Angeline Long highlights why companies need to performance manage their people from the start!
Performance management is an issue that is not going away, in fact it is more important than ever. Finding and retaining good people is imperative in this highly competitive market. The cost of recruiting, managing and training staff is very costly and even more costly if they up and leave.
In a market where 90% of businesses are SME’s we have an issue with management working in the business rather than on it. They are time poor and therefore leave performance management till there is an issue. Their over achievers go unrewarded and their non-performers unchecked. The majority of these SME’s have grown organically and employee numbers have increased. They suddenly realise that they need to put some processes and procedures in place to ensure they achieve their required goals and manage their growing staff numbers appropriately.
So how are companies currently appraising their employees? Most of the employers that we speak to either chat to their people on the fly, don’t have any formal performance management process or complete a form manually that is placed on a file and doesn’t see the light of day till the following year.
So what can we do about it?
First of all a good induction process needs to be in place. All new employees need to have a rough idea how they will be spending their first couple of weeks and what is expected of them. A number of employees move on from their position as a result of a bad induction or no induction at all.
Once the induction is completed a meeting should be held with the new employee to ensure they are fully aware of the specific goals or key performance indicators (KPI) they will be measured on. KPIs reflect how the employee’s day-to-day actions are aligned to the strategic business goals. If there is no direct link between the individual’s performance and the company’s strategic objectives this can result in a waste of time and resources.
How can an organisation be successful if their people are flying blind unaware of how their particular role assists in the organisations overall performance?
Employees also need to feel they work within a culture where open communication is encouraged and this will then provide the platform for improvements in both individual and company results.
Performance management is crucial to an organisation. It should be part of an ongoing process where regular weekly/fortnightly and quarterly catch-ups are essential to ensure employees are on track to achieving their goals or KPI’s, and any potential issues or misconceptions are identified and resolved. Some smaller companies feel it’s not necessary to have individual performance meetings as they see each other all the time. What they fail to realise is that seldom will employees discuss any issues in an open plan office or on the fly. Often they want a more private and confidential place to discuss concerns, issues or workload.
All meetings should be documented as this creates a paper trail for comparing the performance of branches, departments and individuals over time and against company objectives. It also provides documentation for support should there be any future legal disputes.
None of these steps will categorically prevent a disgruntled employee from taking a Personal Grievance should the relationship come to an end. It will, however, strengthen the company’s position if they have a clearly documented process for recruiting, inducting, managing and developing their employees. The Employment Relations Authority want to see a fair and reasonable process has been followed and the more documentation to support this, the better.
The one point that we always highlight for clients is that it is so important to put the time in to manage your employees appropriately from the beginning as it will cost you less time and money at the end.
Armed with this information you don’t have to run for cover the next time you hear the words “employee appraisal”.
Take a look at the following checklist and see where your business could improve their performance management process.
Performance Management Checklist
- Do you have a robust recruitment and selection process?
- Do you have a robust induction process?
- Do you have clear strategic goals for the organisation that have been communicated to all employees?
- Do you have specific and measurable goals or KPI’s for employees?
- Are you both in agreement they are realistic and appropriate?
- Do you have regular one on one catch up meetings with each of your staff?
- Are these meetings documented?
- Do you know who your high achievers are and your poor performers?
- Have you lost staff recently you would like to have kept?
- Have you had a personal grievance that could have been avoided?
- Do you have adequately trained managers on how to performance manage their teams and how to identify measurable KPIs for all of their direct reports.
Many companies are addressing performance management with the introduction of innovative cloud based solutions to ensure processes deliver real results and improve performance. If you think a cloud based appraisal system may assist you in your business take a look at www.ureview.co.nz. The ease of using an online system may mean employees are happier to complete their appraisals rather than see this as a negative and non-productive exercise.
Angeline Long is Managing Director of Auckland based HR Executive Solutions. If you could like to get in touch, email Angeline on firstname.lastname@example.org.