Performance management: getting the most out of your team

Whether you’re dealing with new or long-standing members of staff, performance management is a useful tool in assessing an individual’s performance and identifying areas for development. A successful performance review will not only benefit the employer as they experience increased productivity among members of staff, but it will also benefit the employees themselves as they gain clarity on how they can further their careers.

Performance management process

In recent years, there’s been much debate surrounding the efficacy of performance reviews. However, when implemented correctly, research has shown that performance feedback can be a very valuable management tool.

Your performance management process needs to be clear and structured so that both you and your employees are aligned. You want to ensure that your review process gives a voice to your employees, and establishes well-defined aims by the end of it. A successful process will implement the following steps:

• Set and agree both professional and personal objectives in advance via a 1:1 meeting. (These should be recorded and signed off by both the employee and their manager)
• Assess the employee’s performance against the agreed criteria
• Evaluate what managerial direction can be given to maintain and improve performance
• Feedback to the employee in a constructive manner
• Set and agree the targets and areas of development with the employee e.g. Increase customer retention rate by 10% by the end of Q2

Conducting a performance review

Performance reviews will differ with new and pre-existing employees. New starters will undergo probation reviews, whereas long-standing employees will have a quarterly, bi-annual, or annual appraisal.

Probation reviews allow employers to regularly monitor the work performance of new starters to assess their suitability to their new role. An appraisal, on the other hand, enables employers to assess and develop permanent employees over a longer period of time.

Listed below are the main features and differences between a probation review and an appraisal.

Probation review

• Usually conducted monthly and typically lasts between 3-6 months, although employers can extend this if necessary
• Establishes new objectives and training on a monthly basis to further integrate the new starter into the business
• Helps managers to identify any areas of concern early on
• Enables employees to track their progress consistently
• Can result in the termination of an employment contract if the objectives are not met

Annual performance review or appraisal

• Conducted quarterly, bi-annually, or annually
• Measures employee performance and development over a prolonged period of time
• Provides a platform to discuss long-term career aims and progression
• Discusses new objectives / areas of development in line with business and career goals
• Highlights training opportunities and how the business can help
• Can be used to benchmark the possibility of a promotion or pay rise

Measuring employee performance

When creating performance reviews, you’ll need to establish criteria to measure your employees against, across all members of your team. It’s advisable to define each set of criteria so that the employee understands exactly what’s expected of them. Your criteria will be used to measure the employee’s performance against objectives previously set, whether in the previous year or previous month if a probation review.

Here are some examples of criteria and how you might define them:

• Listening – following instructions, retaining information, and allowing others to speak without interruption
• Teamwork – integrating with the wider team both in an individual and group setting, and showing support for colleagues in order to achieve the wider business aims
• Leadership – boosting team morale through a positive attitude, leading by example, using initiative beyond basic responsibilities for the benefit of the business
• Productivity – using effective time management skills to achieve aims
• Goals and target achievement – consistently achieving Key Performance Indicators 
• Quality of work – adhering to the expectation that all work is carried out to the highest possible standard (it may be useful to reference audit reports when assessing this)
• Attendance – consistently punctual, following break times, and adhering to the company’s leave policy with regards to sick leave (be mindful not to breach employee rights concerning protected leave)
• Company values – embodying company values in all colleague and customer interactions, and demonstrating an active interest in achieving business aims.

Objective setting

Always ensure that any objectives you set are aligned with both the business goals and the employee job description.

When goal-setting, it’s good practise to use SMART objectives. Doing this will help you set clear expectations, and ensure aims are planned, clear and trackable, giving your employee the best possible chance of achieving them.

SMART objectives are:

• Specific
• Measurable
• Achievable
• Relevant
• Time-based

Objectives should be split across both work and personal goals.

Work objectives 

Work objectives contribute towards achieving the wider business aims. Work objectives produce business results and are often measurable through the use of Key Performance Indicators.

Personal objectives

Personal objectives are focused on the development of the employee. This could be by improving their soft skills or by developing their level of expertise in a particular area through a course, training, or by taking on new responsibilities.

