Performance management is in the growth and success of fast growing companies. Don’t believe me? Well, mark my words; neglect it and you will regret it. Contemporary performance management is so much more than performance reviews. Performance management is all about making sure your employees are happy, engaged and working towards your collective company goals. If your company is on the cusp of a period of vast growth, performance management needs to be at the forefront of your mind-set and high up your list of priorities. Here are 5 reasons why performance management needs to be at the top of your priorities list.
1. Set goals: Explain to your team what excellent performance is.
Most employees will endeavour to do their very best in their work, however some employees need more encouragement and motivation. Therefore, role competencies and expectations need to be clearly delineated. If employees know what is expected of them, and what it is that constitutes excellent performance, then it becomes easier for managers and their reports to be on the same page. This does not happen by accident though, there must be a clear and concerted effort by management to articulate the company’s strategic direction and objectives.
To ensure that employees remain in tune with company objectives, strategic individual goals should be developed for each employee. SMART goals are perhaps the easiest method by which to introduce attainable and achievable benchmarks that can lead to the development and success. of each employee. SMART goals should conform to the following criteria: Specific, Measurable, Assignable, Relevant, and Timely. They should both provide you with a clear purpose and lead to successful goal completion that feels straightforward and stress-free. Research indicates that employees are most highly motivated when there is a 50% chance of achieving a goal.
2. Develop accountable people: Engage your employees.
While the aforementioned goal setting step is very important, it is not enough in order to ensure your employees are happy, motivated and engaged. It is important for every company to understand their employee’s mind-set and level of engagement. Employee engagement can be measured in a number of ways; monthly or quarterly engagement surveys are a convenient and easy way to record engagement and happiness within the company. Everyone knows happy people do more, and better work. But here’s the proof: A recent study by economists at the University of Warwick found that happiness resulted in a 12% increase in productivity, while unhappy workers proved 10% less productive. The research team admonished; “We find that human happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings”. Google too provided evidence in support of the research with their efforts to boost employee support resulting in a 37% spike in employee satisfaction, and Google’s $ productivity per employee rates are through the roof with the average Google employee generating $1.2 million in revenue each year.
3. Managers who lead: Develop leadership and coaching skills.
Why have managers at all? Why not just have a horizontal organisational structure? I’ll tell you why; managers who lead, coach and encourage their teams get more out of their teams. Every company should take time to develop their managers. A good manager will hold regular coaching and mentoring sessions with the members of their team in order to impart useful skills to their employees. Google took the importance of managers to a whole new level; as part of their thirst for data by which the large majority of human process decisions are made based on the back of irrefutable data. Google launched ‘Project Oxygen’ in order to assess how its managers were doing, and to suggest future training and coaching when inadequacies were uncovered by the performance management process. Google came to the realisation that if managers are effective they do not need to build a lot of training infrastructure; as their managers, would do it for them.
4. Organisational transparency: Encourage performance improvement.
The goal of performance management should be to boost productivity and engagement within a company. Everything about the performance management procedure should then reflect this goal. Thus, the organisation should be as transparent about its processes as possible. Nobody wants a ‘bureaucratic nightmare’. The performance management should be simple, straightforward, and should add value to each party involved in the performance management process. If your performance management is sub-par; it just becomes an inefficient and expensive exercise in time wasting. If your current performance management system is not working how you would like it to, why not read up on the different methods of performance management, one of which will work for you.
5. Give credit where it’s due: Incentivise accomplishment.
“You must give credit where credit is due”: sure, it’s an old saying; but it has particular resonance within the world of work today. “The number-one reason most Americans leave their jobs is that they don’t feel appreciated. In fact, 65% of people surveyed said they got no recognition for good work last year”. This lack of recognition is hardly surprising as research indicates that only 14% of employers provide managers with the necessary tools to provide adequate recognition and guidance. This point in itself is noteworthy as the high degree of employee mobility indicates that there is no direct relationship between achievement and financial compensation. Therefore, while financial compensation is certainly an important factor in any benefits package, employee recognition has proven time and time again to be a much better predictor of engagement and employee retention.
The five previous factors have proven the importance of effective performance management for fast growing companies. Performance management can help employees to align their goals with strategic planning and objectives of their company. It can also track levels of employee engagement and happiness and in doing so uncover the need for additional coaching and mentorship. It encourages improvements in performance and provides the incentives necessary to maintain high levels of performance.