Feedback Fuel: The Effectiveness of Feedback Mechanisms for Exceptional Employee Engagement in Fintech
In the current dynamic realm of financial technology (fintech), where innovation and agility are paramount, the role of feedback mechanisms in fostering exceptional employee engagement cannot be overstated. Fintech companies that prioritize and implement effective feedback systems create a workplace culture where employees feel valued, motivated, and aligned with the organization's goals. This article explores the importance of feedback mechanisms and how they contribute to the high levels of employee engagement crucial for success in the fast-paced world of fintech.
Below video gives a brief glimpse to the value of proper feedback and providing effective feedback.
https://youtu.be/gi5UfSIf0BM?si=3ODw01D3TzgoU6s_
One of the most popular models used to structure feedback, ensuring the feedback is helpful, constructive and drives change is the SBI (Situation, Behavior and Impact) model. The Situation-Behavior-Impact (SBI) model is a feedback framework commonly used in professional settings. It provides a structured approach to delivering feedback, emphasizing specific situations, observable behaviors, and the impact of those behaviors. Here's a breakdown:
Situation: Clearly describe the specific context or situation in which the observed behavior occurred. This sets the stage for understanding the feedback within a particular scenario.
Behavior: Focus on the observable behavior exhibited by the individual. Use concrete examples and avoid vague or generalized statements. Describe what was said or done in the given situation.
Impact: Articulate the impact of the behavior on individuals, teams, or the overall work environment. Highlight the consequences, whether positive or negative, that resulted from the observed behavior.
The SBI model is effective for providing constructive feedback that is specific, objective, and actionable. It encourages a dialogue between the giver and receiver of feedback, facilitating a clearer understanding of expectations and areas for improvement.
Let’s dive deeper now into the importance of feedback mechanisms
1. Fostering a Culture of Continuous Improvement: Feedback mechanisms create a culture where continuous improvement is not just encouraged but ingrained in the organizational DNA. In fintech, where staying ahead of the curve is essential, employees who receive regular feedback are more likely to proactively seek ways to enhance their skills and contribute to the company's success.
2. Aligning Individual Goals with Organizational Objectives: Effective feedback mechanisms help align individual goals with the broader objectives of the fintech company. When employees receive feedback that connects their contributions to the company's mission, they develop a sense of purpose and engagement, understanding how their work directly impacts the organization's success.
Evidence shows that a company that makes effective use of feedback practices have a greater competitive advantage especially in today’s fierce economic climate (Baker, 2010; Chatman & Cha, 2003). Indeed, feedback is an essential element in organisations because it binds organisational goals with continuity and fluidity, boosts creativity, propels trust, and drives motivation in individuals (Mulder, 2013).
3. Building Trust and Transparency: Trust is the cornerstone of a positive work environment. Regular feedback, whether constructive or appreciative, fosters transparency. When employees trust that their efforts are acknowledged and that constructive feedback is aimed at growth, it creates a climate where they feel secure, valued, and engaged in their roles. Trust is considered to be an important driver of superior alliance performance (Zaheer and Harris 2006).
4. Recognizing and Appreciating Contributions: Feedback mechanisms provide a platform for recognizing and appreciating employees' contributions. In the fintech sector, where collaboration is key, acknowledging the value each team member brings to the table enhances morale, motivation, and overall engagement.
5. Empowering Employees with Development Opportunities: Actionable feedback opens the door to targeted professional development. In fintech, where skills rapidly evolve, employees who receive guidance on areas for improvement are empowered to seek relevant training and development opportunities, contributing to their engagement and growth.
6. Enhancing Communication and Collaboration: Effective feedback mechanisms facilitate open communication. Employees feel more comfortable expressing their ideas, concerns, and innovative suggestions when they know their voices are heard. This enhances collaboration, creating an environment where ideas flow freely, and teams work seamlessly toward common goals. Individual feedback has long been utilized as a tool for facilitating improvement and advancement within organisations and businesses (Levy & Williams, 2004).
7. Nurturing a Two-Way Dialogue: Feedback is most effective when it's a two-way street. Encouraging employees to share their insights and feedback on the organization's processes and strategies creates a sense of ownership. Fintech companies benefit from the valuable perspectives of engaged employees who actively contribute to the company's evolution.
