If people are the greatest creators of value in organisations, then a performance management is critical for an organisation’s success.
We’ve covered the strategy behind great performance management, but what about the tools and tactics? We’ve curated the ultimate A-Z of Performance Management. And below, you’ll find the 7 performance management tools to consider to build happy, high performing teams.
Good performance management is critical for an organisation’s success
The statistics around performance management tell us a worrying story:
- 77% of HR professionals believe their company’s performance management tools and processes aren’t an accurate representation of employee performance.
- Fewer than 50% of employees feel as though they understand their current work expectations.
- 8 in 10 employees feel current performance reviews are at best ‘average’ at improving their performance and future development.
Sound a little too familiar? Then read on.
1. Frequent feedback
If feedback isn’t already at the centre of your performance management process, it needs to be. Harvard Business School found 81% of managers of high-performing teams believed two-way, transparent workplace feedback was the most effective tool to drive success.
Constructive feedback between employees and managers is a vital performance management tool. That’s because it unquestionably aids ongoing development. Add to that the fact that requesting, listening to and acting on feedback from employees is a sure-fire way to drive greater engagement across your team. Feedback becomes an essential tool for all effective managers.
But to land effectively, feedback must be transparent. It’s tempting for managers to hold back snippets of negative feedback in a well-meaning attempt to avoid hurt feelings. But managers aren’t helping their people to break bad habits and develop their own performance.
Use the FASTT feedback framework as one of your performance management tools
Frequent: Research shows that feedback is less effective at changing behaviours if it’s more than 2 weeks after an event. Feedback should happen weekly for most impact.
Appropriate: Feedback needs to be framed positively (focus on improvements), be tactful and simple to follow.
Specific: Feedback must be related to observed behaviours, performance or against a clear and measurable goal. Be sure to include clear expectations, what wasn’t quite right and plans for improving.
Transparent: Honest and open feedback is the only way to impact future performance. It also helps build trust within your team when everyone knows they’re able to speak freely. Steer clear of time-tracking software, which only serves to undermine trust.
Two-way: Typically, feedback is seen as one-way. But feedback needs to flow down and up the chain of command. Great managers request feedback from their people and listen to it. If your people see you asking for and listening to their feedback, trust is further strengthened.
2. Recognition’s a quick win performance management tool
Employee recognition has a lasting impact on:
- Increasing productivity
- Decreasing employee turnover
- High levels of employee satisfaction
- Improved team bonding and culture
- Higher levels of self-reported loyalty
- Decreasing stress and absenteeism
One of the things we love is some well-earned appreciation from the people around us. This is twice as true in the context of work. Gallup found that the leading reason for people leaving their jobs was a lack of recognition from their managers.
It could be a high-five for a job well done, a special shout-out during an all-hands meeting, vouchers for a takeaway or even a bonus for meeting a monthly goal. However you choose to do it, employee recognition is a key tool in every manager’s arsenal.
When an employee feels appreciated and recognised for their individual contribution they become more engaged in their work. The frequency and consistency at which a manager recognises the efforts of their team members is a key determiner for how engaged that team will be.
Often, rewards come hand in hand with recognition programmes. But know that monetary rewards in particular usually only offer a short-term benefit to engagement, performance and retention.
For longer term impacts, rather than a short-term performance management tactic, focus on recognition processes that give public kudos, involve senior leadership and improve future job prospects.
3. Personal and professional development
Personal development, in our opinion, is the true goal of great performance management. In fact, Matt Mullenweg, CEO and Founder at Automatic believes the secret to great success in any business is a constant and consistent focus on developing your people.
Employee development naturally improves performance. It also drives commitment, passion and resilience. All too often performance processes focus on chastising bad performance and setting future targets without really focussing on how an employee can really improve and grow. Effective performance focuses on helping people discover their potential and what they need to do to achieve it.
4. Questions underpin all your performance management tools
One of the most common things we get asked is “what questions should we ask in a check-in?” And the answer is, frustratingly, it depends. Sorry.
One of the most effective tools for running feedback more frequently is an employee check-in. Check-ins are designed to be run often (ideally weekly). They should be lightweight and simple for both employees to complete and managers to review and feedback on.
Check-ins should collect employee feedback and goal progress data that impacts a wide range of performance processes including performance reviews, goal-setting, and recognition schemes. Focus on asking for specific updates to individual goals as well as the key pillars of engagement: successes, challenges and peer recognition.
Here’s a few questions to get you started:
- What successes have you had this week?
- What challenges have you had this week?
- Has anyone gone the extra mile that you’d like to shout-out?
- Is there any support you need from me?
- On a scale of 1-5, how confident are you in completing your current goals?
5. Goal-setting
Helping employees set and reach goals is a vital part of every manager’s job. But ever wondered why? It feels just like something we’ve always done, but there are clear reasons why.
Firstly, your employees want to see how their work contributes to larger organisational objectives and setting the right targets makes this connection explicit for them.
Goals act as motivational targets for people to work towards. It’s a performance management tool that gives autonomy and purpose, which are two key elements of human motivation. By setting goals we give people clear purpose and allow them to be autonomous in their day-to-day work.
Goals by their own nature make us more productive (regardless of what the goal itself is) and improves performance. One study found that people who had goals set were faster at completing tasks than those offered financial rewards for better performance but no clear goals.
Managers need to set clear and actionable goals for their team, check-in frequently to ensure these goals are still appropriate and give feedback when required on progress.
Objectives and Key Results (OKRs)
OKR (Objectives and Key Results) are the leading goal-setting process for modern, fast-paced organisations. They’re a simple goal-setting system to create alignment between company and personal goals, and engagement around measurable outcomes. They’re typically transparent and set, tracked and reviewed regularly, usually quarterly.
