Please note that this is a guest post by Beth Garvey.

“One important aspect of business that many entrepreneurs tend to neglect is employee performance management. We get so busy with financing, marketing, sales, market research etc. But if we truly believe that our people are our most important asset, we need to put HR processes and tools in place to make sure we give them the feedback, development and validation they need to excel. This is true whether you have 2 or 2000 employees.

Regardless of your size, I think you need to have the following three basic elements in place:
•    Aligned Organizational Goals
•    Regular, Formalized Feedback
•    Performance Based Employee Development

Without these, you’re just not able to maximize your ‘human resources’.

To start with, your organization needs to have clearly articulated goals. These goals need to be communicated to everyone in the organization. Your entire staff should then establish individual goals that align with these organizational goals. This is how you’re going to make things happen. If you don’t follow this process, and have management visibility to everyone’s goals and their progress towards achieving them, how will your organization ever succeed? It’s not enough to hope everyone knows the organization’s goals and is contributing towards them. We need to formalize goal setting and monitor alignment and progress.

The second vital performance management practice is giving employees ongoing, but formalized feedback. Yes you need daily feedback and coaching. But formalized feedback is something different. It’s stepping back and evaluating an employee’s performance of critical competencies and goals. It’s as much about the “how” as the “what”. Formal feedback helps both the employees and the organization know who’s performing, who needs development and who’s not a right fit.

The third vital practice is performance-based development. For every employee, you need to identify areas that need development, based on existing performance, invest in appropriate training and development activities, and then monitor improvements in performance to be sure their effective. This is how everyone improves and succeeds.”

A lot of entrepreneurs neglect these vital performance management functions because they can be very time consuming and require some skill. But that shouldn’t be a barrier. There are lots of great, affordable performance management applications available that automate the whole process for you, and even give you tools that make it easier to align goals, write feedback and choose development activities. Halogen Software is one of the leading providers, but there are others out there as well.

Are your employee getting the feedback, development and validation they need?