Human resources leaders are leaving behind oldhuman capital management processes, such as performance management,in favor of transforming the workplace and providing a more humanworkplace experience — and all in the quest to retain andrecruit employees who might otherwise go elsewhere.

That's according to the 2016 Society for Human ResourcesManagement/Globoforce Employee Recognition Survey, which found notonly do a growing percentage (40 percent) of HR professionals nolonger believe that performance reviews are an accurate measure ofemployees' work.

Instead they're turning to coaching and values-based reward andrecognition programs to engage employees and improveperformance.

Why? The top three workforce management challenges confrontingorganizations today, according to the survey,are retention/turnover, engagement and recruitment, with 46%of organizations reporting that employee retention is a topchallenge.

In addition, 36% include employee engagement as a top challenge,with workers dissatisfied with their companies morewilling to look elsewhere in a stronger job market.

In fact, according to Derek Irvine, vice president of clientstrategy and consulting at Globoforce, “A recent global researchstudy from Globoforce's WorkHuman Research Institute and IBM'sSmarter Workforce found that employees experiencing a higher levelof humanity at work tend to perform better, and are less likely toquit their jobs.”

In an e-mail interview, Irvine added, “Analysis further showsthat employees with less positive experiences are more than twiceas likely to say they want to leave versus those with much morepositive experiences (44% vs. 21%).”

And in confronting those three challenges, organizations arefinding the methods that perform best in aiding both retention andfinancial outcomes are recognition programs tied to organizationalvalues.

Use of such programs is growing, with 60% of organizations in2016 having one — that's up from 50% in 2012, while the percentageof organizations with recognition programs not tied to valuesdropped to 21% in 2016, compared to 27% in 2012.

But companies have to be willing to devote sufficient resourcesto such programs for them to succeed.

According to the survey, companies that spend 1 percent or moreof payroll on recognition are nearly three times as likely to ratetheir program as excellent (26%), compared with companies thatspend less than 1% (9%), while companies that spend no budget onrecognition are five times more likely to rate their program aspoor, compared to companies that spend 1% or more.

In addition, those with a budget of 1% or more are 3.5 timesmore likely to say their program helps HR professionals attract newjob candidates.

They are also nearly twice as likely to say it delivers a strongreturn on investment (88% versus 48%), and twice as likely to sayit helps retain employees (88% versus 44%).

That doesn't mean it's going to be easy. Irvine wrote, “Thebiggest challenge for HR professionals is to convince theirorganizations to get rid of outdated processes such asthe annual performance reviews. HR professionals need toemphasize that HR is moving toward continuous conversations whereongoing 'check-ins' align employees behind an organization'spriorities. It turns performance management into a more frequent,ongoing and more natural human exercise — building trust withorganizational leaders and optimizing performance.”

But the rewards can be worth it for companies that persist.

Irvine said, “A human-centric approach within the workplacewhere employees are not treated as human capital but as peoplefosters greater humanity and creates more positive employeeexperiences. These are fundamental factors of employee retentionand maintaining a strong employer brand…. When employees feelvalued and recognized for the work they do by the leaders they workfor, they are driven to devote extra discretionary energy on behalfof their companies to help them achieve greater success.”