Foster Employee Feedback to Spur Business Growth

By Joe Taylor | Posted May 22, 2013

Email may have killed the company suggestion box, but many business leaders have discovered that soliciting direct feedback from employees saves money and improves team morale. However, raising the level of feedback discourse from "free donuts every day" to ideas that generate significant cost benefits doesn’t happen overnight.

This five-step regimen can help you give your employees a bigger stake in the company's success.

How to Generate Employee Feedback

1. Embrace structured feedback

"Nothing happens without structure," says David Hassell, CEO of 15Five, an employee-feedback software company that helps its clients drive success. "When you put a simple structure in place, it guarantees that you are going to produce results."

A structure that lets you quickly gather employee feedback, Hassell added, helps small business owners stay on top of important company issues on a regular basis. Given his line of business, it's not surprising that Hassell believes that "If you leave this to chance, you risk not getting the feedback until it's too late for you to act on it," he said.

2. Keep feedback simple

15Five bases its system on a practice first popularized by Patagonia founder Yvon Chouinard. Chouinard asked employees to spend 15 minutes every week on a status update that takes managers just 5 minutes to read.

While the system standardizes routine status updates, Hassell says that brainstorming and idea generation often emerge after employees get comfortable with the process. Bain & Company promotes a similar system, the employee NetPromoter Score (eNPS), that uses "short but meaningful" surveys to quantify employee satisfaction and to help suggestions bubble up.

3. Schedule feedback cycles

Many eNPS participants receive surveys quarterly, while 15Five's end users get weekly reminders to check in. Hassell says that a predictable routine removes uncertainty around employee participation. "By simply asking the question on a regular basis, there is more comfort over time about sharing what's really happening. Fear diminishes with the constant communication and with realizing that the relationships actually improve over time when we're more open and honest."

4. Separate feedback from performance reviews

Even with a culture of communication that embraces real-time feedback, some employees worry that their transparency could lead to retaliation from upstaged peers or frustrated managers. ENPS practitioners disguise employee details, which helps managers and business owners focus on prioritizing issues instead of grinding individual axes.

5. Report the results and share the benefits

Both 15Five and eNPS emphasize fast, transparent action when employees identify key areas of opportunity. State and federal agencies have discovered that employees offer the most specific, actionable feedback in exchange for a share of the savings.

For example, a program in Phoenix offers 10 percent of shaved budgetary costs as an incentive for workers to suggest ideas. Over a 10year period, the program paid $163,000 in bonuses from a pool of $15 million in eliminated costs. Likewise, civilian Army employee Daniel Stevens earned a $4,739.90 bonus for an idea that saved his unit $20,000 a month.

Stories like these can inspire your employees, especially once your team understands how their input affects your company's bottom line. When everyone in your business connects the dots between your company's fiscal health and their long-term job security, your top talent may generate their best insights to help preserve cash while delighting customers.

Joe Taylor Jr. has covered personal finance and business for more than two decades. His work has been featured on NPR, CNBC, Financial Times Television, Fox Business, and ABC News. He recently completed a personal finance book entitled "The Rogue Guide to Credit Cards" (Rogue Guide Books, 2012).

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