There’s some unique and core concepts that make an OKR effective
Agile goals: Instead of annual static planning, OKRs takes an agile approach allowing organisations to better respond to change.
Simplicity: OKRs are straightforward and need to be understood by everyone in the business. OKRs reduce the amount of time spent setting goals and therefore pushes focus to achieving goals over setting them.
Transparency: The primary purpose of OKRs is to create alignment in an organisation. To achieve this OKRs are public to everybody within it. Subsequently everyone has access to everyone else’s OKRs.
Nested cadences: OKRs take account of the fact that strategy and tactics have different natural tempos.
Ambitious goals: Targets set should be ‘stretch’ based, with the intention being that 100% completion is unlikely – if you are always completing your goals, they are likely too easy. A typical completion rate of 70% is deemed a success.
SMART goals
A SMART goal uses its five components to build a goal that defines exactly what needs to be accomplished and by when. It also covers how you will know when you have been successful. They are:
Specific: To be effective, a goal needs to be specific. Include details on the nitty-gritty so that your people can’t misunderstand the task at hand.
Measurable: To track progress in an accurate and simple manner, any goal needs to be measurable. Use benchmarks and KPIs within your goal to add the ability to quantify and measure progress.
Achievable: Goals need to be realistic. That’s one key difference from OKRs and not some highly-elevated ideal of what success could look like. It’s important to consider any limitations that might impede success.
Relevant: There should be a real benefit attached to reaching any chosen objective. No one wants to waste their time on dead-end tasks that serve no purpose. At this stage, evaluate why you are asking your people to perform the task at hand – if you can’t justify it, then it’s likely not a good goal.
Time-based: Good goals don’t go on forever. The best goals have a relatively short shelf life as this mitigates the likelihood of scope creep or organisational change. This also gives you another yardstick against which to measure success – i.e. did we complete on time?
6. Performance conversations
Gallup says 80% feel traditional reviews offer no lasting benefit to them. And one study shows that 64% of managers feel the most important KPI of a review is completion, not impact on future performance. But there are fare more effective performance management tools available. We call it Continuous Performance Management.
Effective reviews aren’t about chastising employees for past performance but instead need to focus on the bad habits that need breaking or the good ones that need encouraging and reinforcement.
You’ll see immediate impact by changing just a few things.
Review effectiveness: Move away from the traditional annual or bi-annual review and nothing in between to a more continuous approach. Consequently you’ll see much higher effectiveness.
Focused on the future: Re-frame the discussion away from a day-to-day focus. Be more future-focussed and help staff develop so that they improve their own performance.
Removes bias: Evidence-based discussions, and not ‘how I remember it’ removes recency bias, something that’s plagued reviews for decades. Even more employee feedback and performance data helps to eliminate bias here.
Time to listen: Ensure you give your employee the space and time to speak. Especially because this isn’t about you detailing their ‘good, bad and ugly’. Effective reviews are a two-way discussion. For that reason you’ll need to use your active listening skills to truly understand what’s impacting their performance.
Underperformance
One outcome of effective performance management is highlighting when and where your people are underperforming. Elements like feedback, goal-setting and transparency will help you measure how much underperformance is impacting your team and the wider business.
But what do you do next? And what performance management tools are available to you?
Dealing with underperforming employees need not be difficult, but you need a solid intervention plan. Thankfully, if you have a good rapport with your team and a culture of open and honest feedback, the difficulty is lessened considerably.
Don’t just ignore it: If underperformance is allowed to fester, it’ll worsen because it’s extremely unlikely an underperforming employee will self-correct their own performance. They’ll need your guidance to get them back on track.
Honesty: It might feel like you should sugar-coat things to be nice, but being absolutely honest about the issue and what could be improved as early as possible is critical.
Empathy: Make sure to show empathy through all your conversations. After all, the underlying problem might be out of your employee’s control. And they may not even realise they’ve missed the mark.
Ask for another perspective: A fresh pair of eyes or a new perspective can help problem-solve underperformance. 360° feedback’s perfect for this. Don’t be afraid to ask for help or another point of view if underperformance is lingering.
Make a plan and action it: Create a concrete plan for what both you and the employee are going to do differently, agreeing on measurable actions so you can mark progress. You should also ask what resources the employee needs to accomplish those goals. Then, give them the time, resources and support to make the agreed changes.
Interventions
Simply running performance reviews where you reiterate an employee’s performance over a given period won’t benefit anyone. You need performance management tools that focus on developing your people so they can be better. Particularly where issues do arise, it’s essential managers work with their people on effective interventions to correct future performance.
By moving to a more continuous approach to performance management, managers increase the likelihood that they catch issues early making intervention not only easier but more effective. Head to U for tips on what to do when one of your team’s underperforming.
One of the biggest issues with traditional approaches to performance management is the huge amount of time that goes between formal discussions between a manager and employee. In this time, small challenges grow into reasons why people stop caring, become disgruntled and leave jobs.
When you see something that requires action, as a manager you need to ensure some action is taken. Work with peers, your HR team and business leaders to intervene as soon as possible.
7. Microsoft Teams
We’ve become more asynchronous in our communication habits. Even as many businesses look to move back to the office, we’re still having conversations in a more flexible way as individual colleagues might work different hours or at different locations from day to day. That’s where Zensa in Microsoft Teams makes a great addition to your performance management tools.
Almost overnight Microsoft Teams has become essential. As a result, we talk over it, we book meetings through it and thanks to the huge array of apps, we can project manage, design, plan and even book holiday through it.
So why not manage performance through it? After all, why give your people a brand-new tool that needs yet another password, feels alien and perhaps presents IT with security concerns when it can be done through Microsoft Teams?
Look for tools like Zensai that offer you and your people the ability to run performance management without adding to your tech stack by integrating with Microsoft Teams.
