Here’s a common situation growing organizations face: managers realize it’s time to revamp their performance management processes, but they’re not sure where to start. Or, maybe the CEO knows that in order to see better results, they need to implement a more effective performance management system. Whatever the case, there are often many questions about the perfect blueprint: Is real-time feedback really the way to go? How can you link employee performance to your company strategy? Should you use Objectives and Key Results (OKRs) as your goal-setting method?
The more time you spend debating these questions, the more time performance will remain unchanged. Thus, the first step is simply getting started. Details can be addressed thereafter.
Start With These 4 Key Areas
Each company has its own nuances, so the performance management system that works for you will ultimately look different from the rest. However, there are a few best practices that work for the majority of organizations. Specifically, start by addressing these four key areas:
- Hold performance reviews more frequently than once per year. Twice per year, or even quarterly, is more effective than annual reviews because performance will be fresher in your mind (and your employees’).
- Align all teams around a unified review cycle instead of staggering reviews by each employee’s start date.
- Implement 360 reviews for a holistic overview of performance. Gather feedback on employee performance from their peers, managers, direct reports. Also, have employees give their own self-assessment.
- Use straightforward questions, and always keep them focused on performance and behaviors (not the individual). Limit reviews to 3-5 questions.
- Train managers to discuss feedback with their teams to ensure development plans are being made and followed through on.
- Tie performance reviews to compensation, but be sure employees know exactly what’s expected of them and how their performance is being evaluated. You must have a quantitative system on which performance is judged.
- Have managers hold brief one-on-one meetings with each of their direct reports every week – no exceptions. These meetings were voted the best management practice of all time.
- Encourage employees to ask questions during these meetings and discuss any obstacles that may impact the progress of their objectives.
- Encourage managers to get updates on goal progress, reinforce expectations, and give praise for weekly accomplishments.
- Have managers write down any important exchanges or updates on performance to be referred back to when it’s time for reviews.
Continuous, Real-Time Feedback
- Provide a type of performance management software through which employees can see into each other’s progress and give and receive feedback from managers and colleagues.
- Consider making praise public, but also having a method through which feedback can be shared anonymously to encourage honest responses.
- As performance reviews approach, have managers review this feedback to prevent performance management biases, such as the recency bias, from skewing appraisals.
- Set company goals at the beginning of each quarter, and make them visible to everyone in the organization.
- Have departments, teams, and employees set objectives that align with the company goals you’ve established at the beginning of each quarter.
- Don’t attempt to force goals that won’t cascade perfectly. Goal setting is most importantly, about prioritizing and clarifying expectations. It’s NOT about managing tasks.
- Have managers frequently discuss performance and progress on goals with their teams, both during weekly one-on-ones and through ongoing feedback exchanged through your performance management/weekly pulse report platform.
- At the end of each quarter, review the successes/shortcomings of all objectives to inform your decisions for setting next quarter’s objectives.
Keep in mind that this is simply an overarching framework for ongoing performance management. You should tailor it to fit your organization’s specific needs, strategy, and corporate culture. As you refine the framework to align it with your company, consider the following questions:
- What is your purpose for revamping your performance management framework?
- Are you attempting to create a stronger link between pay and performance?
- Are you identifying top performers (as well as underperformers) so you can make more effective promotion decisions?
- Do you need to address employee engagement levels? If so, how will you measure employee engagement to ensure your new performance management framework is making progress?
- Do your employees need more praise, recognition, and/or clarity of expectations? Are you providing enough feedback? How do you know?
- Are you trying to create a more goals-driven company culture?
Every company is different, so there are no correct responses. Rather, the answers to these questions will reflect your unique priorities. The most important factor to remember is that you must simply begin. You can evolve your performance management system to pair with your company mission, vision, and strategy as you go along. As long as you have a starting point – an ongoing performance management framework in place – you can make adjustments with ease.
What else? Are there any other components of a performance management framework you consider to be a priority?
Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!