You can find yourself very busy without being very efficient. Performance Management is what every business should be doing to ensure rapid and efficient development. Because when you set up work processes correctly, it becomes immediately clear what needs to be optimized, where you can save money, in which direction it is better to move, and what to cut off. It is also an excellent opportunity to rethink employees’ productivity, evaluate the contribution of each of them to the business and decide what to change to improve performance indicators. Implementing the principles of Performance Management will help.
What is Performance Management? Performance Management is a system of indicators that you can use to determine the level of performance of employees. This is important to help employees maximize their potential and find new solutions to improve business performance and profitability.
Feedback from managers
Feedback from leaders on the work of their subordinates is something that more than 56% of employees lack, according to the SHRM study. Lack of feedback is much worse than negative feedback towards an employee. While not the most pleasant, feedback is the easiest way to determine what the employee is doing wrong, where they need help, and what can be done to improve their results.
The 4 best formats for providing feedback:
- a meeting with the team to discuss each employee’s performance (often after testing employees to determine performance levels);
- 1: 1 meeting with those who have low productivity levels (the goal is to decide what to do next, set goals to help eliminate the problem);
- mentoring (when a manager becomes a mentor to employees and helps them become better and more productive through individual support);
- informal conversations over lunch, grab a cup of coffee.
This technique allows you to assess an employee’s strengths and weaknesses, skills, and abilities. The value is that such an assessment can be given by people with different roles in the company – ordinary employees as well as top management, customers, and partners. First, the evaluation is carried out, then the results are discussed – in person or by a group of employees.
These should be formal documents that clearly define the desired results, the resources to achieve them, and the indicators against which progress will be measured. Such plans can be created individually, for the entire department, or even a company.
Goals help employees not procrastinate but to be in constant motion, to engage in the processes. However, it is essential to set goals at the beginning of the month and evaluate the actual results. Then, if necessary, you need to regularly track them, discuss and look for new solutions to achieve them.
There are 2 crucial points in goal setting:
- They should be consistent with the overall goals of the company.
- They need to be established using the SMART method. This is when goals are specific, measurable, achievable, relevant, and limited in time.
Awards, recognition, and other tools of intangible motivation
We think you know that money is far from the only and effective way to motivate employees. It is also essential for them to recognize their successes, personal gratitude from the boss, get an extra day off, etc. From crafting social media shoutouts to celebrating work anniversaries, there are several simple and effective ways to recognize and reward your employees.
What are the benefits of performance management?
Gallup research shows that companies with highly skilled employees have the following competitive advantages:
- 17% higher productivity;
- sales grow by 20%;
- 21% higher profitability;
- 41% fewer absenteeism;
- reduction of turnover by 24% (in organizations with high turnover);
- decrease in turnover by 59% (in organizations with low turnover);
- 70% fewer incidents related to employee safety;
- 40% fewer product defects.
How can you improve the employee performance management plan?
First, you need to assess what kind of employee performance management plan you have now. If it’s not in place yet, you should start small – implement one tool at a time. This way, you can keep track of what is working best in your team and what is worse and needs improvement.
Here are some ideas to help you shape your Performance Management plan.
1. Organize ongoing personalized feedback for your employees.
Above, we wrote ideas on the best formats for providing feedback to employees. However, if you don’t have a feedback culture, you should start with ongoing personalized feedback. It must be easy to organize, doesn’t take a lot of time, and is convenient for everyone. For example, host a 1:1 meeting once a month or upon request.
You can also try introducing informal corporate chats. There, employees can share what’s going on in their lives outside of work.
Consider other options for providing feedback – semi-annual formal reviews, quarterly progress reviews, monthly individual reviews, and weekly check-ins.
2. Competently formulate questions to assess employee performance.
Today, questions like “How valuable is this employee on a scale of one to ten?” But, unfortunately, managers don’t understand how to answer them correctly, i.e., every point from 1 to 10, so the final score is highly subjective.
Therefore, it is important to ask the questions as accurately as possible so that they can be answered easily and quickly. Be sure to correlate them with the company’s goals, with the qualities of the most important employees for measuring productivity.
Another recommendation is to limit your performance surveys to a few key questions. So often, a long list of necessary questions is why surveys are either filled out somehow or not filled out at all.
3. Evaluate each metric separately
When managers try to evaluate both employee performance and their salary with a single survey, it doesn’t lead to anything good in the compensation system. This is because employees start to believe that they will get a raise based on the test and choose the answer options that contribute to that. As a result, the results are not valid. Therefore, you can’t work with them.
4. Discuss the future of the company with the employees.
Often effectiveness depends on whether or not a person understands a common, global goal that they are helping to achieve. Gallup recommends holding ad hoc meetings to discuss what’s happening in the company now, what needs to happen next, and how to get there. It’s essential to clearly explain what results you expect as a manager, what behaviors, and how you will evaluate each employee’s outcome.
This should not be a monologue but a dialogue with active participation from the team. It is vital that employees are heard, that they get answers to their questions. Give them these in return for efficiency gains.
5. Reinforce strengths, comment constructively on weaknesses.
Top managers at The Clemmer Group studied that employees’ productivity drops by 27% when their low-performance metrics are explained through weaknesses. As a result, their self-esteem plummets, Impostor Syndrome occurs, and the desire to keep trying diminishes.
All it takes is to change the approach and find solutions to improve work results through employee strengths. The same study showed that this action can improve efficiency by 36%.
Please note that this approach does not mean that you have to ignore the weak areas of employees. On the contrary, it means that it is better to allow the strengths to develop. And it is better to talk about the weak ones specifically, objectively, with arguments and facts.
6. Help your employees grow professionally.
LinkedIn research shows that 94% of employees are willing to stay with a company longer if it offers professional development opportunities. Therefore, it’s essential to talk to your team, ask everyone what kind of training he would like to do, and develop a direction.
You can organize in the company something like mentoring or just professional development programs within the organization through the following actions:
- set more serious, complex, but achievable goals;
- give additional responsibilities, tasks;
- offer to change roles in the team, and give everyone who wants it the opportunity to try their hand at something new;
- allow you to undergo training by covering some of the costs.
7. Improve your software.
There are always processes that can be simplified, refined, optimized, and automated. Therefore, it is crucial to have good software that helps you track where and what needs to be improved and allows you to do so.
What is a solution to improve Performance Management?
We at Enxoo have developed an HR solution for measuring and managing employee performance – Skilo. With its help, you can set goals for the whole company and employees individually, set employee goals, conduct a 360-degree review, give reviews, and award badges to engage employees. Everything in one place and in conjunction with other modules – for employee management, recruitment, onboarding, time reporting, and company chats.
If you are ready to improve employee performance right now, we suggest testing our ready-to-use comprehensive HR solution – Skilo.
Skilo is a Salesforce native app that provides a ready-to-use talent management solution. It streamlines, simplifies, and unifies the end-to-end process of talent acquisition, development, and retention. Skilo provides effective performance management, competency frameworks, along with skills development, career planning, training management, feedback, reviews, and social employee engagement. For more information, please visit www.skilohr.com, Skilo Linkedin profile, and Skilo Facebook page