By Mike Cotton, talent development specialist for MindLeaders ThirdForce
The Personal Development Plan (PDP) is recognised as a vital component of successful, 21st century businesses. Undoubtedly, outlining a set of goals, objectives and activities to help employees improve their performance has a direct and positive impact on the overall goals of the organisation. However, traditional PDP templates are fast becoming obsolete in an age where business and customers want their information instantaneously. Mike Cotton, talent development specialist for MindLeaders ThirdForce, examines the benefits of PDPs, outlining how implementing a modern solution can result in increased employee retention and ROI.
A PDP that offers information and results in ‘real time’ is vital for business success in the highly competitive and economically challenging environment of the twenty first century. A PDP provides a framework that allows individuals within an organisation to identify the areas of their strengths and weaknesses, and develop and guide to optimize and capitalize on their existing capabilities and skills.
Implementing an effective PDP alleviates the need for managers to spend vast amounts of time monitoring employee development. Meanwhile, the performance appraisal process (PAP) ensures that there is standardisation across an organisation by providing visibility in terms of employee and organisational goals. Goals are cascaded down from the CEO to managers and all other employees, which enables everyone to align their goals to those of the overall organisation. An effective solution should allow employees to create a PAP for themselves based on their role and any future roles they have agreed with their manager or organisation as a whole; once this is created a PDP can be created, ready to action over a specific period.
Benefits for businesses
By aligning PDPs with smart goals and cascading these down from the CEO to corporate, the objectives of the overall organisation are clearly visible and individuals can see exactly what impact they are having within these objectives. They can see where they sit within the company and identify not only the areas in which they need to improve, but also the means by which they can do this. When the organisation is aligned as much as it can be through a system, employees can see how their components feed into the overall organisation strategy and realise the implications for the organisation when they miss their individual goals or targets.
Old versus new
The traditional PDP is paper based, which often results in it being filed away out of sight. Consequently, understanding what the company is driving towards is impossible for employees, other than the individual who created it. Similarly, it is typical for paper based PDPs to rarely get completed or even updated, rendering them useless as a working development tool.
The relevance or benefit of traditional PDPs in 21st century business, therefore, is dubious. Automated, modern PDP solutions are undoubtedly the way forward as they provide better clarity for managers, allowing them to quickly see if employees are hitting or missing their goals. If specific areas are not performing as well they should be, the functionality exists to drill down through the organisation and investigate this further and identify the reasons behind it. By effectively highlighting failures and potential hurdles, organisations can begin addressing and rectifying these immediately.
Increased employee retention and ROI
The PDP focuses on what the employee wants and needs to improve themselves, while cementing the idea that there is value to every single person within an organisation. It presents an opportunity for each employee to move forward along their career path, outlining what achievements are necessary in order to reach the next level within their role. A PDP can also be put in place for a future role that individuals can then work towards. The fact that this plan is clearly visible within the organisation gives employees further support and encouragement. When an employee can clearly see that they have a plan in place to become, for example, an area manager within three years, the likelihood of the company retaining them is increased. As the employee drives towards this future plan, their capabilities and delivery are increased, thus yielding a positive effect on the organisations overall ROI.
A 2010 Chartered Institute of Personnel Development (CIPD) research report entitled ‘Talent Perspective’ further highlights the importance of implementing a working PDP in order to increases employee retention and ROI. Specifically it found that concepts such as ‘talent mobility’ encompassing career development, succession management, talent planning and development planning are becoming more and more important in today’s marketplace. Similarly, a Learn Direct research report (Nurturing Talent 2008) found that “developing and implementing a long-term strategy focused on nurturing talent provides real business benefits. Staff costs are often the single biggest outlay for organisations. Therefore, it is logical that this investment is managed effectively to ensure employees are retained and developed in a way that helps improve business performance.”
While a somewhat unstable economic climate may not encourage investment in long-term strategies to enhance employee retention and increase ROI, business experts and those with their finger on the 21st century business pulse have identified investment in human capital as key for growth and success.
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