When you’re in startup mode, it’s easy to put all your focus on the fundamentals of getting your product or service to market. You’re concentrating on so many things, including market research, financing, marketing, and of course sales. In the early days, employee performance management can seem like administrative overhead; something you don’t need to even think about until your business is larger and well established. What this thinking doesn’t consider is that, ultimately, your employees are your only true, sustainable competitive advantage. You need solid people management practices, right from the start, to ensure you get the most from this strategic asset.
There are 3 basic performance management practices every company should address, regardless of their size. These fundamental practices are key to the growth and success of both your business and your staff:
1. Setting, aligning and managing employee goals
2. Giving employees feedback on their performance
3. Providing employee with development that’s linked to their performance and goals
Setting, Aligning and Managing Goals
To stay on track, everyone needs goals. You need to start each year by setting organizational goals, and communicating these to all your staff. Then you need to give every employee individual goals that are connected to your higher level organizational goals. This sets clear expectations for everyone, and gives them a context for how their work will contribute to the company achieving success.
It’s a good idea to periodically review everyone’s progress on goals (individual and organizational) and communicate the status of goals to make sure everyone is on track. Business and priorities can change throughout the year, so it is also a good idea to regularly review both organizational and employee goals to ensure they are still realistic and relevant. Formalizing this process is a great way to communicate company values and priorities, and ensure everyone is working collaboratively towards the same objectives.
Giving Employees Feedback on Their Performance
Giving employees regular feedback on their performance is important to everyone’s success. While you should be doing this informally, on an ongoing basis, it’s also important to setup a formal session for giving feedback at least once a year. Having a formal session will give this activity the weight and value it deserves. Ideally, you should evaluate each employee’s performance of both their goals and the competencies important to their role and the company. (Competencies are “how” you do your work; some companies call them behaviors, skills or values.) Giving employees regular feedback a vital way to manage employee performance, and identify, document and address any performance issues early on.
Providing Employees with Development Opportunities
Finally, it’s important that your employees have an opportunity to develop and expand their knowledge and skills. Start by looking at each employee’s performance, and identify strengths and areas for improvement. Consider the employee’s goals as well as your company’s when you do this. You should also reflect on the competencies that are vital to their success and the success of your company. For example, if customer service is an important company differentiator, you’d want to make sure all your employees have strong skills in a competency like “customer focus” or “listening skills”.
Wherever you identify a skill gap, make sure you assign your employees some form of training to help improve or expand their abilities and expertise. There are lots of formal and informal ways you can support employee development that are very cost effective. You can sign them up for a 1 or 2 day course, or some online training. But they can also learn from books/general reading, job shadowing, mentoring, etc. Providing employees with development helps increase their value to your organization and demonstrates your commitment to them; both of these drive up employee engagement. And that’s never a bad thing.
Instilling these foundational performances management practices in your company, right from the start helps your business get off on the right foot. It sets you, your company and your employees up for success.
About the Author: Sean Conrad is a Certified Human Capital Strategist and Senior Product Analyst at Halogen Software. He’s passionate about helping companies of all sizes improve their employee performance management practices. For more of his insights, read his posts on the Halogen blog.