Performance Management for a Healthy Business

Over a lifetime, work occupies more of our attention and energy than anything else we do. So why not make it more enjoyable for your employees? After all, studies have shown, the more an employee enjoys work and respects the people they work for, the more efficiently and effectively they work. One way to do this is to implement a performance management system that responds to employees’ concerns and struggles and fosters an office culture of open communication between employees and their supervisors.

What is a Performance Management System?

A performance management system is a company’s process of tracking how its employees perform. An effective system aligns employees’ day-to-day activities with the company’s strategic goals, provides clarity and accountability toward performance objectives, evaluates performance fairly and consistently, coaches individuals on growth and learning opportunities, and recognizes top performers.

You’re probably thinking—that sounds all well and good, but how do you actually do it? Answer: you implement a work environment with ongoing employee feedback and you conduct regular performance reviews. The frequency and type of performance reviews will depend on the type of business you run. We can help you build and implement a system customized for your company’s management style and employment positions. For instance, we often recommend managers schedule a 30, 60, and 90-day “check-in” for new hires—the most important performance management check-in which many employers overlook. Other performance management components may include monthly check-ins, quarterly 3x3s, annual reviews, and anonymous 360-degree reviews.


Why Implement One?

It Increases Productivity

Setting goals is a major part of the performance management process. During a review, supervisors discuss and document the individual’s goals and how the goals will be measured (we recommend using the SMART criteria for setting goals— goals should be Specific, Measurable, Achievable, Relevant and Time-Bound.) This process produces huge results. By putting the goals on paper and understanding how they will be evaluated, employees can work with a tangible, individualized objective in mind, rather than merely executing their job description. An employee who knows what their employer expects them to produce can work more efficiently and thus increase company productivity.

It Helps Manage Risk

Companies use the performance management process to not only define their expectations, but also to manage risk should they need to exit an employee. Employers create a well-documented paper trail when they implement an effective performance system. As such, companies can fire underperforming employees with peace of mind because with performance review sheets in hand, an employer can show an employee’s termination was the result of performance and not age, race, disability, or some other discriminating factor that could lead employers into a messy wrongful termination lawsuit.

It Builds Better Working Relationships

Companies build better work relationships when they make it a habit to continuously comment on employee performance and work quality. By doing so, employees get used to dialoguing with their supervisors about their work quality and feel more comfortable communicating their concerns or ideas. This fosters interpersonal work relationships, which increases employees’ job satisfaction.


How to Implement One

Embrace technology

With today’s technology, employers can comment on employee work product and track performance via various apps like never before.

Integrate Core Values

Make your company’s vision and values the foundation of your performance management process. For instance, a manager should steer away from making negative feedback personal, and should instead explain to the employee how their current performance misaligns with the company’s core values. Employees should then be encouraged and mentored as to how to improve and perform in a way that reflects the company’s values.

Focus on Employee Growth

Everyone enjoys learning and the opportunity for improvement. An effective performance management system should equip employees with tools to improve their unique skill-sets and progress along their career paths.

As you can see, an effective system is a powerful tool for employers to grow their employees, manage risk, and align company values with employee performance. But the system should also be practical. Aim to design a system that is easy to put into practice—and as mentioned above, embrace technology to make the system more efficient. We provide our clients with a customized toolkit for their business needs, feel free to reach out to us with questions on how to best implement an efficient and effective performance management system.

By: Jenna Macek – 11/02/16

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