To insure the success of your organization, it’s important to develop and maintain your resources. For example, computerization and automation are two areas that can have a profound impact on your company’s competitive advantage. Of no less importance is your human resources function. Improving this resource is as important as the technical improvements.
Performance management is the tool for engaging employees by linking their performance so that everyone is focused on the success of the business. Just like how technology can improve processes and efficiencies, performance management can help spur innovation and develop a problem-solving in your organization. But this quality is not inherent in everyone, so it needs to be developed and nurtured through objective evaluation, candid feedback, and recognition.
While hiring and training are important pieces to the performance formula, of no lesser importance is performance management which involves establishing performance standards. But how do you determine acceptable performance standards? There should be some statistical measures as well as qualitative standards, and all should be driven by the organization’s vision, profitability, and safety. From a qualitative standpoint, your mission or vision statement should form the basis of some of your performance standards. Policies based upon organizational goals and objectives should likewise be operationalized into qualitative or quantitative measures.
As a business, you should know production minimums that allows your company to break-even and become profitable. These production levels can then be operationalized into minimum performance goals for each employee. While these base-line levels are minimum levels of performance, these metrics would translate into only a rating of “Needs Improvement”. Performance beyond minimum levels would require a determination of the individual’s performance relative to that of the overall group of employees and their time on the job. Top performers would warrant an “Exceed Expectations” given their time in the job, while those who perform below performance averages or who do not meet performance minimums would rate “Needs Improvement”.
Let’s take tow-building as an example. Given their time in the job, a deckhand can either lay a fore & aft wire or they can’t. If they can’t, then they are “Below Expectations” on this particular task. Conversely, if they can lay a breast wire and a scissor wire given their time on the job, then they “Meet Expectations” on those aspects of tow-building. If most people learn to lay a breast wire at three months and the employee has learned to do it in two, their performance on this task is “Above Expectations”. As you go through each task, the employee’s overall level of performance emerges. Where you have more tasks where the employee is “Below Expectations” than “Meets Expectations”, then they overall rating for tow building is “Below Expectations”.
Regular Performance Feedback
Performance feedback needs to be a continuous and regular face-to-face dialogue. That way the employee knows what to expect when they are formally evaluated. The key to effective performance management system comes down to two words – “No surprises”. Regular feedback and coaching builds trust between the supervisor and the employee and strengthens the employee-manager relationship. Employees need to know that your coaching and feedback is constructive, designed to help them, not serve as a “gotcha!” It is something done regularly, but depending on the employee’s experience, may not be done as often as a new hire employee. But waiting until their performance appraisal to inform an employee that their performance is below expectations is unfair. Performance deficiencies should be addressed as soon as they occur, as should performance excellence.
How you coach is ultimately as important as how often you do it. It should be an interactive dialogue that focuses on areas of excellence as well as the areas of improvement. You should describe the behavior you have noticed (positive or negative) and wait for them to respond to your comment. Performance improvements should be collaborative, in that you want to enlist the help of the employee in improving in an area. If your providing positive or negative feedback, you should discuss your impressions and how their actions affected the department or the company. Selecting a suggestion for improvement should, if possible, include features of the employee’s suggestions or even adopting their plan if it would improve their performance – not solve the issue for them.
One of the biggest problems with evaluating performance is the subjectivity of the evaluator. I’ve heard some supervisors and managers comment that, “well, their level of performance is exceptional for them.” When you introduce this type of subjectivity into the evaluation process, you not only defeat all the research and performance benchmarking you’ve gone through, but you also open yourself up for charges of discrimination, disparate treatment, and other legal challenges. You’re better off not doing evaluations at all if your going to adopt this type of evaluation perspective. The problem with not doing them is all your other HR processes become subjective as well (i.e. promotions, pay increases, etc.). Further, if you must terminate someone for cause, it’s more difficult because you don’t have a key piece of documentation.
When you challenge these types of comments, often what you find is the employee’s performance is not “exceptional” at all, but rather marginal at best. The real problem in this case is the supervisor or manager. They may be unskilled or fearful of providing the necessary feedback to improve the employee’s performance, particularly if the feedback is believed to be received negatively. If fact, most employees appreciate constructive feedback because they want to improve so they can advance with the organization.
Performance management is a key pillar of your HR function. An effective performance management system can help identify an organization’s up and coming talent, clarify training needs, shape succession plans, and help make objective compensation and internal staffing decisions. This begins with benchmarking performance and operationalizing qualitative standards. While formal appraisals are part of the system, equally important is the regular feedback employees receive from their supervisor or manager. Candid, accurate coaching helps to continually develop your employee and ultimately your organization. This method of regular feedback and coaching will also help prevent unexpected performance feed back during the formal appraisal process.