8. Adapting to Rapid Changes: In fintech, where market conditions and technologies evolve swiftly, the ability to adapt is critical. Feedback mechanisms provide a real-time gauge of employee sentiments and insights, enabling companies to make agile adjustments to strategies, policies, or projects as needed.
Strategies for Effective Feedback Mechanisms in Fintech:
1. Regular Performance Reviews: Implement regular performance reviews that go beyond annual evaluations. Frequent check-ins provide timely feedback, ensuring that employees receive guidance and recognition in a more dynamic manner.
2. 360-Degree Feedback: Embrace a 360-degree feedback approach where employees receive input from peers, subordinates, and supervisors. This holistic feedback mechanism provides a comprehensive view of an individual's strengths and areas for improvement.
Rather than focusing just on goals and achievements, 360 reviews also show employees how they work from different perspectives. Well-informed feedback from multiple sources uniquely contributes to employee growth and development.
Seeing how their behaviors and work practices affect different groups of people helps them understand their strengths and what they need to work on. This insight reveals what it will take for the employees to be more successful in their current jobs and achieve their long-term career goals.
3. Employee Surveys: Conduct periodic employee surveys to gauge overall satisfaction and gather insights on specific aspects of the work environment. Use survey results to implement targeted improvements and showcase a commitment to employee well-being.
The success of employee surveys depends heavily on the implementation of a proper follow-up process, that is, the use of the collected data for the initiation of organizational changes (Falletta and Combs, 2002). Despite its importance, the employee survey follow-up process is often neglected, limiting the effectiveness of this widely used management tool (De Waal, 2014). Many times, organizations view the employee survey process as completed once the data have been collected, consequently failing to properly follow-up on the results and use them as a tool to drive change (Church et al., 2012).
4. Open-Door Policy: Promote an open-door policy where employees feel comfortable approaching supervisors and leadership with their feedback. This fosters a culture of open communication, trust, and continuous improvement.
5. Real-Time Recognition Platforms: Implement real-time recognition platforms where employees can give and receive immediate acknowledgment for their contributions. This fosters a culture of appreciation and positively impacts employee engagement.
6. Feedback Training for Managers: Provide training for managers on delivering constructive feedback effectively. Equipping managers with the skills to provide actionable and positive feedback enhances the overall impact of the feedback mechanisms.
Conclusion:
Staying competitive requires engaged and empowered teams, feedback mechanisms emerge as a linchpin for success. Fintech companies that prioritize and effectively implement feedback systems not only boost employee engagement but also create a resilient and innovative workforce. As the fintech landscape continues to evolve, the commitment to continuous improvement through constructive feedback remains a strategic imperative for organizations aspiring to lead in this dynamic sector.
If done right feedback platforms can create a big change. I have explored here the importance of feedback mechanism and strategies that could be used to ensure feedback received is effective. Let me know your thoughts on it.
References
References
1. Baker, N. (2010). Employee feedback technologies in the human performance system. Human Resource Development International, 13, pp. 477– 485. doi:10.1080/13678868.2010.501994
2. Chatman, J. A., & Cha, S. E. (2003). Leading by leveraging culture. California Management Review, 45, pp. 20 –34. doi:10.2307/41166186
3. Church, A. H., Golay, L. M., Rotolo, C. T., Tuller, M. D., Shull, A. C., and Desrosiers, E. I. (2012). “Without effort there can be no change: reexamining the impact of survey feedback and action planning on employee attitudes,” in Research in Organizational Change and Development, Vol. 20, eds R. W. Woodman, W. A. Pasmore, and A. B. Rami Shani (Bingley: Emerald Group Publishing), pp. 223–264.2. Chatman, J. A., & Cha, S. E. (2003). Leading by leveraging culture. California Management Review, 45, pp. 20 –34. doi:10.2307/41166186
4. De Waal, A. (2014). The employee survey: benefits, problems in practice, and the relation with the high performance organization. Strategy. HR Rev. 13, pp. 227–232. doi: 10.1108/SHR-07-2014-0041
5. Falletta, S. V., and Combs, W. (2002). “Surveys as a tool for organization development and change,” in Organization Development: A Data-Driven Approach to Organizational Change, eds J. Waclawski and A. H. Church (Hoboken, NJ: John Wiley & Sons), pp. 78–101.
