You know giving employee feedback can increase performance, but did you know it can also increase revenue?
Giving feedback has been known to increase employee performance. Human beings are designed to want to be accepted and seek social approval. When an employee does a good job, words of praise and encouragement are actually known to increase their motivation to seek more of the same. In other words, positive feedback actually elicits a position response from the person.
On the other hand, negative feedback motivates us to perform better. At the very least, the fear of negative consequences such as embarrassment or losing our job makes us want to do better.
So, either way, feedback helps with employee performance. It’s important to sprinkle both positive and constructive or negative feedback in your feedback arsenal.
So, how does this contribute to revenue, you might be asking. Well, here’s how.
I call it the “All Roads Lead to Revenue” map. When you give positive feedback, it increases employee engagement. When employee engagement increases, employee productivity increases. When productivity increases, employee performance increases. And, you got it, when employee performance increases, the business makes more money.
Ok, this is all fair and good, but you might be asking exactly HOW employee performance increases business revenue. After all, it’s not necessary that there’s a direct relationship between performance and revenue. I’m so glad you asked. Let’s dig a bit deeper.
Let’s start with the employees at the very front line of your business. THe ones that deal with customers all day long: your customer service people.
Better customer service leads to customer loyalty. Better product or service development leads to more customer referrals to your products. Better sales leads to closing more deals. Better internal departments like administration, operations, HR and finance lead to better support to core functions which lead to better product development, sales and customer service.
Do you see how increasing performance in every single department in your company can directly impact revenue. Of course the reverse is also true. If you don’t focus on these areas, don’t give feedback, the areas suffer and so does your top line.
So, here’s what I want you to commit to moving forward:
- Commit to giving regular feedback to your employees
- Give a mix of both positive and constructive feedback with actionable things they can implement
- Ask for feedback on you and the company processes from both employees and customers. Continuous improvement is key to increasing revenue.
If you feel like you could get better at your feedback game, then let’s hop on a call and put some actionable strategies in place.
Now, I want to hear from you. Comment below to let me know which of the three actions you’re going to do first.
If you’re building a high performance team, I’d encourage you to take a look at this video and this one to lead and retain your top employees.