An everyday performance management approach leads to increased productivity
Updated: Sep 26
Written by Justine Pepper, Director, Essential HR
Traditionally, organisations have relied on annual performance reviews to evaluate performance outcomes and provide employee’s feedback. Although, conducting performance reviews are important, conducting them in solo, either annually or twice a year is simply not enough today to get the results you hope for.
If your performance management system only consists of an annual or twice-yearly performance review, chances are you are eroding an employee’s potential performance and risking high staff turnover.
With the start of a new financial year, now is a great time to re-visit your performance management system and look at moving to an “everyday performance management” approach. Not only will you increase employee engagement, but you will also take the pressure off your managers who spend countless hours preparing for and conducting annual performance reviews.
Discover
What is performance management?
Understanding the impact of “solo” annual performance reviews
What does an everyday performance management system look like?
What are the 5 benefits of an everyday performance management system
What is performance management?
Performance management is an ongoing process of communication between a manager and an employee that occurs all year-round. Interactions focus on the development of employees and the alignment of company goals and objectives. Its purpose is to create a working environment that enables both employees and the company to thrive. If done right, on a consistent and regular basis, an organisation will build a positive, performance focused culture.
Understanding the impact of “solo” annual performance reviews
In my 30 years working in Human Resources, I have seen and been a part of performance reviews focused on the annual review process. Often the outcome of the annual performance review determines whether an employee is worthy of receiving a salary increase and/or incentive payment. This approach undermines its true purpose and limits its effectiveness. Here are 2 reasons “solo” annual performance reviews are ineffective:
1. Managers may view them as a burden and timely process
Managers are often held accountable to conduct annual performance reviews with their staff. Majority don’t look forward to them and question how they will achieve them on top of their already busy workload. Some may have anxiety around giving feedback, whilst others may see it as an opportunity to discuss issues and concerns that have built up over a 6 to 12 month period. Either scenario will result in an unproductive and negative experience for both the manager and employee.
2. Employees may be skeptical or disengaged in the process
Employees are expected to self-evaluate via a series of questions or comments and ratings against KPI’s. They too may not look forward to meeting with their manager and receiving feedback. They may feel anxious as they do not know what to expect and what will be discussed. Where an employee feels the review is not genuine, fair, timely and focused on their growth and development they will be demotivated and disengaged, and we all know where that leads!
What does an everyday performance management system look like?
It’s not all doom and gloom. The good news is you do not need to bin your current performance management system and create a new one. You may just need to tweak it. Here are 4 recommendations to create an “all-year-round Performance Management” approach:
1. Implement a monthly 1:1 coaching/feedback program
We use this in our business and encourage our clients to do the same. As an implementation partner of Employment Hero (HR Platform) we utilise the online module, Coaching - 1:1 meetings. It is easy to set up on a schedule, so reminders go out automatically. We ask the employee to answer 5 questions before we meet, and each meeting takes no longer than 30 minutes.
2. Create a questionnaire that consists of 5 questions only
The five questions below will assist in keeping the discussion on track and provides an “agenda” of what to discuss. The employee answers the questions before the meeting allowing the manager to prepare. 5 questions I recommend are:
What would you put your Job Satisfaction Score at between 0-10?
What successes have you had in the past month or things you are proud of?
What hurdles or barriers are you experiencing and what can I do to help you overcome them?
How do you feel about your goals for this month? Are there areas you need further development in to help you achieve them?
What can I start doing, stop doing or continue doing?
3. Dedicate time each month allowing 30 minutes for each team member.
Important: Try not to cancel these meetings. If you need to cancel make sure you immediately book another time. In my experience staff enjoy 1:1’s and look forward to discussing their achievements, challenges, and development.
Make sure you follow through on 1:1 outcomes, insert your notes (dot form is fine) on what was discussed and agreed and provide a copy to your team member.
4. Simplify the annual review process
I have seen some pretty complicated performance plans detailing complex Key Result Areas (KRA) and Key Performance Indicators (KPI’s) or measures over my career and understand why employees and managers find the process so daunting. Some review meetings have lasted for 2 hours per employee and then another hour or two to write up notes and finalise the review document. All this work, yet often the review outcomes are unsatisfactory for both the reviewer and reviewee.
Annual reviews tend to only capture the last month or two, are time consuming and ineffective. They miss any opportunity to give feedback and recognition that is timely and on target.
Conducting 1:1 meetings monthly allow the achievement of KPI’s to be tracked on an ongoing basis. The manager and employee can work together to promptly find solutions, communicate changes, address issues and identify development opportunities.
The annual review should be a collection of the 1:1’s throughout the year. Preparation for the annual review, such as collecting data around achievements, outcomes, and issues, should already be done. The review discussion should be a quick summary of past performance, reinforcing achievements and issues over the year.
The discussion should then focus of the future. For example, new goals or targets, new challenges, new development and career opportunities.
What are the 5 benefits of an everyday performance management system
More than ever managing people effectively has become so important. Finding talent in the current labour market has become near impossible. Therefore, I cannot stress enough to nurture the team you have. Benefits in shifting to an “everyday performance management” approach are:
1. Improved employee engagement
Consistent feedback and coaching from managers lead directly to increased engagement from employees while developing the ability of managers to provide effective coaching and feedback skills.
2. Retain talent
Employees who feel that their company is invested in their success stay with their employer, increasing employee retention.
3. Develop leaders within
This consistent development and partnership between managers and employees allow for the development of leaders from within the company. This leadership path also serves as a motivating force for employees, who can see that their hard work will be rewarded with promotions and other benefits.
4. Increase in productivity
Clear expectations and roles set employees up for achieving goals from the start. Productivity will increase thanks to increased engagement, clear goals and upskilling of employees.
5. Reduction in absenteeism
A happy engaged workforce leads to a reduction in sick leave, workplace injuries and staff turnover.
About Essential HR
As human resource and industrial relation specialist our talented team of HR professionals’ partner with businesses to advise, guide and support them in all HR matters.
We combine workplace industry expertise with technology to deliver tailored, practical and efficient services to help organisations be compliant, productive and successful.
Visit www.esshr.com.au or contact Justine Pepper directly at
E: justine.pepper@esshr.com.au or M: 0419 568 899.
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