Effective performance management is important to any kind of business as it helps it align its resources, employees and systems to meet its unique strategic objectives. As a business owner, it also provides you with an early warning of possible problems, and allows you to know when you must make changes to keep your business on track.

You’ll often find, however, the performance management system in many companies wobbly, slow, if not downright broken. I understand that in a real world, it can be difficult to have an effective performance management system, but that doesn’t mean you can’t!

As a business owner, all you need to do is:

Define your expectations

If you don’t understand your organization’s objectives well, you are bound to lose focus. Again, you’d be missing the point to assume your managers already understand what you need from them. You need to build the vision and aims of your organization into your performance management training. Highlight and emphasize what your managers have to deliver from their reviews because they are the ones to deliver these expectations to the employees anyway.

So, make your organizational vision clear and unique; ensure it defines the future of your organization, and it’s present. When you establish your vision with managers, it is able to trickle down, reaching all areas of the organization through their performance reviews.

Emphasize on the significance of regular reviews

Your strategy here is to counter the idea that managers should conduct yearly reviews as that almost only makes them ‘routine’ and (therefore) not very important. Understand that conducting them ordinarily only makes them an every end-of-year inconvenience. Instead, have your managers understand the importance of conducting regular review sessions.

You can do this by:

  • Highlighting the fact that they are a way to starting conversations with employees. Regular reviews give people who tend to feel like they don’t have a voice in an organization the chance to express their viewpoints.
  • Noting how it helps managers in keeping track of short-term objectives (especially when working on projects that contain numerous milestones).
  • Discussing how easier it is to reward when there is a running record of reviews. A manager will figure out the best way to reward or incentivize employees based on performance.

Define the Rating Scales

 A rating scale provides an instant way of analyzing the performance of an employee- for instance, you may ask a manager to rate the employees on a scale of 1 to 10 on various aspects of their jobs.

A rating scale, however, doesn’t mean a lot if it is not well defined.

So, define what all the levels of the scale mean. You shouldn’t allow managers to assume that a 7, for instance, means average performance. A more usable definition of 7 out of ten would be:

“You meet the organization’s performance expectations. You generally achieve the results in accordance to your role.”

While this is an indication that the employee (who’s rated 7) is performing the role as is required of them, there is still room for improvement. It also means the employee is not doing extra to give more to the organization. Therefore, a manager would know that they could still do something more to motivate that particular employee.

Avoid the lecture format

You must have heard that after meetings, 46 percent of people are usually left with no idea of what they have to do next. This is largely due to ineffective communication. If your managers fail to communicate well in meetings that actually serve as your performance reviews, employee performance won’t improve.

Your performance management strategy here should be focused on message delivery. You don’t want to put your employees through one-hour long lectures when they attend reviews. I personally would lose focus and begin resenting the lack of two-way communication.

So, train your managers to appreciate the importance of two-way discussions, knowing that it is important to give them a voice (or at least make them understand that they have a voice). In any case, when the positive message is lost, it leads to resentment.

Train the managers to develop a habit of highlighting key discussion topics, and use the topics for their own feedback. Also, ensure they understand the importance of encouraging employees to talk about themselves as that creates more open reviews that improve the morale of everyone.

In conclusion, I have to admit that the elements of a good performance management system can be simple in theory. Let’s see how you integrate them into your business.

All the best!