There’s nothing more valuable to an employee than their company’s commitment to amazing performance management.
Not performance reviews… performance management. I’ll explain…?
- A review is a process that should happen once or twice a year. If an employee isn’t engaged by their manager regularly and with purpose, their review will be an incomplete picture of performance, which causes personal stress and creates toxicity in company culture. This is how a lot of companies have handled employee performance and I don’t know anyone who thinks it’s useful.
- Performance Management is a comprehensive approach to supporting team members' success all year round, incorporating reliable practices for addressing the highs and lows of employee performance in real time.?
Why does it matter so much to employees?? Because it has such high stakes: compensation and promotion, or the opposite. Reviews can become highly charged and must be well executed to keep from becoming dreaded practices that create a toxic atmosphere.
After a decade working with early-stage, high-growth companies, I’m sharing the five most important components of performance management that can scale.?
The 3 most basic components of a performance management plan are:?
- Role Expectations: Each person has clearly communicated, consistently up-to-date expectations that are aligned with company goals. They know how their work is contributing to the company’s success at any given time.??
- Committed Managers: They consistently engage employees, proactively have 1:1s, give feedback in real time, advocate for their team, follow through on process, and they’re skillful communicators.??
- Bespoke Review Process: Don’t default to a generic questionnaire. Work with someone who can help you get the most out of the review process while trying to optimize the ROI on time spent executing the process. There are very few platforms out there that are worth the money and those that are will require time and attention to implement.
The 2 elements that take your performance management plan from good to great:
- A clear business strategy: Everyone can probably agree that this is a logical first step for making any company a success, but it can be really difficult for early stage companies to execute on. At the end of the day, without this clarity, focus is a foregone conclusion, and people will not know what they’re supposed to be doing for long because what they do will probably change a lot. That does not enable anyone's success in the end.?
- Explicit company culture: Company culture can’t be artificially architected but it does need to be memorialized. Culture is heavily implicit - it’s organic, it’s felt, and it changes when strong enough forces enter the picture (aka the “wrong hires”, or the erosion of trust of leadership). Making the time to zoom out on your culture and articulate your visions, values, and norms not only improves hiring outcomes, it reduces the time that leaders and managers will spend on People issues day to day.?
There is so much to be gained by prioritizing performance management in a strategic, culturally aligned way. The earlier you start, the better it will be and the easier it will be to scale.
Want to explore a performance management plan for your company? Let’s talk.?
