What is employee performance management?
When done correctly, employee performance management is one of the most useful tools in an employer’s kit. Employee performance reviews help businesses monitor performance goals and keep employees happy at work, nurturing career progression for the benefit of both parties.
Performance reviews are seen by many employers as time-consuming and inaccurate, but when carried out well, they provide a tangible benefit to the motivation of staff and performance output.
Performance management, in short, is ensuring your employees are happy, motivated and continue to perform as expected in their roles through routine reviews.
Failure to check in on your employees – or checking in without addressing any of their actual issues – can have an adverse effect on your team’s performance, so it’s vital that you get your performance reviews right.
Who should manage performance reviews?
Typically, performance reviews should be conducted by an employee’s designated line manager, department leader or a senior company leader. It is important to allocate this role to someone with an intimate understanding of the responsibilities and expectations of the employee, as well as their role within the business.
The person appointed should also be expected to routinely conduct these reviews, on either a monthly, fortnightly or weekly basis. This helps to build a positive relationship between the employee and the person conducting the performance review, ensuring trust is kept.
A trusting environment means the employee is more likely to admit difficulties or frustrations in their role – meaning the outcome of the review will be more accurate and therefore more beneficial to both parties.
How to conduct a performance review
Performance reviews can be conducted either weekly, fortnightly, monthly or annually – the key is for them to remain consistent so that performance can be accurately tracked. The more frequent the review, the more trusting both parties will be of each other. This will also improve the outcome of the reviews.
After allocating a knowledgeable member of staff to conduct the performance reviews, it’s important to set clear goals and objectives for the review. To do this, the reviewer must have a deep understanding of the employee’s job role, as well as be an approachable and trusting member of staff.
Questions for the employee should be pre-planned, with an opportunity for the employee to give input, suggestions and express possible concerns regarding work. This feedback must be taken seriously and noted in full so that actionable changes can be made to improve the working relationship.
A good starting point is to address an employee’s past performance, helping to define future goals together which can be readdressed at the next review for further improvements. If there are negative elements to the employee’s performance, it is important to discuss the positives of their performance also.
Performance reviews can be a motivational tool when carried out well, so be sure to encourage positive performance rather than discourage by doubling down on the negatives.
When a performance review concludes, be sure the employee has a set time for when they can expect their next review and what their goals are for the future. This will help with achieving set goals and make your employees feel considered.
Defining and measuring performance
Performance will be measured differently depending on the job role being evaluated, but generally performance follows three key metrics:
Quality of work
If the work produced is of a good standard and fulfils the responsibilities of the job role, this should be the main indicator of an employee’s performance.
Efficiency
Evaluating how efficiently an employee completes their work is another useful metric to keep an eye on. This could give insight into issues surrounding confidence or a lack of motivation – indicating how time management could be better improved at work.
Consistency
Consistency relates to the attitude of an employee at work – if they are punctual, display core company values and show a positive attitude towards work and their colleagues. Maintaining consistency can be a challenge, so employees should be rewarded for keeping their standards high.
Objective setting
Setting objectives for your employees should be a collaborative process, bettering their work life and the business’ output. It’s crucial that the performance review leader reaches out to set these objectives with the employee so that they are understood, reasonable and completed before the next performance review.
A good objective is one which is manageable, measurable, specific and achievable – unrealistic goals may demotivate entirely and cause unnecessary stress.
Performance-related pay
Performance-related pay is an additional pay scheme that rewards employees for exceeding expectations. This pay entitlement is linked to individual or team-based output, motivating employees to push to achieve their goals set in performance reviews.
This can be a great way of ensuring your employees keep on track to hit targets, motivating them through stressful work periods.
Principles of good performance management
Good performance management can be boiled down to key principles which should be followed in every performance review.
• clear goals – goals should be manageable, achievable and specific
• regular feedback – feedback should not end when the review is concluded, team leaders should be checking in to make sure the employee is happy and on track
• reward – positive performance should be recognised and rewarded
• address issues – issues should be addressed swiftly with a clear plan of action to prevent them returning
• provide opportunity – performance reviews should recognise areas of continued or new developments for an employee’s career.
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