9. Zaheer A, Harris J (2006) Interorganizational trust. In: Shenkar O, Reuer JJ (eds) Handbook of strategic alliances. Sage, Thousand Oaks, CA, pp. 169-197
6. Levy, P. E., & Williams, J. R. (2004). The social context of performance appraisal: A review and framework for the future. Journal of Management, 30, pp. 881–905. doi:10.1016/j.jm.2004.06.005
7. Mulder, R. H. (2013). Exploring feedback incidents, their characteristics and the informal learning activities that emanate from them. European Journal of Training and Development, 37, pp. 49 –71. doi:10.1108/ 03090591311293284
8. Mulder, R. H., & Ellinger, A. D. (2013). Perceptions of quality of feedback in organizations. Characteristics, determinants, outcomes of feedback, and possibilities for improvement: Introduction to a special issue. European Journal of Training and Development, 37, pp. 4 –23. doi:10.1108/ 03090591311293266
8. Mulder, R. H., & Ellinger, A. D. (2013). Perceptions of quality of feedback in organizations. Characteristics, determinants, outcomes of feedback, and possibilities for improvement: Introduction to a special issue. European Journal of Training and Development, 37, pp. 4 –23. doi:10.1108/ 03090591311293266
9. Zaheer A, Harris J (2006) Interorganizational trust. In: Shenkar O, Reuer JJ (eds) Handbook of strategic alliances. Sage, Thousand Oaks, CA, pp. 169-197
Well described Rehana, you have Described SBI Model. However, do you know there are another similar model? It is AID framework. A- Action , I – Impact , D - Do Differently. Both of these models help you keep focused and to the point. Further , The 360 degrees Performance Appraisal method was first used in the 1940s. 360-degree evaluations go by several names, including 360-degree feedback, 360-degree assessment, and 360-degree performance review. Essentially, it is a process for measuring employee performance by utilizing feedback from peers, employees, clients, supervisors, and members of other teams. The 360-degree feedback approach is very complicated and difficult to implement.
ReplyDeleteThank you Mahesh for this information and the introduction on the AID framework I shall definitely study this method as well.
DeleteHi Rehana, open door policy is interesting way to get feedback and encourage employees to speak up and I think if implemented effectively, can be a powerful tool for creating a positive and productive work environment. By encouraging open communication and valuing employee input, organizations can improve their decision-making, foster innovation, and achieve sustainable success. However, I wonder how many organizations encourage this or continue to maintain this policy?
ReplyDeleteMy thought exactly. The open door policy seems to one of the most simplest forms of feedback mechanisms yet the one that most companies seem to be unable to maintain.
DeleteWell written. By using Real-Time Recognition Platforms, accomplishments are recognized in real-time which fosters a sense of appreciation and belonging among employees. It boosts engagement by showcasing that their efforts are valued and noticed. However, it's important to choose the right platform that aligns with the organizational culture as it might raise compatibility issues or technical difficulties during integration with other existing systems.
ReplyDeleteThanks Eranthi for your comment and yes the right platform is important and ensuring the company adopts a platform that would suit the company background is important as well.
DeleteFeedback Training for Managers - This would be a very useful tool as Manager would be better equipped to deal with the situations they face. and this would also allow them to have a positive mindset when feedback is given.
ReplyDeleteHi Reza, yes definitely would contribute towards a positive mindset and also one that encourages a transparent environment.
DeleteHi Rehana, 360-degree appraisal is much interesting. In my organization also we do have the same practice in performance appraisal. Mentor and mentee both will be participating would have get a better picture of employee. Can this be helpful for personal development?.
ReplyDeleteHi Zahran, I'm glad you have the 360-degree feedback approach in your company and this itself I feel is key to knowing that the company is valuing feedback and is intent on doing something to create change.
DeleteIn overall, the in-depth analysis that you have provided offers excellent direction for fintech organisations who are looking to create a workforce that is both engaged and innovative through the use of strategic feedback practices.
ReplyDeleteA challenge that needs to be considered for improvement is the difficulty of ensuring that adequate follow-up is carried out after staff surveys. Although surveys are useful tools, their performance is based on the organization's dedication to implementing changes based on the information that is collected through them. There is potential for further enhancement of the impact of feedback mechanisms through the strengthening of the follow-up process and the demonstration of real improvements that have resulted from survey insights.
