Managing employee performance is vital in an organization. It brings many benefits both to individual employees and the organization. By conducting regular employee performance evaluations, it enables employees to stay laser-focused on their goals and vision.
Learning how to manage the performance of employees only takes consistent feedback, one-on-one sessions, rewards, learning opportunities, and more. Here’s a complete guide on how to manage your employee’s performance.
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What is Performance Management?
Before learning how to manage the performance of employees, it’s imperative to know what performance management is.Â
Performance management is an organization’s strategy to evaluate employees based on their achievements for an entire year. While performance management may be directly correspondent to salary, bonuses, or promotions, it’s an essential step to increasing employee engagement and productivity.
Employees can churn in work daily. However, without supervisors monitoring their performance, they’ll never know if they’re hitting their targets or not. Moreover, employees want to know if they’re hitting their goals because this can open up doors for new opportunities.Â
In every performance management, certain appraisal criteria need to be checked. And this can differ from one employee rank to another. For instance, a senior operations manager may have a different set of criteria than a marketing manager. Also, different organizations may have varied appraisal criteria. Below is a list of some standard employee performance criteria.
Employee Performance Criteria:
- Leadership
- Communication
- Policy Compliance/Development
- Equal Opportunity and Diversity
- Customer Service
- Job Knowledge
- Productivity
- Integrity
- Teamwork
- Engagement
- Innovation
- Professionalism
Certain factors also impact your employees’ performance. These are some of them:
- Employee satisfaction
- Employee engagement
- Company culture
- Company values
- Rewards and recognitions
- Regular training opportunities
- Familiarity with company goals and objectives
- Employee understanding of the products or services
- Work allocation
- Work support system
How to Manage Performance of Employees: Benefits of Performance Management
Before we delve into the steps on how to manage the performance of employees, let’s tackle the benefits it brings to both the employees and the organization.
Benefits for Employees:
1. Increases employee satisfaction
When you conduct regular performance evaluations and provide regular feedback, you’re letting employees know of areas they need to improve. This can motivate them to work harder and better to reach their goals. Moreover, superiors should also prioritize providing timely rewards and recognitions for small and big achievements. This way, employees feel more valued and stay committed to their roles and responsibilities. Overall, this increases employee satisfaction because you’re taking the time to help them grow and steer their career in the right direction.
2. Boosts work efficiency
Connecting with employees regularly for annual evaluations can open up concerns or any roadblocks that hinder their progress. Therefore, it’s best to encourage employees during these one-on-one sessions to speak up. When you’re having an exchange of feedback, this increases trust within your employees. Plus, the effect can lead to better and increased work efficiency due to open and honest communication.
3. Prevents rising issues and conflicts
Another reason you must hold regular performance evaluations is to assess employee strengths and weaknesses. However, this meeting opportunity will give employees something to look forward to addressing their issues within the organization. That’s why open and honest communication is vital. This will prevent any rising and unaddressed issues that may lead to conflicts between employees and the management.
4. Aligns with company goals and objectives
At the onset of onboarding, the management sets goals and objectives with employees. They also relay all employees’ expectations, so employees know what to do. On the other hand, employees must know the organizational goals and objectives by heart. This way, they’ll always work towards the same company goals and objectives and align them with their own.
5. Provides growth and promotion opportunities
Most employees would always strive to be a step ahead of their careers. And regular performance management tells them where they are and what they need to do to aim higher. During these meetings, the management can assess employee performance and eligibility for training programs or new roles and responsibilities. This will also be a chance to point out the employees’ weaknesses, which will enable employees to work on them.
Benefits for the Organization:
1. Improves recruitment systems
Recruiting incompetent employees will contribute to more expenditures due to hiring replacements repeatedly. That said, regular evaluation of employees’ skills and performance enables the recruitment team to determine which skills increase the company’s bottom line. This allows the organization to improve its recruiting methods to filter out a few bad apples.
2. Increases overall productivity
Learning how to manage the performance of employees should entail consistent efforts from both the management and its members. This means every employee should be considered for performance evaluation. When you communicate and identify employees’ concerns, you make them feel valued. In turn, this keeps them motivated to perform better and impacts overall productivity within the organization.
3. Reduces turnover and attrition rates
It can be pretty tedious having to hire and replace employees who leave the company consistently. And having high attrition rates could be accounted to employee unhappiness, disagreement with company culture, work dissatisfaction, disengagement, and more. Of course, you want to ensure that your employees are happy and satisfied. That said, helping them advance in their careers is one of the goals of performance management that encourages employees to stay.
4. Ensures project fruition
Scheduling regular meetings with team members ensures that current projects are directed to the right path. This enables both the management and team members to determine where they are in their project completion. You’ll both be able to identify the employee’s competencies, skills, qualifications, contributions, or current project progress. Overall, this ensures a successful project in the end.
5. Opens doors for succession planning
Succession planning is an organization’s strategy in passing on leadership roles to qualified employees. And this is one of the reasons why regular performance evaluation is a must. You want to identify top-performing candidates that could be next for succession planning. This way, you don’t have to hire new applicants that can cost your company more recruitment expenses. Instead, promoting someone internally to fill a position is better in terms of costs, convenience, and efficacy.
