The “gift” of feedback is not only something discussed by a manager and his or her direct report during the performance management process, as important as that is. But I also believe it’s also the foundation for two-way communication at that can lead to real consensual decision-making at an organization.

Understanding the value of feedback has become even more important now, when pulling back the curtain on employee engagement has become an increasingly complex affair, and the changes and challenges facing the communication industry may be unprecedented in their scope and magnitude.

The traditional top-down cascaded messaging pattern of old has lost traction with employees, and thorny new issues have emerged, such as how to cut through the clutter of too much information, and how to make sure messages connect with an employee audience that has vastly differing preferences when it comes to how they want to receive communication –- differences based on age and demographics, remote or central office workplace locations, or the preponderance of offerings available through next-generation communication platforms like social networking and Web 2.0.

How should corporate communicators respond? Most Baby Boomer employees are comfortable with e-mail, yet many Millennials and Gen-Xers want to communicate exclusively through collaborative social networking channels (as they do outside of work) or through instant messaging or texting, while some older Traditional employees may not be connected electronically at all –- voicemail be the only viable option.

The challenges and choices facing communicators are legion, yet the priority to engage employees has never been higher; namely, the priority to acquire and retain key talent and avoid the steep cost of rehiring and retraining, the priority to inspire and motivate employees to achieve new levels of productivity, and the vital role of communication in helping employees to make an emotional connection with what they do at work and their value to the organization.

Incorporating feedback into the decision-making process is perhaps the most essential thing organizations can do to build engagement. This is simply a good management practice. John Donahoe, chief executive of eBay since March 2008, understands the value of feedback to gauge his own performance, and he understands the value of feedback to lead others toward better performance. In The New York Times Corner Office column last Sunday he said he relished the time spent at a talent firm (Bain & Company) because he received rigorous performance reviews every six months or so.

Sounds counter-intuitive, eh? He must have loved long division and studying for exams back in school too, right? No, he’s not insane– Mr. Donahoe is on to something: he understands the vital importance of feedback.

“In many ways it was liberating, because I realized feedback is a gift. I try to do the same for the people around me, and give them open, objective feedback offered in a constructive way,” he said.

“Then each person says, Here’s what I’m good at, here’s where my development priorities are and where I want to get better.”

The rules of engagement have changed, and continue to move swiftly in the direction of a two-way communication model that values employee feedback, consensual decision-making and transparency at senior levels of the organization. Companies need a plan to restore trust throughout the organization and they need to have an effective two-way communication model in place. Do senior leaders at your organization understand the vital connection between employee communication and a company’s financial performance?  Start with a methodical and ongoing evaluation of your communication practices. Are senior leaders listening? Does the harvesting of employee feedback result in real consensual decision-making? Are front-line employees being managed in a way that inspires engagement and drives them in the direction of work they are good at — work which uses their natural talents?

Where and when does change begin? Embracing the gift of employee feedback is a fine place to start — it leads to the kind of change in management style espoused by business leaders like John Donahoe at eBay. Only when organizations embrace the gift of employee feedback can they experience the kind of incremental and ongoing change that leads to increased employee engagement, retention and productivity, while making the best use of limited financial resources in a challenging economic environment.

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