).
As you consider new ways of taking care of your team, try to separate areas of flexibility from your non-negotiables. For example, if salary increases aren’t currently on the table, can you offer shift flexibility for employees who prefer four 10-hour shifts to five 8-hour shifts?
Even the simplest adaptations can build loyalty and drive growth.
How to Jumpstart Your Next Performance Review
Use these four tips to jumpstart your next (or first) performance review:
- Keep it conversational. Overly formal presentations and too much emphasis on data can intimidate your people.
- Limit the time. Conduct performance reviews frequently enough that one can be completed in an hour or less.
- Stay positive. Focus on collaborating with your employee to solve problems, consider challenges, and inspire excellence.
- Set milestone follow-ups. Once you’ve identified a need, establish a plan for addressing it, and create a timeline for completion.
The Future Is Bright for Modern Machine Shops
Economists estimate a bright, busy future for US manufacturers, so now is the time to establish a reimagined approach to performance reviews.
Learn the latest manufacturing business practices from your NTMA community. Along with our machine shop resources, links to training, and industry events, you’ll benefit by talking to other NTMA members and learning how they’re creating job satisfaction for their teams.
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