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Managing Employee Performance

What is employee performance management?

Performance management is the term used to describe the processes and policies employers have in place to maintain and improve the performance of their employees. These arrangements are established to ensure people are working effectively and efficiently.

What does employee performance management involve?

Typically, performance management includes the following: 
  • Managers organising performance meetings with their employees
  • Setting measurable goals and objectives
  • Assessing employee performance against these goals
  • Keeping records of performance to track employee progress 

Performance management takes many forms, but can include setting key performance indicators (KPIs) on organisational, departmental and individual levels. Goal setting in this way can help to ensure that all employees are working towards a common goal and it establishes a level of accountability throughout businesses.

Why is performance management important?

It is crucial that businesses manage performance to guarantee the best outcomes. A lack of performance management can result in underperforming staff members and, ultimately, companies not hitting their targets.

The benefits of managing employee performance

In addition to helping companies meet their targets, managing employee performance can be useful for:

  • Recognising high-performing employees
  • Reviewing which employees are contributing to the success of the business and which are not
  • Ensuring tasks and projects are completed in promptly and to a good standard

Learn more about managing employee performance

What are the benefits of managing performance for employees?

As well as benefiting a business in reaching its goals and objectives, performance management can help employees too, because it…

  • Can be motivational 
  • Encourages employees to develop their skills
  • Discourages complacency and improves engagement

Contact us for help with managing employee performance

How to manage employee performance

There is not a ‘one size fits all’ approach to managing employee performance, especially when you’re managing the performance of individuals. There are, however, several things you should do…

  • Engage with staff members and their representatives - Staff members are a valuable resource when it comes to developing performance management frameworks as they will already have a good idea about issues that exist and how to improve them.  Involving your colleagues in the development process can benefit engagement too - people are more likely to be receptive to change if they have helped initiate it. 
Another factor to consider is trade union representatives, where necessary, you should organise meetings to explain how employee performance management will work. This will ensure compliance and that objectives are fair.   
  • Involve senior managers - For any performance management system to be effective and successful, stakeholders at all levels must be enthusiastic and engage with the process. - Getting senior management on board may be difficult because employee performance management processes can eat into working time. With this being said, utilising the experience and insight of senior management and the long-term benefit of effective performance management are all important in ensuring an organisation’s success. 
  Encouraging senior leaders’ involvement could have a knock-on effect for the people in their teams too.   
  • Work with managers  - Managers are crucial to the success of employee performance management as they are likely to be implementing the strategies to individual employees. Managers normally have day-to-day contact with their teams - making them best placed to motivate and encourage people.
  • Think about your organisation - When we say think about your organisation, this includes the challenges the company faces, its overarching goals and how other factors, like the size of the business, can impact the employee performance management arrangements that can be implemented.  Medium or smaller businesses find that informal arrangements that promote face-to-face communication may be easier and more effective. Larger organisations, on the other hand, may find it easier to disseminate responsibilities to heads of departments and look to ensure consistency in how they manage performance.
  • Outline the aims of performance management - Although ensuring a business continues to grow and move in the right direction is typically the aim of performance management, there are other objectives to consider as well, such as: celebrating and rewarding employee performance, supporting and improving staff performance, identifying areas for training and development and remedying issues with processes.
When developing your organisation’s performance management strategy, you should have a mixture of goals that contribute to the success of your business and the development of your employees

Management styles can differ and your managers may require training on how to effectively deliver your performance management strategy. 

Similarly, additional resources may need to be allocated to ensure managers have adequate time to carry out performance meetings. Depending on the size of the organisation, this could include hiring more managers to reduce the size of your teams.

What are the effects of different management styles on employee performance?

As mentioned, it is important that you work with managers to ensure employee performance management processes run smoothly and effectively.

Typical styles of leadership behaviour

One common barrier to this is how a person manages their team. A lot of the time, managers will just do what feels right to them as opposed to trying to fit into a specific style of management.

There are, however, three typical styles of leadership behaviour, these are…   
  • Autocratic - a top-down approach where decisions are made by the manager with little or no input from their team
  • Democratic - a collaborative effort in which decisions are discussed between the manager’s team and the best course of action is agreed upon 
  • Laissez-faire - a hands-off approach that sees the manager provide their team with the resources they need without being too involved in the work itself. 

There are some positives and negatives to each of these styles. For example, autocratic leadership may be efficient and ensure consistency; however, it can stifle creativity and diversity in thought. 

By contrast, democratic leadership can encourage creativity and the generation of new ideas, but may lead to a lack of focus and direction – leading employees to stray from working towards the goals of the organisation. 

Finally, laissez-faire leadership often empowers team members to think and act independently, but leaders can appear distant and employee productivity may be hampered by a lack of scrutiny. 

With this in mind, it is important for managers to evaluate their performance as well as their teams’. Including managers in planning the framework for managing employee performance will help them to feel empowered to carry out their new responsibilities.

Performance management examples for employees

Each company will review employee performance differently. Some businesses may take a less formal approach, while others may require employees to document their goals and evaluate their performance more closely.

Personal development plan (PDP)

Employee performance is tracked via a PDP, these usually outline a set of objectives to be completed in a specific timeframe. Before compiling goals, employees usually complete a SWOT analysis to identify the following:   
  • Strengths - what the employee is doing well
  • Weaknesses - areas for development
  • Opportunities - what you could achieve, e.g. becoming a specialist in a certain field
  • Threats - what hurdles may stand in the way of the employee achieving their goals 
By completing a SWOT analysis, an employee is forced to evaluate:   
  • The things that could help or hinder them in achieving their goals
  • Their existing skills and knowledge
  • Whether their skills are transferable 
  Once the SWOT analysis has been completed, employees can evaluate areas for improvement and use this information to inform their PDP. PDPs should have deadlines and be reviewed regularly to keep track of progress. 

SMART goals

Another common performance management example for employees to follow is SMART goals. SMART is an acronym, which stands for:   
  • Specific  - goals are fixed and clear
  • Measurable - goals that can be measured and tracked
  • Achievable - goals are attainable while remaining challenging 
  • Relevant - goals will help to move the employee and the organisation forwards
  • Time-bound - goals have deadlines

Utilising the SMART method

Utilising the SMART method allows employees to set realistic, measurable objectives that are of genuine benefit to their organisation. 

Implementing employee performance management systems can be difficult, especially if your organisation isn’t doing it already. The size and complexity of the task can be daunting, although ultimately rewarding. 

To ensure all stakeholders are on board from the outset, you should put an agile framework in place that is clear for all parties. For guidance and assistance in doing this, Lamont Jones can help. We provide step-by-step support to ensure everybody is working effectively and efficiently toward the identified goals.