How to Manage Performance of Employees:
7 Simple Steps
Try these 7 simple steps on how to manage the performance of employees:
1. Set goals
Goal setting is essential when onboarding employees, and you must continuously set goals for the duration of employment. Goals change as months or years pass, so you as the management must maintain a target with your employees to reach these goals.Â
Goal setting also isn’t a one-way street. Both the management and employee must participate in identifying individual and organizational goals. These goals must also be SMART, which means they must be Specific, Measurable, Attainable, Relevant, and Time-Bound.Â
Here are a few tips on how to set goals with your employees:
- Set goals that align with your organization’s goals
- Determine job-specific goals for each employee
- Set SMART goals
- Always emphasize achievable goals
- Continue setting goals consistentlyÂ
- Reward and recognize employees who attain their goals
- Work with employees who fall short on their goals and help them improve
2. Measure employee performance
Measuring employee performance is more than just a numbers game. It also involves intuitive insights from first-line supervisors or colleagues. Moreover, it’s also recommended to measure employee performance more than once yearly. This way, the employee doesn’t get stuck whenever they experience dead-ends in their jobs.
When measuring employee performance, you can try these different methods:
- Graphic rating scales mean you can rate your employee’s behavioral performance such as participation, teamwork, communication, etc., from one to 10.Â
- 360-degree feedback pertains to asking colleagues, superiors, or those who have worked closely with employees for feedback about their performance.Â
- Self-evaluation means letting employees assess their performance using essays or multiple choice answers.Â
- Management by Objectives (MBO) refers to working with employees to set objectives together. This allows employees to know what is expected of them.
- Checklists entail a yes or no system that evaluates how employees perform in certain areas.
Measuring employee performance is more than just a numbers game. It also involves intuitive insights from first-line supervisors or colleagues. Moreover, it’s also recommended to measure employee performance more than once yearly. This way, the employee doesn’t get stuck whenever they experience dead-ends in their jobs.
When measuring employee performance, you can try these different methods:
- Graphic rating scales mean you can rate your employee’s behavioral performance such as participation, teamwork, communication, etc., from one to 10.Â
- 360-degree feedback pertains to asking colleagues, superiors, or those who have worked closely with employees for feedback about their performance.Â
- Self-evaluation means letting employees assess their performance using essays or multiple choice answers.Â
- Management by Objectives (MBO) refers to working with employees to set objectives together. This allows employees to know what is expected of them.Â
Checklists entail a yes or no system that evaluates how employees perform in certain areas.
3. Employ performance coaching
Performance coaching is a strategy that allows first-line supervisors to assess the employee’s needs for development. This type of coaching happens regularly, weekly or monthly, to help employees further their skills and performance. During performance coaching, the coach will identify what the employee needs to enhance skills by thinking of new roles and responsibilities, new job assignments, training programs, or courses.Â
These are some of the elements of performance coaching, according to the Idaho Division of Human Resources:Â
- Build trust
- Define issues
- Coach for success
- Create a plan of action
More importantly, feedback is an essential component in performance coaching. This includes employee feedback, where employees express how supervisors hinder their progress. On the other hand, supervisory feedback entails managers informing and suggesting ways to improve employee performance.
4. Give employees autonomy
One of the reasons employees are disengaged and unsatisfied at work is micromanagement. When you’re micromanaging your employees, you’re not believing in their competency and skills.Â
Managers must never try to micromanage employees because this doesn’t give employees the freedom to use their work ethic, skills, and mastery. Instead, give employees total autonomy over their jobs.
5. Provide regular feedback
One of the most important steps on how to manage the performance of employees is giving regular feedback. Apply the 360-degree feedback method wherein you gather feedback from colleagues and other teams regarding the employee’s performance.Â
Moreover, providing feedback shouldn’t be done only once or twice a year. This should be an ongoing process that will help employees gain clarity with where they are in their careers. Here are some tips on how to provide efficient feedback:
- Strike a professional tone
- Emphasize facts, not feelings
- Watch your words
- Be direct when giving feedback
- Make it a two-way conversation
- Focus on the fixÂ
- Balance negative feedback with praise
6. Reward top performers
You must care to acknowledge and reward your top-performing employees. This is so you can create a sense of purpose in them. However, it might be hard for organizations to sort through top performers as they only comprise about 5 to 30 percent of the total work population.Â
That said, make sure you don’t give similarly equal rewards to both low and top performers. According to the SHRM.ORG, rewards for top performers must be at least 2.5 times higher than rewards for lower performers. Overall, rewarding high performers can increase productivity and balance out the underperforming employees on your team.
7. Create an upskilling roadmap
Upskilling is an essential factor in business, which means learning new skills. But there’s more to it than that. Upskilling on a macro level pertains to “digital transformation.” It means companies must adopt new technology to cater to new or changing jobs.Â
Organizations must create a customer-centric and tech-focused system to improve customer experience, loyalty, and access. That said, organizations must constantly update their tools and ensure tech advancements. Plus, provide employees with more training and development opportunities for upskilling. Both go hand in hand to stay ahead of the competition.
Conclusion
Knowing how to manage the performance of employees would need a tremendous amount of commitment from the management. However, establishing in-depth and meaningful connections with employees through performance management will increase overall engagement, satisfaction, and productivity. If you don’t have a performance management system in place, it’s about time to employ one for significant organizational benefits.
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