Harnessing Performance Management Techniques to Bolster Productivity and Profitability

For an organization to meet its strategic objectives, it is crucial that employees’ goals are aligned with the organization’s goals to maximize efficiency and productivity and, therefore, profitability.

The performance management process is a powerful way to foster alignment simply by defining the responsibilities and outcomes through which employees can add value to the organization.

What is a Performance Review?

The performance review is most often centered on a written document that defines the employee’s goals and objectives for the period. To be most effective, goals should be SMART – that is, they should be Specific, Measurable, Achievable, Relevant, and Time-based. ARI’s HR professionals are available to assist managers in drafting succinct and effective performance reviews for staff members.

Performance review discussions most often take place during formal meetings, usually scheduled once or twice per year. They provide a method for managers to formally assess an employee’s effectiveness by evaluating how well they met their defined goals and objectives. This is also a time for managers to gauge employee morale, gather feedback about the organization, including what processes warrant improvement, and review lessons learned from the previous year.

Prior to the performance meeting, the employee ideally completes a self-assessment. Criteria will address such things as:

• The quality and quantity of work completed during the period
• Whether the employee was reliable and met deadlines
• Did he or she take initiative?
• Was creativity demonstrated?
• Was good judgment exercised when making decisions?
• Did he or she work well with others?
• For managers, how well did he or she manage the members of their team?

In addition, the employee and manager will define goals and objectives for the subsequent review period.

Defining Goals and Objectives for New Employees

Goals and objectives for new hires will usually be based on the original job description used to fill the role. A well-written job description identifies core competencies needed and outlines essential functions related to the position.

For example, if you have hired a customer service representative, one of the essential job tasks might be to use the company’s SalesForce customer relationship management database. At the time of the initial review, the manager would discuss the employee’s comfort level and knowledge of the system, address challenges they have experienced, and possibly suggest additional training that might be helpful.

New hire performance reviews provide an opportunity to get valuable feedback about the onboarding process and can help organizations identify issues early on that might affect employee engagement or retention later.

Conducting Probationary Reviews for New Hires

Evaluations of new employees enable managers to identify performance issues and to solicit feedback from the new employee about what additional training or resources they may need and their overall impressions of the company.

Best practice suggests that 90 days is the appropriate introductory period to have an initial assessment of a new employee’s performance.

Avoiding Pitfalls in Performance Management

Many organizations make the mistake of discussing performance only once a year during the formal review. To be effective, employees should receive feedback and coaching throughout the year. If an issue arises, it is best to address it quickly rather than waiting for the end of year review meeting.

Vague feedback is not constructive. Though it may be uncomfortable, it is important for both parties to be clear and direct in their comments and assessments. For example, if a manager is asking an employee to “improve” or “get better” at something, he or she must identify specific behavior and what he or she expects the employee to do to demonstrate improvement.

360° Reviews and Peer Reviews

To get a clear picture of employee performance across the organization, it is often helpful to implement 360° reviews. A 360 review is a performance evaluation tool that solicits feedback about an employee from all directions, including supervisors, managers, peers, direct reports, and oftentimes, clients.

360 reviews provide a more objective analysis of performance because it takes into consideration feedback from multiple individuals at various levels of the organization. To be effective, 360 reviews require follow-up. Once all results are in, the manager should schedule a review meeting with the subordinate supervisor to determine the proper path forward.

A performance management system is a powerful tool but implementing a robust process that yields results are a time-consuming and detailed undertaking.

The team at ARI is available to assist you in each aspect of the process. If you would like to explore how we can help, please contact us today.