I agree. Adequate follow-up is always a questionable matter, it is not necessarily tangible and cannot be quantified to the extent that most companies expect. Therefore continuous assessment becomes a huge challenge but yet a must do.
DeleteWhen providing feedback it should done constructively and unbiased and relevant to the job. By this employees should be able to gauge that it was done reasonably and reliably. As a result, it is a method for improving performance and driving motivation in workplaces (CIPD, 2022).
ReplyDeleteCIPD (2022) 'Performance feedback: An evidence review', Chartered Institute of Personnel Development, 20 September. Available at: https://www.cipd.org/uk/knowledge/evidence-reviews/performance-feedback/ (Accessed: 19 December 2023).
Reference:
Thanks for the reference share and yes it is a recipe for performance boost and to encourage a positive work culture.
DeleteIn my career as a Manager, I would say that managing negative feedback is the challenging responsibility. It is important for line managers to maintain positive relationships with their teams while also addressing the issues raised. It can strongly impact building stronger relationships with your team and creating a positive and productive work environment.
ReplyDeleteManaging negative feedback is a challenge. Especially these past few years with the economical challenges the country has had to face, negative feedback was quite popular. But having said that I agree that if negative feedback is managed effectively the outcome could naturally be a stronger relationship and increased trust.
DeleteHi Rehana, Nice article! In fintech, employee engagement at its highest level is fueled by feedback. Timely and constructive feedback helps employees stay on track, encourages creativity, and builds a motivated and open workforce in a fast-paced sector. In the ever-changing fintech industry, it's a vital success factor.
ReplyDeleteTo sum up, excellent feedback systems are the cornerstone of outstanding worker engagement in the fintech industry. They support a culture of continuous improvement, alignment with company objectives, communication, trust, empowerment, and adaptability in the workplace. Fintech businesses are better positioned to promote high levels of employee engagement and drive success in this quickly changing industry if they prioritize and put these feedback strategies into practice.
ReplyDeleteThe article adeptly explores the pivotal role of feedback mechanisms in driving exceptional employee engagement within the dynamic fintech sector. It emphasizes the importance of fostering a culture of continuous improvement, aligning individual goals with organizational objectives, building trust and transparency, and recognizing contributions. The incorporation of the SBI model and evidence from research adds depth to the discussion. The suggested strategies for effective feedback mechanisms, including regular performance reviews and real-time recognition platforms, offer actionable insights. Overall, the article effectively highlights how well-implemented feedback systems contribute to the success of fintech companies in a rapidly evolving landscape.
ReplyDeleteRegular performance reviews are what's critical for progression. Ad-hoc reviews will create a brief burst and the objective is lost thereafter, therefore continuous feedback checks are important for growth.
DeleteGreat article. It is well put together and presented. Agree with your analysis. Feedback mechanisms, structures and models such as AID and SBI are essential for any organization to succeed.
ReplyDeleteFor me having the right structure, mechanism and model is important but what is VITAL is point 6 in your analysis above. ( Feedback training for managers) Without this the whole exercise is pointless and futile. For these models to be effective then the right training needs to be provided for the managers who are actually executing this so they do it in the right manner effectively.
It is only then that the models can really add value to the organization and enhance outcomes for the business/organization.
Research shows feedback can sometimes hurt performance too if not done effectively. - Harvard Business Review - The Power of Listening in Helping People change.
( https://hbr.org/2018/05/the-power-of-listening-in-helping-people-change)
Also if exceptional employee engagement is to be achieved via feedback mechanisms and models due attention would also need to be given to providing not only qualitative but quantitative frameworks within the models which provide a strong clear standard or deliverable which is clearly defined which in turn builds trust as the target or KPI and corresponding result is non ambiguous. An interesting article which clearly shows what can be achieved with proper execution and the importance of doing so to increase emplyoee motivation, engagement and productivity.
Thanks Sheron. Feedback training for managers are yes important to drive change.
DeleteWell explained article. And as a person I believe the importance of maintaining a continous improvement culture. It was invented with Japanese lean and other management theories especially designed for manufacturing sector. However any type of organization would benefits of maintaining a continuous improvement culture, in a highly volatile environment.
ReplyDeleteAgreed. Continuous improvement is tough but definitely the best way forward.
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