The subject of employee performance management reviews can provoke a range of reactions, from annoyance to avoidance, and everything in between. Often staff will imagine having to jump through hoops they see as a waste of time, or having to work through long appraisal forms for no apparent benefit.
Organisations who understand the benefits of well-designed and effective performance management processes will address these issues using innovative solutions – meaning employee performance and business profitability is significantly improved.
This article offers advice and guidance to help you improve the performance management process in your organisation.
Choosing the correct performance management system
Automated performance management systems are designed to take the tedium out of the process and reduce the time it takes. With the advent of new technology, systems based in the cloud are becoming more and more common. They make use of machine learning, chatbot coaching and intelligent analytics to make the process easier and quicker. These advanced systems often require no IT support, have automatic upgrades, and are quick to implement.
As with any system your organisation wants to purchase, doing research beforehand is key. Think what sort of system you really require – they range from basic electronic appraisal forms to top of the range performance and goal management tracking systems. The best include:
- Dashboards which can report on both individual and company-wide progress,
- Help from writing assistants and legal scan wizards to help complete forms,
- Coaching support for managers via a range of tools,
- Automated management of goals and reminders,
- Goal tracking and the ability to cascade them to all who need to see them,
- Instantaneous paperless processes and form routing, easier to manage and better for the environment.
The most important capabilities that this sort of system can offer are the ability to find and analyse performance data, monitor progress against goals, draw conclusions from average manager ratings and base decisions on this data. It’s less time-intensive and expensive when these tasks are done through an automated system.
Steps to improving your performance management process
(1) Start with performance planning
Setting out what good performance looks like is a collaborative process that the employee and their manager should go through annually. Start by reviewing the employee’s job description and broad expectations, gradually getting more specific with each area of duty or responsibility. In doing this, you will set the stage for the year ahead and provide an actionable plan to help the employee achieve their full potential.
Look at each area of the job in question; what short- and long-term goals can you set? What action plan can you create to help the member of staff achieve them? Agree on how you will measure progress against goals. Then identify any barriers or challenges that could stop these goals from being achieved. If further skills or more knowledge is necessary, consider developing a mentoring or training plan.
As time goes by, use this performance plan as a reference document to monitor progress, solve problems, change or enhance goals and constantly evaluate the need for further training or resources. Continual communication is vital throughout the year – open discussion can enable continuous improvement.
(2) Set goals effectively
Keep two questions in mind when developing your goals;
- are the goals written clearly and objectively? And
- are they contributing directly to achieving the business’s strategy?
Usually, the first goals will be set by departmental managers for their own part of the business, based on the overall goals of the organisation. Ensure all managers are able to access these departmental-level goals so overlap or conflict can be avoided and everyone has visibility of them and understands what is required of them. Every manager should then share these goals with the staff in their departments, and meetings should be scheduled to formulate individual performance plans.
Use key job responsibilities as the main reference point for setting goals. They should cover both expectations (the ‘what’ part) and the means of achieving those expectations (the ‘how’ part). For instance, the ‘what’ refers to the amount or nature of what is expected, by when, and at what cost. The ‘how’ should explain what behaviours are needed to achieve these things. It might mean focussing on a particular area such as customer service. You might also consider including competencies within the expectations, as this emphasises the link to the business’s strategy, mission and vision.
It is often helpful to keep the ‘SMART’ framework in mind when writing goals:
- S – specific
- M – measurable
- A – achievable
- R – results-orientated / relevant
- T – time-bound
By following this acronym, you are more likely to end up with understandable goals which staff can easily visualise and track their progress on. If someone knows their goals are unattainable, they are likely to stop trying to reach them. Goals should also be based around things which are within the employee’s control – make sure the Rs (results-orientated, realistic and relevant) reflect this.
Beware of focusing too much on the goal outcomes, at the expense of the steps needed to achieve those outcomes. Include documentation of the necessary steps within the action plan. If goals are kept achievable and relevant, managers can more easily signpost the link to broader strategic objectives.
The process must also be seen to be fair and worthwhile. If outcomes are based on observable, objective behaviours then this will help uptake amongst employees. When feedback is given, whether positive or negative, it should be supported with regular documentation so as to be beyond dispute. Make sure that each individual member of staff understands how they are feeding in to the objectives of the organisation as a whole and how important their efforts are to the wider business. If an individual sees how they are helping the business, it will be easier for them to understand what the impact on everyone will be if goals aren’t met. Provide clarity upfront via the SMART framework so staff know they’ll be evaluated against specific goals.
(3) Implement an ongoing process
Truly effective performance management – and all the planning, monitoring and feedback it entails – should be a continuous and ongoing process throughout the year, not just a one-off event. After all, if feedback is given at the time it is most relevant, learning is enhanced and the opportunity is given to make timely adjustments to behaviour. Try to build mechanisms for constructive feedback into day-to-day interactions – this encourages development, and drives performance improvement focused on meeting goals.
(4) Use goal management to improve productivity
Discussion of goal progress and associated feedback should be objective, supportive and respectful. It should help the employee focus on improvements in the future. But it should be a two-way conversation – managers should always listen to their employees’ perspective and ensure their thoughts and ideas are included in any future plans. Often, the employee will encounter barriers that the manager is not aware of and doesn’t see in their own everyday work.
