The best performance management systems provide employees with a source of continuous growth. Rather than allow their skills to stagnate, performance reviews, feedback, mentoring, and other techniques can help workers grow and develop in their career fields. More importantly, good performance management can ensure the worker’s goals align with your organization’s mission. By learning the best practices for managing team and individual performance in the workplace, you can set your small business up for success.

The Benefits of Performance Management

Once your workplace reaches 16 to 50 employees, it is time to start thinking about your performance management system. At this stage, the founder can no longer have one-on-one training sessions with each employee. You have to create a systematic way to manage your employees’ performance. With the right performance management approach, you can enjoy a few key benefits.

Better Employee Performance: One of the biggest advantages of having a performance management process is the direct impact it has on employee performance. 

Improved Employee Engagement: Employees want to do well. By providing feedback and words of encouragement, you can help employees do their best. In fact, Gallup has found that well-recognized workers were 45% less likely to switch organizations over the preceding two years.

Enhanced Development: By consistently evaluating workers, you can determine the training and development they need to succeed. Besides making your workplace more productive, this development can be one of the benefits you list in job ads.

Higher Morale: High-performers generally prefer being around other high-performers. By encouraging better performance, you can help your low-performers improve and carry a larger share of the workload.

Consistent HR Decisions: With a consistent performance management and feedback process, you can ensure fair promotions and disciplinary actions.

Better Results: When everyone is working at their peak efficiency level, your organization is able to achieve better results. For example, you may produce more products for the same labor cost or enjoy an increase in customer satisfaction.

How Do You Manage Team and Individual Performance?

By adopting the best practices for managing team and individual performance, you can prepare your company for future growth. From developing accurate job descriptions to offering coaching opportunities, there are a number of things you can do to enhance your performance management processes.

Create Accurate Job Descriptions

In a recent Mission to Grow podcast on “HR Roadmap for Growth Series: What are HR Priorities for 16-49 Employees,” Mary Simmons, Asure’s vice president of HR compliance, discussed how Asure typically approaches employee performance improvements. “We usually look at it in two buckets,” Simmons says. “One bucket is: Are we setting the expectations? 

And when the expectations aren’t met, what’s the cause and effect there? In setting expectations, we like to create job descriptions, so the employee knows the responsibilities of their job.”

An accurate job description forms the basis of the employee’s future job duties. It helps them know what objectives they are supposed to achieve. Then, this job description can be shared with their manager, so the manager knows exactly what tasks the employee is expected to perform.

While teams might not have a job description, it’s important to clarify the mission of the team. If they don’t know what their overall objectives and deadlines are, they won’t be able to achieve them. Teams should also have a team leader, so someone can help the team fulfill its deadlines and prioritize tasks.

Build Performance Rubrics off of the Job Description 

Once a job description has been made, you can use it to design your performance rubric for the position. Eventually, this rubric will be used for performance reviews and feedback. It should be shared with the employee, so the employee knows exactly what their obligations are. Similarly, performance requirements should discussed with team members so that the team has clarity about their objectives.

Conduct Weekly Check-ins

Next, managers need to follow up with their employees. When it comes to HR audits, Simmons says, “What are we doing for evaluating and appraising that performance? If we don’t give feedback to our employees, if we don’t tell Heather what a great job she’s doing, Heather might assume she’s not doing a great job and start looking for a job. Conversely, Heather might just be unengaged.”

Evaluating and appraising performance can take many forms. One technique is to use weekly check-ins. Each week, see how employees are doing. For example, they may need extra support or training to reach their goals. If they’re struggling to fulfill their job expectations, the weekly check-in is a chance to discover this issue and provide some redirection. 

Provide Ongoing Constructive Feedback

Managers should be trained on how to provide constructive feedback to individuals and teams. No one should be surprised in their annual performance review by low ratings. Your ongoing feedback gives them a chance to understand what your expectations are. In turn, they will have an opportunity to improve before the annual review occurs. 

Hold Performance Reviews 

Consistent performance reviews are incredibly important for your company’s performance management goals. While most companies do these on a yearly basis, you can do them more frequently if you need to. 

Performance reviews are an effective way to gauge how workers are doing. Each worker should be judged based on the job objectives from their job description. Because performance reviews are often a major part of raise and promotion decisions, it’s important to keep them as objective as possible.

Offer Coaching and Ongoing Development

Whether you have a single individual or an entire team underperforming, the right coaching can help them improve. There are a variety of ways you can help workers develop their skills. Besides one-on-one coaching with a manager, you can offer on-demand classes, tuition reimbursements, mentoring opportunities, and other options. In addition to helping your workers improve, these training methods can also be a part of the benefits you use to attract potential job applicants. 

Use Performance Improvement Plans

In a perfect world, every employee would excel. However, some workers need a little extra help to reach the performance level they should be at. A performance improvement plan (PIP) is a formal document where you outline the changes the worker needs to make to their day-to-day performance requirements. Typically, the PIP will also include potential consequences for not achieving these goals, such as being written up or terminated.

Be Mindful of the Behaviors You Reward 

When it comes to performance, you should be especially careful about which behaviors you reward. Employees will quickly notice which behaviors receive bonuses, verbal recognition, or other perks, and they will replicate those behaviors.

For example, rewarding only sales achievements can have the unintended consequence of disincentivizing customer experience or teamwork. Employees may be pushier in making sales. In some cases, they may even cross ethical boundaries. While rewards are an incredibly effective way to get workers to achieve certain tasks or goals, they must be used wisely.

Train Managers 

As you improve your performance management process, it’s essential to train your managers on compliance rules and how to provide constructive feedback. They should have strong team management skills, so they can support team members and delegate tasks. 

Once small businesses start to grow, it becomes impossible for the founder to manage or train everyone. Because of this, managers will have to play a growing role in performance management.

Weed Out Low Performers

In the Mission to Grow podcast on HR Priorities, Mike Vannoy, Asure’s chief marketing officer, said, “When you’re a 10-person company, there’s not a lot of places to hide. The low performers stand out. Generally, high-performing employees don’t like to work with low-performing employees.” 

Because of this, it’s a good idea to update your hiring, onboarding, and performance management process to weed out the low performers. You don’t want a bunch of low-performing employees to make work life unenjoyable for everyone else. 

Remember the 5 Foundations of Performance Management 

When creating performance management goals and procedures, there are five foundational principles you should keep in mind.

• Goal Setting: By setting clear, detailed goals, you can give your employees a sense of direction. This provides them with something to shoot for and helps them to align their actions with your organization’s overarching goals.
• Feedback: Continuous feedback is an important part of the performance management process because it helps your employees learn where they need to improve.
• Performance Appraisals: Performance appraisals, such as weekly check-ins and annual reviews, are a way to recognize the worker’s accomplishments and give them constructive feedback on improvements they can make.
• Training and Employee Development: Sometimes, employees need additional training and mentoring to reach the next level in their development. By providing the right training, you can bring your low performers up to the appropriate level and help your top performers truly shine.
• Rewards: Recognition and rewards encourage workers to excel. These rewards can come in the form of gift cards, employee-of-the-month rewards, bonuses, or verbal recognition.

Update Your Company’s Performance Management Methods

Before you create a performance management system, start by conducting an HR audit. This is a chance to see which job descriptions, procedures, and handbook policies you need to update. Then, you can use your job description and policies to build performance rubrics. With consistent feedback and training tools, you can help your employees and teams live up to their full potential. 

To learn more about performance management at your organization, reach out to our team of small business HR and payroll experts today.