Performance
The performance of your employees is crucial to the overall performance of your business. Effective performance management is key for long-term health and productivity of any professional team. Achieving this requires a deep understanding of the workforce, the organisation's definition of success, and each employee's career path. There are many pieces of the puzzle to identify when assessing performance, including:
Company performance
Revenue by employee
Overall employee performance
Goal tracking
Succession planning and employee progression
When you’re tracking company performance, compare how well employees are performing against how engaged and valued they feel. Engaged employees are more productive, better collaborators, and likely to stay with the company for longer, so prioritising engagement is non-negotiable to achieve high performance.
Performance reviews are most effective when the process is informed by a shared understanding of what the organisation is trying to achieve as set out in their business plan. Employers should be able to evidence a clear link between their business plan and employee objectives. Employers should think carefully about what is required from particular functions, departments, teams, managers, and individuals. Essentially, individual objectives should support manager objectives, which should support department objectives and so on.
Performance management strategies are no secret to HR professionals. However, despite being around for many years now – they still need to be adjusted and improved on a regular basis.
Data from our recent HR trends survey showed that formal performance management procedures are absent in many businesses. Although the majority of businesses do have a formal procedure in place, we were shocked to find that almost 20% of businesses don’t have a process set up. And what’s more, 60% of businesses with a procedure in place don’t really think it’s effective!
Having an effective framework is vital to business success and employee productivity. It highlights any training gaps, boosts employee morale and retention, helps identify the right employees for promotion, improves workforce planning, and gives employees more autonomy to manage their responsibilities.
60% of businesses with a procedure in place don’t really think it’s effective!
One of the first key performance management techniques to put in place if you haven’t already are performance appraisals. Employees must feel the appraisal is a regular, fair, honest and constructive two-way conversation between them and their manager. If they are not, then appraisals can become a tick-box exercise and end up as a de-motivator which can lead to a decline in employee performance.
Key Performance Indicators (KPIs) can be set to measure how well projects, teams or individuals are performing in relation to their strategic goals and objectives. The main value is enabling data-driven performance conversations and better decision-making.
Well-designed KPIs should be vital tools providing a clear picture of current levels of performance and show if individuals or the collective are where they need to be. Interestingly, our recent HR trends survey shows that 31% of businesses don’t link performance to pay, so maybe monetary incentives should be introduced if you haven’t tried it already.
Competency matrixes are another useful tool to introduce to your performance management strategy. Similar to Balanced Scorecards, these take a holistic view of the organisation to attach a score rating to the competency of the different skills which are required for success in each role. Employees can be scored based on their performance against metrics to identify areas for improvement.
Management by objectives can be utilised to define specific objectives and set out how to achieve each individual objective. It is powerful for specific work that must be done one step at a time. It creates a culture of working towards common goals as once each objective is achieved, those involved are aware of their achievements – which helps to improve morale and motivation. MBO measures individual performance and compares that performance to standards previously set.
Other techniques to consider implementing are personal development plans and 360 feedback. Set out goals for future performance and actions that will support personal development, identifying specific training and development needs and creating action plans to meet those needs.
Employees can set out how they want to grow and what actions they need to take to achieve that growth. This helps them to feel more invested in the business and know the role they play in the success of the business.
Allow peers to provide both positive and constructive feedback through the 360-degree feedback method. It provides individuals with a broad assessment of their individual performance based on the views of the people around them. Team members grow as they identify areas for improvement in others, while they consider their own development needs.
If employees feel like performance reviews are a tick box exercise, they lose their purpose. Equally, if you can’t report on the success of your performance across employees, then what’s the point? If you’re considering HR software for performance, these are the benefits of those reports.
Monitor performance reviews (held/scheduled/complete)
Track churn rates
Record of internal promotions/salary increases across certain time periods
Set automated reminders/check-ins
Gather 360 feedback
Report and view goal completion
Carefully plot succession plans
Report on team skills matrix
See skills in one spot: nine-box grid
Drive employee participation via a company portal/intranet
Drive development: Careers page
Get more from your performance management right here.
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