As a manager of some of your organizations’ most valuable resources, you are accountable to the results of your team, positive and not.
Essential to your success as a leader will be your understanding and ability to organize your company's performance management cycle. Somewhat of a boardroom buzzword, this is your organization’s blueprint for how to review and evaluate its best asset – the team.
The purpose of performance management is straightforward – align employee efforts with the business's goals. Doing so is more challenging and requires a concerted effort from all levels.
“The elements of a good performance-management system are simple, but integrating them into a business’s fundamental operating system is more difficult than it seems.” – McKinsey and Company
The Evolution of Performance Management
Traditional performance management is a cycle of initially setting goals, followed by a length of time before those goals are formally reviewed. For example, a landscaper could have a goal of a minimum of 4/5 star satisfaction reviews from customers. At the end of the year the landscaper would be reviewed based on their goal and whether they fell short, met, or exceeded it.
The traditional employee management cycle, however, is limited. Employee efforts circle around these two events with a spike in output after setting goals and again before reviews are due. This is accompanied by a lull of progress during the time in between.
The evolution of performance management has shifted away from a two-step process and towards a multi-step cycle. It is an active approach that spreads out the efforts of a reviewer and better adapts to the changing environment of a workplace.
In general, there are four common elements of a performance management cycle: Plan, Monitor, Develop, and Review.
However, a Google search will show a large range of different ways these four elements are divided and labelled. Including the U.S. Office of Personnel Management’s (OPM) use of five.
For this purpose though, let’s stay simple and highlight the four.
The Modern Performance Review Cycle – Plan, Monitor, Develop, and Review
Plan – Setting Goals and Establishing a Schedule
The starting point of the cycle is to plan for the future and establish a common language around goals and what both success and failure are defined as.
This is the time to set actionable and achievable goals that are relevant to the employee’s position. In the case of a landscaper working in a maintenance crew, an example of goals relevant to their position may be days without incidents, attendance record and supervisor performance reviews.
In addition to setting these initial goals, establish a timeframe around when they should be reviewed. An annual performance review is typical, but take this time to also schedule ongoing check-ins at regular intervals between your planning and review stages of the cycle.
- Set key performance indicators, establish a schedule.
- Make the plans relevant to the position.
- The purpose of the planning stage is to set relevant goals on an established review schedule.
Monitor – Recording Performance and Observing Relationships
Your job now as the leader is to get a sense for how your employee is doing between the stages of planning their goals and the performance review at the end of the cycle.
This is a great time to get feedback from the employee’s coworkers, supervisors or customers. Each piece of information you get about a team member or employee is an opportunity.
Information and insight about an employee’s performance will allow you the chance to identify opportunities for course corrections or to celebrate successes. These details will be important for your regularly scheduled check-ins before the final review.
Don’t miss the opportunity to also get feedback from your employee. There may be roadblocks to their success that are hidden from your perspective.
- Collect feedback, measure early outputs, monitor performance.
- Both objective and subjective observations.
- The purpose of the monitoring stage is to establish how to best support an employee to meet their goals.
Develop – Coaching Skills and Checking In
Developing your employees means supporting them to do their best. The insight gained from monitoring should help provide direction into how you can best support an employee to meet their goals.
Regular check-ins, formal and not, will provide extra insight into where an employee may need support.
A maintenance landscaper, for example, could struggle using the mower in the first weeks. If left alone, they are likely to develop bad habits or be a safety concern to their coworkers down the road.
Instead, with monitoring, developing their skills with the mower would be mutually beneficial and better position them to meet their long term goals with you.
- Coach, train, manage or mentor.
- Informed by monitoring.
- The purpose of the developing stage is to actively support the employee to best achieve their goals.
Review – Acknowledging Efforts and Planning Improvements
Following what was decided during the planning stage, use these scheduled opportunities to review, rate and reward.
Periodic reviews will give you more opportunities to monitor and develop an employee’s potential. You are best to have multiple formal review stages throughout the cycle, not just the end.
Use reviews to formally address an employee’s performance relative to their goals. Team leaders should use all reviews as a chance to better understand their employee’s successes and limitations. It’s an opportunity for both sides to be accountable for the positive and the negative.
- Review, rate, reward.
- Review periodically in addition to the end of the cycle.
- The purpose of the review stage is to review progress; rate performance and reward successes.
Protip: Recognize their efforts!
The number one way to level-up your performance review cycle is to show appreciation. Every stage of the performance review cycle can be used to express appreciation and recognize efforts towards future goals and successes.
“79% of people who quit their jobs cite ‘lack of appreciation” as their reason for leaving” – Forbes
Imagine saving almost 80% of your turn-over by just saying “thank you”.
It’s never that easy, but this is one straightforward way to supercharge your employee brand, reduce turnover, and increase employee engagement.