A recent Willis Tower Watson (WTW) survey found that only around, “one in four North American employers (26%) reported being effective at both managing and paying for performance.” That same survey noted that companies with effective performance management strategies outperform their industry peers by 1.5x financially and 1.25x in employee productivity. Performance management investments pay off. So what kind does your business need?
Performance management is on every leader’s mind, especially in a constrained economic environment where every ounce of productivity counts. But, unfortunately, it seems that very few businesses effectively manage employee performance. So, where are they going wrong?
Well, for starters, the aforementioned WTW survey also found that only 49% of respondents believed managers effectively assess performance. Naturally, that ties cleanly into the results of a recent study by Gartner, which indicated that only 32% of employees believe they’re paid fairly. Often, that boils down to a lack of trust.
So how can we turn this around? We all want productive employees, and employees want to feel their work is valued correctly. In this blog, we’ll present employee performance management tips to help your business maximize its investment in talent.
Communicate clear, actionable goals and expectations
Another finding from WTW’s survey noted that only 17% of employers improved their employees’ understanding of how they measured performance in 2022. Managing performance without clarity around goals, expectations, and measurement will prove to be a fruitless effort. It all starts with effective communication. Collaborate with your team to develop OKRs and KPIs that align with company and personal goals.
If your managers struggle with this part of the process, offer training opportunities to improve their communication skills. Evaluating performance is a skill; some managers may need help honing it. You don’t want employees walking into a performance review with a completely different idea of their performance than their manager. That can fall on the employee, but often it’s the result of poorly communicated expectations for their role.
For performance management to improve, you need to level the playing field. Make sure everyone works off of a shared understanding of their goals, how they contribute to the company’s success, and how they can grow in their role.
A piece of feedback a day keeps the burnout away
Providing continuous feedback is the foundation of a truly effective performance management process. Employers who share regular feedback with their employees experience 14.9% lower turnover rates. Additionally, employees who don’t get enough feedback and support from their managers are two times as likely to be disengaged at work.
When leaders review performance regularly and coach employees through weaknesses, employees are less likely to burn out or leave the organization. These conversations should be transparent and empathetic. Remember you’re working with a person, not a robot, so welcome conversations about their workload and well-being too. Regular feedback and honest discussions create development-friendly workplaces.
Recognize and reward outstanding work
A Great Place to Work survey found that 37% of respondents would be more motivated at work if they felt recognized by leadership. Your employees shouldn’t need to scratch and claw for the occasional “kudos.” If your performance management strategy doesn’t include employee recognition and rewards, you’re missing a fundamental piece of the puzzle.
It can be as straightforward as sending a congratulatory Slack or email acknowledging an accomplishment or ongoing excellence. However, we encourage you to get creative and find out what your employees respond to best. Maybe a personal message does the job, but you might find a gift card or sports tickets do it better. These bits of recognition are part of the everyday fare you pay to keep your employees happy and productive.
Conduct 360-performance reviews
The 360-performance review is now an established stalwart of the performance management process. They allow employees to review their performance and that of select peers and their managers. Of course, anonymity plays a part in the success of 360 reviews. But their benefits are clear. Namely, they paint a fuller picture of everyone’s impact and how their work is perceived.
Sometimes, this reveals more about weaknesses than strengths, so tread carefully. Once the review is complete, it’s up to the managers to curate all of the feedback productively. Highlight strengths in the actual performance review conversation, and instead of flatly presenting a weakness, share ideas to improve in those areas.
Re-evaluate goals as needed
As the quarter progresses, the goals you set early on may no longer apply. Priorities shift, and projects emerge or fade out. So bake flexibility into your performance management strategy. Of course, if every goal changes over a quarter, you’ll want to reflect on how you set them in the first place.
However, leave space for adjustments over time because these things happen. Your employee may discover a positive route to evolve their role beyond the goals you set, and allowing those opportunities can invigorate your team.
What about PIPs (Performance Improvement Plans)?
Performance improvement plans sound like a natural piece of a performance management strategy, and they do make sense in certain situations. But often, a PIP sets a gravely negative tone for that employee, and they don’t always consider factors such as poor communication from management, inadequate training, and other pieces outside their control.
While the sentiment is logical, the execution isn’t always practical. Sticking low performers into a PIP carries the weight of a warning. Figure it out, or else… But odds are, that worker already knows their performance isn’t up to snuff. Before resorting to a PIP, start from a place of learning. How can we support you better? Do you feel like aspects of your role are unclear? Are you feeling burnt out? Approach with empathy and provide genuine feedback and assistance. If you use a PIP, make it a last resort. Ideally, your performance management strategies will keep employees out of that range, to begin with.
ADDA knows performance management
Performance management is our bread and butter. Helping employees reach their full potential brings out the best in your organization too. With ADDA’s people expertise, your team can produce more effective results and enjoy a workplace built on uplifting each other along the way. Schedule a call with us today to learn how we can improve your performance management processes.