training seminarManaging performance well can have a real impact on the bottom line in your small business; improving results, motivating employees, addressing problems quickly and saving time and potentially money when problems are not dealt with and escalate.

So what does it look like? Managing an employee’s performance effectively can be divided into four stages;

1. Setting standards

Does everyone know exactly what they should be doing? Do they know what a really really good job looks like in their particular role?

In order to establish whether an employee is performing to an acceptable level you need to have set standards of performance or criteria for measuring performance so that the employee is fully aware what is expected of them. This makes achieving good performance and (where necessary) demonstrating a failure to perform much easier.

Things like a decent job description, relevant measurable objectives and quality controls where appropriate can all help here. You don’t want the employee to be in any doubt as to what good performance actually looks like.

2. Day to day management of performance;

Day to day performance management is the ‘hands on’ part of managing performance effectively. It means ensuring what needs to be achieved is achieved, on time and in the correct way, not assuming everything is going to plan but making sure it is. It doesn’t take long but doing it properly is the easiest way to ensure problems don’t develop into time-consuming and expensive issues.

Day to day performance management involves:

  • Talking about how work is progressing
  • Discussing whether it is being done to the necessary standard
  • Reviewing priorities
  • Giving and receiving timely feedback
  • Identifying and overcoming any obstacles to good performance
  • Taking time out to remedy poor performance as quickly and effectively as possible

How day to day performance management works will depend on the individuals, working arrangements and roles involved, but it needs to involve some kind of regular communication to allow for discussion as outlined above. Regular team meetings and one-to-one meetings with staff are important, and scheduling these into the diary will help ensure they happen.

Try to encourage your team and praise and thank them as on an ongoing basis. Sometimes it’s easier to notice and recognise good performance if you catch people doing well and say so immediately. Show an interest in what people are doing without ‘micro-managing’ and be available, visible and accessible. If people need support, have questions or concerns or need direction many find it easier to ask in a very informal situation rather than in a focused meeting environment.

3. Performance development;

This is about improving skills, knowledge and experience to achieve better results.

It doesn’t always have to involved expensive training courses, and in many small businesses on tight budgets these just aren’t realistic anyway. Instead you could consider helping the employee maximise and use their learning from the following which may be done as part of their normal job:

  • Presentations, meetings or talks they may attend
  • Other employees they come into contact with
  • Reading and other research they can do themselves
  • Visits to other organisations

More structured performance development can also take place through using the following:

  • Coaching – asking someone else within or outside the organisation to give specific advice or guidance
  • Shadowing others – shadowing individuals within or outside the organisation can provide good learning about other jobs and other ways of working
  • On the job learning – can be provided by the line manager

At the employee’s annual appraisal, ensure that any performance development needed to enable them to perform their job effectively is discussed together with solutions which may be possible, and plan these where possible.

This way even if the budget is very small, the employee will still benefit from a sense that their development is important to the organisation.

Planning in advance like this will also maximise the use of free or cheap personal development opportunities, and will maximise effective spending of any budget available.

4. Performance review or appraisal;

An appraisal is an annual or more frequent discussion setting objectives and looking back at performance in the previous year.

This is the bit everyone hates, and it can feel a bit forced or ‘false’ especially in the context of the close and informal working relationships that are often a feature of small businesses. But I still think it’s very much worth doing.

Apart from anything else it’s a useful ‘prompt’ to make you stop and think about someone’s performance and physically sit down and talk to them about it. You don’t need a lengthy form, lots of boxes to tick, you don’t need scoring if you don’t want it, and you don’t need ‘matrices’, ‘competencies’ or ‘KPIs’ if you don’t want them. But a discussion about performance and objectives and a written record of that discussion is a very useful thing.

Conducting some kind of performance appraisal meeting ensures there is a physical written record of what the employee’s performance looks like at a set time, and of any concerns that have been raised. In the event of dealing with problem performance later on, you’ll find having forced yourself to do annual appraisals will be worth it for that alone. If you need to start some kind of disciplinary process/other formal performance management mid-year, your staff member won’t be able to claim concerns had not been raised before, or that they had no opportunity to ask for training or support, or that they didn’t understand what was expected of them.

Performance management in a small business can achieve these four stages without being over-formal, and without being too much of a drain on your time, but each stage will be easier and more effective if combined with all three other stages. A stage 4 performance appraisal is much easier and more valuable an exercise if you’ve been doing stages 1, 2 and 3 throughout the year.

If you would like any assistance or advice in dealing with performance in your business do get in touch.