The prospect of performance management is often dreaded by employees. Performance management, when done correctly, can be vital in running a successful business. It allows you to understand how your employees perform in various aspects of their roles and whether these are in line with the company goals. It is not there to make employees feel bad or to interrupt their working day, it is in fact, a tool used to help them identify strengths and weaknesses, some of which they may not even be aware of. When done well, it can make employees feel rejuvenated. There are various types of performance management, including appraisals and check-ins. The one you opt for depends on what is best for your business objectives and whether you want these to be formal or informal. You may even want to use a couple of different options.
Performance management is important for any business, and these are some reasons why they are worth consideration.
Identify Training Needs
It can be difficult to determine exactly where the strengths of your team lie, and where they might need some training, without consistent reviews. Whether formal or informal, a performance review gives you the opportunity to discuss the aspirations of your employees and identify areas of training that might be useful to them. Performance reviews can also help with succession planning as you can plan for future vacancies, and where your current employees might be able to slot in. It is vital that you continue to grow your business, and performance management can help with this.
You could have an employee who is on the brink of leaving, and without regular reviews, you may not even be aware of this. Performance reviews can increase retention as you can understand how your employees feel and whether you need to do anything to enhance their enjoyment of their role. For instance, they may feel that the role has become stagnant, and you could consider promoting them if you really want to keep hold of them. Hiring new employees takes a lot of time, resources, and money. If you find a good employee, it is worth doing everything you can to hold onto them.
There are two extremes in the workplace that can turn employees off and force them to consider leaving. If they feel that they are being micro-managed, this can be off-putting for someone that likes to work autonomously. On the other hand, if there is no input whatsoever, this can leave them feeling isolated, and devalued. The step in between this is performance management. If you have regular feedback meetings with employees, even just a quick catch-up every month and a more formal annual performance review, you can basically leave your employees alone to do their job. This is the best of both worlds, as you can keep track of how your employees are doing, without getting in their space and preventing them from doing their job.
The performance review should not be used as a tool just to identify areas of weakness, it should also be used to encourage employees and praise them for what they’re good at. Everyone likes a bit of praise, and this can be a good morale boost.
You could take inspiration from Nationwide, which is one of the most engaged companies in the world. Their ethos is to put people before profits. If you put your people first, your profits will follow.
As Nationwide Vice President, Edward Wagner said, “Most people go into business to make money, we went into business to serve people and ended up making more money than the guys who were out to make it in the first place.”
They have 26,000 associates and $270 billion in assets, so they must be doing something right!
Putting your people first is vital and encouraging them via performance reviews is just one way to do it.