Establishing Performance Management Practices to Maximize Your Talent ROI
Small businesses frequently overlook the importance of establishing performance management practices. A new CEO may feel that everyone is too busy or the company is too small to warrant a formal process, but this is a mistake. Having a consistent and objective process for evaluating performance is important for team member engagement and alignment to the organization. It also frequently results in stronger individual and company performance.
You might wonder where to begin. It all starts with setting goals.
Setting Goals:
Setting clear, written objectives for the year is a critical component of the performance evaluation cycle. Clear expectations improve overall performance and employee engagement. Leveraging the “SMART” method when writing goals can make the process easier and result in more effective goals. SMART objectives are:
- Specific: Ensuring objectives have enough detail helps to ensure that you and the employee are on the same page with what is expected of them.
- Measurable (quantitative or qualitative): Ideally objectives should be quantitative. For example, bring in five new prospective customers per month. However, for some roles this is difficult to achieve. In that case, provide qualitative metrics such as the project is delivered on time, with minimal re-work.
- Achievable: It can be very de-motivating to provide objectives that are so aggressive they aren’t achievable. You want to stretch employees, but objectives should be achievable.
- Relevant to role, team, organization: Employees should understand how their role contributes to the team and organization overall and this should be clear through their objectives as well.
- Time bound: The objectives should be for a specific time period and employees should receive feedback at the end of that time period.
When you have clear objectives or goals it is easier to write objective feedback and rate this feedback. An employee should have 3 to 5 clear goals for the year.
Ongoing Feedback
While the next section reviews establishing a regular performance evaluation cycle, it is important to first discuss ongoing feedback. Employees should receive regular, objective feedback. They need to hear what is going well and where they can improve. This can be done during weekly 1x1s and/or after key deliverables.
Performance Evaluation Cycle:
If you are establishing a performance evaluation cycle, consider starting with an annual cycle that is calendar driven rather than anniversary date driven. Holding conversations at the same time makes it easier to share expectations (e.g. self-assessment) with the organization and follow-up to ensure completion. As the process matures, it also allows for manager calibration sessions, in which all employees’ performance can be discussed and ratings calibrated.
Self-Assessment:
An employee conducting a self-assessment is a great practice to have in place. These should be done in advance of the manager evaluation so that the manager has an opportunity to consider the employee’s comments as part of their overall evaluation. The self-assessment form should mirror the overall evaluation form.
Manager Evaluation:
The manager should consider the feedback they have been providing throughout the year, the employee’s self assessment, and any other customer or internal feedback when evaluating the employee’s performance. The manager should provide feedback on each objective before an overall summary or rating.
As you invest in and mature your performance evaluation process, you will see greater performance and engagement from your team!
