As a small business owner, you know the importance of vision, strategy, and reaching your corporate goals, and you know you can’t do it alone. You need every member of your team performing at their best to support your company’s initiatives, so to get them performing like they are playing in the NFL, try using regular planning & collaboration, employee coaching, and a steady stream of feedback.
Performance management is not about an annual review – it’s an ongoing process. Study results appearing in FORTUNE reported 61% of employees to say they would welcome immediate, direct feedback, but only 24% say they get it. Meanwhile, Achievers Chairman, Razor Suleman, reported over 50% of CEOs to believe their employees do get it because chief executives giving their direct reports regular feedback think everyone down through the ranks is doing it as well.
Having regular conversations with your employees about their performance and their goals is critical to engaging and retaining them and will give you a pulse on their level of job satisfaction. It also demonstrates a corporate commitment to supporting and developing employees to be their best.
Performance reviews are part of a process that includes the creation of individualized employee goals, tracks their progress, identifies strengths and weaknesses, and serves as a regular means for two-way communication between employee and manager. Reviews also provide a means to allow underperforming employees an opportunity for self-improvement before disciplinary action is needed, and you the employer, a means to create documentation to avoid potential legal issues in case of employee separation. Reviews hold employees accountable for their responsibilities because they expect to furnish reports regularly. Periodic reviews can alert managers of issues in a timely fashion and allow them to tackle obstacles or prepare contingency plans in the event of missed deadlines.
Performance management plays an important role in any successful business model, so let’s take a look at how to build some foundational elements for success.
Performance Planning/Employee-Manager Collaboration
Be sure each employee has a well-written, comprehensive job description and then outline specific goals for the upcoming year. Outlining goals should include input from both employees and managers. It is helpful to discuss how the employee’s goals are related to the overall, organizational goals and how their day-to-day actions align with your strategic business objectives.
Use the SMART method to design goals:
S – Specific
M – Measurable
A – Achievable/Attainable
R – Results-oriented/Realistic/Relevant
T – Time-Bound
Clear verbal and written articulation is critical to understanding expectations. The “what” in a goal is the quality and quantity expected from the employee and the “how” is the demonstrated behavior needed to achieve the goal.
The most challenging part of performance management is the process of how you are actually measuring the performance. Inconsistency with evaluation criteria or processes can lead to mistrust by employees and have a negative effect, especially if a merit raise system is used.
Sitting down with employees once per quarter is ideal, but if that is not possible, try at a minimum of meeting at the 4th and 8th-month mark to be sure there are no surprises during the annual review.
Short Process – Long Term Results
The entire process should take no more than about 30 minutes. In advance of the meeting, have each employee complete a short, self-evaluation including an update on goal progression. Have them include the percentage of the goal complete, along with any supporting statistics to illustrate the progress. If there are areas of concern, be sure to have detailed information. Taking time to be sure you have looked for things that will give you an accurate reflection of the work they are doing, and not evaluating them solely on the fact that the “work is being done”, will help to keep your assessment fair and accurate. Being credible, fair, and contemporaneous in your assessment and knowledge of the work an employee is doing will also foster healthy respect between you.
Avoid being vague during discussions. For effective reviews, you must use examples of both good and poor performance. Be specific when describing what is being done well to maximize their positive recognition. If they are falling short, spell out what improvement would look like as compared to what they are presently doing. At a minimum, include these topics in your discussions:
What the employee is doing well
Areas of concern – things the employee is not doing well
Outline what needs improvement, using details, a timeline, and measurement to show marked improvement
Focus on skills development – identify whether the employee has any individual training needs or requires special support. Ignoring skills deficiencies can stifle the achievement of individual and corporate goals
Discuss how the employee perceives their own strengths and challenges and ask what they need from you
Take notes for action and future reference
Remember, the purpose of providing a forum for open communication is to create a positive effect on overall future performance. Periodic reviews are also an important step in preparing for an annual review.
Navigate is a full-service PEO in Massachusetts and can help with all your outsourced HR services. If you’re looking for ways to increase productivity and profitability for your small business, please feel free to reach out to us to see how we can help.