As you grow as a company, your HR grows with you. And at some point, you reach the stage where the administrative processes are all working nicely – so the basic HR needs of your employees are all covered.
And it’s at this point that you should start thinking about organised and structured performance management. This will help you keep tabs on employee productivity and output, which is vital in a fast-growing company where lots of new people are joining.
But for your performance management to be successful you need to move away from the dreaded ‘annual review’ style that is still so prevalent. Some of the world’s most innovative companies are realising that performance management should go beyond the occasional review and evolve into a regular, two-way process that serves to engage employees and connect them with your company goals. This is particularly important when you’re experiencing rapid growth, as you need everyone to be on board and performing as well as they possibly can.
Here are some of the steps you should take to implement a performance review programme that both protects and enhances your company’s growth:
Invest in your employees’ happiness
Making your employees happy may sound a little whimsical, but it makes sound business – as well as ethical – sense. A recent study at the University of Warwick found that happiness made people 12% more productive, whilst unhappy employees were 10% less productive.
So, make sure your performance management centres on the human aspects of your business. During feedback sessions, managers should ask employees if they are happy. And, if not – why not? Issues should be addressed when raised and proper efforts made to fix the problem.
For proof of the value of workplace happiness, look no further than Google. When the search giant invested more in employee support, staff satisfaction levels rose by 37%. And, given that the average Google employee now generates $1.2 million in revenue each year, it’s easy to see that happiness pays.
Give credit where credit is due
When employees do well, you should reward them. Not only is this fair and proper, but it will also boost and protect your business. Because when you reward someone for doing well, they tend to do even better. By contrast, lack of recognition is one of the main reasons for people leaving their posts. And when you lose an employee, all that experience and knowledge goes with them, leaving you to invest in training someone else.
But rewards don’t have to be about money. Financial compensation is obviously important, but people also want to feel valued – so prizes, awards and a simple ‘well done’, can be used to make your employees feel valued and respected.
Do it little and often
Cargill – a US-based food producer and distributor – recently looked at new ways to motivate its 155,000 employees. This resulted in moving away from annual performance reviews and introducing short, daily bursts of encouragement and feedback from managers instead. This system is designed to be forward-looking and concentrates on what can be achieved – rather than dwelling on the past. Cargill has reported measurable improvements as a result.
Similarly, tech company Adobe recently introduced a system of regular check-ins and feedback and has since reported a cut in voluntary employee turnover by 30%.
Tell people what you want to see
For performance management to work properly, your employees must understand what is expected of them, so you must set goals. This provides a defined target to reach and makes it easier for managers to monitor and assess progress.
Goals should be relevant to each person’s role and abilities. And the more clear and specific you make them, the better. A goal of increasing sales, for example, is very vague – a 1% increase would hit this target, but would hardly be a victory. Setting a more specific goal – such as making an extra sales call each day – is more motivational.
Finally, each goal must be realistic, as unachievable targets will demoralise your employees. Research shows that employees are most highly motivated when there is a 50% chance of achieving a goal.
Learn from others
Lastly, to develop performance management that really works for your company and helps drive your growth – you need to learn from others. Do your research and read up on growing companies that are achieving new and exciting results with their performance management techniques and methods.
Cast your net wide to tap into best practice from across the world. And don’t just concentrate on your own sector (although that’s a good place to start). Look everywhere and learn from the best until you find a performance management system that suits your company, your managers and your employees.