Performance Management has always been a tricky thing for organisations to get right. Traditional appraisal processes have relied on formal meetings and the completion of long forms which struggle to genuinely capture the contribution an employee makes to their organisation. Done badly, performance management is less a tool to develop people and more a weapon to threaten them with. However, each organisation needs to ensure that it delivers its core objectives. So, some way of evaluating whether an employee is helping you meet those goals is important.
Why manage performance?
Every organisation has objectives, whether they are financial, increasing brand awareness or increasing market share. Whatever they are, they should be linked, in some meaningful way, to as many employees as possible. In smaller organisations, this is easier. There is direct line of sight between each role and the leader and therefore it is easier to cascade objectives. For instance, if my objective is to grow the business to £1million turnover, then the sales director has a clear mandate to successfully attract new business and retain and grow existing clients. But equally, the Finance department have a role in tracking costs and insuring that invoices are paid in a timely manner.
So how do I manage performance?
Firstly, you need to set clear objectives. There is a well known acronym that helps you to define whether each objective is clear and that is SMART.
- Specific. Can you actually define what task needs to be completed to achieve the objective.
- Measurable. Is the target quantifiable. How do you know whether it has been achieved or not?
- Achievable. Can the individual actually deliver this objective?
- Realistic. Given what you know the organisation needs to achieve, can it be delivered?
- Timebound. When does the objective need to be completed by? Can it be split down into discrete parts with separate timelines?
If you follow the above, you’ve got a decent objective.
So you have your objectives, what do you do now? Whatever you do, don’t store them all up to have a fun-filled end of year performance review. If you are a smaller organisation, chances are you sit a few feet away from your team. Speak to them! If you need to correct poor performance, do it respectfully and in confidence, not in the open office. If you want to congratulate them on excellent performance, do the same. Whatever you do, do it as close as possible to the event as possible; do not delay to a ‘scheduled’ review meeting.
More and more organisations are moving to regular check-in discussions with their team members than a very formal, structured twice a year review meeting. Find what works best for you and your workplace.
End of year review
The end of year review really should be a straightforward meeting, with no surprises. If you are talking to your employee for the first time about something that happened 6 months ago, you aren’t managing performance, you are managing history. These discussions don’t help and can start to unsettle people and breed resentment.
Linking to pay and bonus
Linking performance to pay and bonus isn’t a bad thing, as long as it is applied fairly and consistently. To do this, you need to be clear up front about what you are giving to people and why. And remember, in low salary years, 0.5% extra for top performance might not help, chances are it will demotivate. Therefore use it, but with caution.
Where do I go for help?
Cornerstone Resources have experienced HR Consultants who can help you design an effective performance management system that’s the right fit for your workplace.