If goal tracking is done regularly, it enables feedback to be given, adjustments to be made, and contingencies to be prepared for any missed deadlines. If there is no mechanism for this continuous monitoring against objectives, there is a risk that the cyclical nature of the process falls apart, impacting on productivity and effectiveness.
(5) Collect data from multiple sources
Many organisations use a process known as 360° feedback to gather a range of feedback from other staff members, such as peers, subordinates or other managers. This is then combined with the employee’s self-assessment. The 360° feedback process increases self-awareness and can be used to support the performance evaluation process.
It’s important to collect performance data from a good range of sources – it makes the process more objective, and ensures all relevant factors which can impact on someone’s performance are considered. As well as data such as deadline reports, call records and sales figures, other information should also be collected, such as feedback from others, records of external factors impacting on the employee, and documentation of ongoing dialogue. When defining performance objectives, it can also be helpful to use past appraisals and documented standards relating to career goals, alongside the organisation’s current objectives.
Objectivity is crucial when it comes to evaluating staff performance. If the organisation implements consistent processes across all its operations, this will help create an environment of objectivity and fairness. Allowing others to check the validity of the process – within reason, and keeping confidential information secure – helps ensure consistency. Calibration meetings, where mangers in similar situations discuss and share appraisal data, are often beneficial because they educate managers, promote consistency, and can validate manager’s decisions.
Another thing which can help things stay fair and consistent is good reporting. Use it to compare ratings between divisions within a company, or between managers. Technology such as machine learning and people analytics also play their part in removing bias from performance management systems.
(6) Document everything
When it comes to supporting performance decisions, documentation is very important. Note-taking should be consistent and include both positive and negative events and the follow-ups to them, written with the intention to be shared eventually.
This sort of record that is kept by a manger is called a performance log. Maintaining such a diary of events is useful for several reasons. Firstly, it indicates both successes and also areas of performance which need improving – and a written record is more authoritative and easier to use than relying on a manager’s memory. Secondly, it can act as a reminder for the manager, so if gaps exist, they can check back in with their member of staff and fill them in. These reminders could be of a job well done, or a record of the circumstances around areas of deficiency. In addition, a performance log can be used as a coaching reminder, so that managers can ensure their staff are prepared for tasks ahead and can follow up with them once they’ve been completed, to promote improvement.
Ensure that logs are always objective, and based on job-related and easily observable behaviours – including achievements, successes, but also any disciplinary action that may need to be taken.
(7) Train your managers
Managers have to be able to understand human emotions and behaviours – how to motivate someone, help them develop, coach them, deal with any conflicts that may arise, and record all of this in a performance management system. These are not easy skills to acquire, and many managers will need training so they feel prepared to manage and understand their staff correctly, especially if they are new managers. Observing, assessing, motivating and solving problems are just some of the skills a manager must possess, and they must be able to vary these according to the individual’s role, experience, age, personality, etc. Managers who are trained in these skills and well-prepared to use them with their staff will be major contributors to a successful and effective performance management process.
(8) Optimise the performance review
It may be helpful to first define the purpose of the performance review meeting, and make an agenda. Keep things focussed on facts, and job-related behaviours to ensure objectivity is maintained.
Prepare for the meeting well ahead of time, and choose a place where there will be no interruptions. Make sure the employee has the information they need to allow them to prepare for the meeting, too. Keep the focus of the meeting on looking forward. Begin with the strengths and accomplishments of the employee, and remember to keep an open mind throughout the meeting, and treat the meeting seriously. Managers should be prepared to listen as well as to contribute to the meeting.
Provide a summary of key points discussed once the meeting is over, and ensure the employee signs the appraisal, whether they agree with the outcomes or not.
The written appraisal should be a summary of all that has been discussed in the review meeting. It should include key responsibilities that the job brings, current work, relevant competencies, achievements and goals. You can include previous performance appraisal documents as references. Make sure there is time and space for the employee to record their own input and comments, which should always be job-related and based on observable behaviours.
(9) Link performance with rewards
It’s not possible to link performance to compensation adequately without a solid performance management process, which is fair and equitable.
Documenting progress against performance expectations allows recognition to be given for a job well done. Do this through formal recognition events, informal recognition in public, or feedback delivered privately.
Any pay-for-performance process should be consistent, so that it creates a sense of fairness and promotes job satisfaction. It is important that if an employee sees a colleague in one department being rewarded as a top performer, they understand that a similar colleague in another department will also get that reward.
(10) Encourage full participation
Try to make sure the process is simple, efficient and adds value – if not, employees will resist when asked to comply with it, and rates of non-compliance will rise. Use automated reminders to keep the process on track.
Consider also evaluating the process itself from time to time – perhaps you could do an annual survey, hold a focus group meeting, ask managers for feedback, or use a combination of these things to see how people view the process.
If you have the support of upper-level managers, it will be much easier to implement a successful performance review process. Ensure that they take part in the same process for their evaluations. Think about the culture in your organisation; does it create a supportive environment in which to conduct an effective process? Employees should feel comfortable communicating honestly and openly, not be fearful of doing so.