28 SEP, 2016

HR Software: A Sea Change In Company Mindset

Fixed Vs. Growth Mindset Sign

In any workplace, employee performance depends on motivation. The type of motivation you provide for your employees can impact both their happiness and the end results for your company. But each employee has a distinct personality, and as their lives continue from day to day, their hopes, dreams, and vision for the future will evolve. So it’s no surprise that many companies are shifting away from traditional paperwork and annual performance reviews toward HR software, with its increased convenience and timely feedback programs.

Carol Dweck, a psychology professor at Stanford University, developed a theory that offers an understanding of individual personalities and even corporate culture as a whole. Dweck categorizes attitudes and actions in two different mindsets, labeled the fixed mindset and the growth mindset.

Fixed vs. Growth Mindsets

A fixed mindset implies that qualities and attributes are static possessions: you have talent, or you don’t. People with this mindset thrive on competition and rewards, which help them see themselves as winners. But they’re also vulnerable to risk avoidance and making excuses, as they feel that failure defines them as much as success.

In contrast, someone with a growth mindset focuses on change and improvement. Failure is an opportunity to learn, challenges help grow skills, and the future is whatever you make it as long as you keep trying.

No person or company operates with just one of these mindsets. While someone might work their way up from the mailroom to the corner office in, say, title insurance, working your way to the top of the professional opera circuit is difficult without the right vocal chords. Natural talents and the ability to improve are both essential to success.

Up until very recently, the traditional workplace environment encouraged employees to develop fixed mindsets. Gathering and recording feedback with analog methods was time-consuming and expensive—there are only so many filing cabinets you can fit into an office. Without easily accessible data, managers relied on their best recollections during the annual performance review. In this system, in-the-moment presentation, politics, and fudged facts did more to determine pay and advancement than actual performance.

How Companies are Changing Their Mindsets

GE is a famous example of this type of policy. For decades, their performance review system included a “vitality curve.” After employee evaluations, each employee received a rank in the company, and GE fired the bottom 10%. This threat created a perverse incentive — instead of motivating better performance, it made employees desperate to avoid failure by any means necessary.

GE is now phasing out performance reviews altogether. With advances in HR software, they’ve created a performance development app, letting their employees give feedback in real time. They found that a trial period of the new performance program increased productivity fivefold.

At BambooHR, we’ve found that using a robust HR software platform to develop a connected culture provides employees with internal motivation. We train our employees to be open: while we have regular peer and manager reviews, there’s no need to wait for a yearly review to provide input. It works better to recognize employees’ contributions in the moment, build relationships between managers and reports, and move forward toward our goals.

There’s no one-time external reward that will make your employees engage with your company or stick with your vision. Investing in your employee’s growth means going beyond the baseline of fair compensation with continuing rewards and recognition. Using HR software to facilitate regular interaction, feedback, and rewards makes a big difference in employee satisfaction and performance.

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