Examples of appraisal objectives

Work objectives:

• Increase monthly sales revenue by 10%
• Reduce call time to an average of 10 minutes per customer
• Sign up at least 20 new customers in Q2

Personal objectives:

• Become more of a team player by congratulating others on their success
• Develop presentation skills and act as a speaker for at least two company events
• Improve time management skills by allocating a timeline to every task and using a planner

With each objective, it’s important that managers link them back to how they’ll contribute to the wider business aims. Not only will this ensure the objectives are working towards bettering the business, but it also helps employees to understand why they’re working towards these objectives.

Delivering feedback as part of a performance review

Delivering feedback is a balancing act between being positive, while also being honest about any concerns. Managers should be careful to frame this feedback in such a way that’s both constructive and clear, but at the same time doesn’t leave employees feeling discouraged.

Remember, the aim of the performance review is to bring the best out of your employees, so encourage your managers to keep this at the forefront of their minds when conducting performance reviews.

Highlight success stories

Performance reviews are an excellent opportunity to give your employees recognition for their work and this should be done in every employee’s review. This is a time for you to outwardly recognise any of their behaviours that you wish to encourage. When considering the positives, take time to reflect on any noteworthy results, any actions that have impressed you, and any skills that have been developed.

Highlight areas of development

Every employee will have areas of development and managers have a duty to deliver this feedback in a way that’s constructive and sensitive to the employee’s wellbeing. So, instead of just listing problems, always follow with tangible solutions. If the feedback is delivered negatively, there’s a strong chance that the employee will leave the meeting feeling disheartened and demotivated, ultimately defeating the object of the performance review.

Tips for delivering feedback constructively:

• Be factual and use concrete examples to convey points
• Use an uplifting tone of voice
• Frame any criticism as an opportunity to learn, followed with a solution
• Use open body language such as eye contact and smiling to put them at ease
• Always finish feedback on a positive or optimistic note

Tackling employee underperformance

If an employee has underperformed, this needs to be addressed honestly in an open discussion. This will give the employee the opportunity to acknowledge and explain the reasons for their underperformance.

When considering the underperformance, try to identify the root cause by considering any factors such as health and wellbeing, attendance, work ethic or underperforming on KPIs.

The outcome of this discussion will determine the course of action. In some circumstances, it may be necessary to put the employee back on probation, arrange more frequent appraisals, or even terminate employment in cases where they’re not improving.

360 feedback

360 feedback is a method by which an employee receives anonymous and confidential feedback from their peers, managers, direct reports, and sometimes from clients. Employees are graded on a wide range of behaviours which demonstrate how others perceive their workplace behaviours. This is ultimately used to identify the employee’s strengths and development areas, and how they’re perceived by others.

Pros of 360 feedback

• Provides an anonymous platform to provide honest feedback
• Develops a stronger sense of self-awareness
• Covers a broad range of behaviours
• Respondents have the opportunity to leave additional comments
• Gathers the opinions of several colleagues to gain an overall consensus

Cons of 360 feedback

• Respondents may struggle to provide objective feedback, particularly when they have a close relationship with the employee
• Can be damaging to morale in the event of negative feedback
• Process of designing and implementing 360 feedback is time intensive
• Feedback may not be very informed if the respondent hasn’t worked closely with the employee
• 360 feedback requires significant buy-in from employees, starting with senior management

Implementing 360 feedback

How many respondents to select

When implementing the 360 feedback, it’s best practise to use a larger number of respondents (8-12) so that you gain a general consensus on the employee. If the number of respondents is too few, the results can easily be skewed by the answers of one person, therefore not giving a fair representation of that employee.

Who to select

When selecting the respondents, choose a variety of employees that span across peers, direct reports, and management. It’s also advisable to choose respondents that work closely with the employee as they’ll have observed more behaviours and be in a better position to provide feedback. Equally, be conscious of not selecting too many respondents who have a close personal relationship with the employee, as this may result in a biased report.

How to feedback

It’s important to train your management team to interpret the 360 feedback correctly. Managers should bear in mind that although it can be useful in identifying strengths and weaknesses, it may not always give an accurate representation of that employee. Therefore, managers should use their discretion and balance the 360 feedback with their own opinions and observations for a fair assessment.