Performance management (PM) is usually seen as the domain of corporates, not small business. In a small company where the owner and staff usually work side by side, formal performance reviews seem redundant and/or just another irritating administrative task for the manager to tick off.
PM has gained a bad rap in corporate circles because it is often associated with the annual salary review – always a touchy subject! This is unfortunate, because when it is seen as being a system to help staff to achieve their goals, which should always be aligned to the business’ goals, then it can be a powerful tool to reduce costs, increase revenue, or to improve employee engagement.
The benefit for small business managers is that the small team allows the manager to see and experience first-hand, the real culture of the organisation, as well as the individual’s strengths and weaknesses. By implementing a formalised system, the manager becomes more mindful of the standards and behaviours s/he is expecting and this allows for more meaningful feedback beyond throw away comments such as: ‘good work’ or ‘get a move on!’.
Taking time out to really evaluate performance and the possible gaps also requires the manager to consider the business’ goals and the business’ performance. Customer service feedback is as important here as the numbers. It is very easy to be swept up in the daily struggles of the business and a year can go by without a conscious health check.
Managers tend to avoid formal feedback because it’s uncomfortable, especially when having to speak to a low performer. Shying away from these discussions is, however, counter-productive. The norm is either to roll your eyes and do it yourself or to get into a destructive cycle of irritation and criticism. This simply results in stress medication for you and the employee concerned, as well as s/he becoming more demotivated and disengaged. To perform according to standard, people need to know what is required and their performance needs to be measured against that standard over a reasonable period of time.
When both the manager and employee have consciously discussed goals and standards and both parties are regularly monitoring performance against those standards, then it is far easier to be specific about employee strengths and weaknesses. (I use the word weakness deliberately, although it is not politically correct. An athlete knows that his Achilles heel is weak and he stretches and strengthens accordingly. If an employee is not performing at the required level, she needs to acknowledge that, learn new skills and change her behaviour in order to close the gap.)
It is important that the focus is not only or largely on the gaps, but also on what is above standard. The aim of PM always has to be improvement and motivation. If what is being done well is not noticed, then where is the motivation to keep on doing it? Consciously looking for talents and strengths may also lead to better resource utilisation. Sipho is better at handling customers and Sally has a better attention to detail and accounts.
A simple, yet effective formula for giving feedback is the feedback sandwich: Begin with the positive, ‘feel good’ feedback, just like a fresh, soft slice of bread. Sometimes you may have to look hard but there is nearly always something positive – if not, you really do need to review your recruitment strategy! Then move to the meatier issues of where there is a gap. The garnish is the ‘proof’ both quantifiable (e.g. error reports) and anecdotal (e.g. customer comments) which allows the manager to describe the impact of this gap. Finally, close the sandwich with agreements on the way forward – learning, training, better equipment, management coaching etc. It is important that during the discussion, the employee feels that s/he has a voice.
To stretch the metaphor, the sandwich needs to be a manageable size. If it is over-stuffed i.e. too many issues are being addressed at one time, then it becomes difficult to handle and overwhelming. Be clear about the real gaps in performance, those that impact the bottom line or the team morale and leave the small stuff for another day.
For PM to be effective, measurement and reviews need to be done regularly and consistently. Whether it is monthly or quarterly really is dependent on the nature of the business, the level of employee and the type of work. I would submit that it is hard to over-communicate in the work space.
Set clear goals and standards, in line with business goals
Measure performance against those standards
Agree on the way forward
Author: Janet Askew