The importance of Performance Management

“Lack of feedback is the number one reason for performance problems.” Leigh Branham, Author

As we approach the end of the financial year for companies whose financial year is October 1 to September 30, I pause from the series “Walk awhile in my shoes” to address the subject of performance management. For companies that recognize the link between effective performance management and their bottom-line, managers and employees are preparing for a formal performance review.

Before an employee’s performance is evaluated it should be managed. Unfortunately, performance management is not something that most managers do well. Giving employees feedback is sometimes as uncomfortable for managers to do as it is for employees to receive.

“Performance management is how an organization identifies, measures, and develops the workplace performance of each employee, team, and department in support of the overall business goals and objectives. It is done through the continuous feedback and communication between managers and their employees to achieve the strategic objectives of the organization.”

One of the common statements managers often make is “long ago we weren’t hearing anything about employee engagement or disengagement. People showed up, did what they were told, received they pay and they were happy. These days, employees are too demanding.”

Times have changed. Employees are no longer satisfied with just a pay cheque. They are demanding ‘attention’ and for each employee ‘attention’ may mean something different.

Ineffective performance management leads to host of problems within the organization. When employees feel they are not valued for their contribution to the organization, or they are not being heard, it leads to a drop in their morale, they may start feeling resentment towards management, this may eventually lead to frustration and high voluntary turnover. The saying that employees do not leave companies they leave managers is true.

Ineffective performance management also contributes to a toxic work environment which leads to lack of enthusiasm and disengagement. A disengaged employee cannot be trusted to provide excellent customer service. Poor customer service is one of the biggest contributors for loss of customers, loss of customers affects the profitability of a company and, when persists, it results in an intervention by board of directors or shareholders and in most cases, the reorganization of companies and loss of jobs.

On the other hand, when employees’ performance is managed well, it has a positive impact on an organization. It facilitates talent assessment and the succession planning process. It assists with the development of strategies for employees and organization growth and contribute to employee retention.

Effective performance management helps to mitigate employees’ negative perceptions of managers. In many cases, employees’ perception of the role of managers does not match the reality. Managers are perceived as overseers and critics but in reality, their role is to provide help, support and guidance to their direct reports; to ensure that employees have the tools and equipment needed to efficiently carry out their tasks; to ensure that there is a balance between employees’ quality of work and quantity of work; that there is consistency between managers words and actions and consistency in how employees are treated across the board. Managers, are also responsible for delegating, challenging and actively listening to their employees.

In an article by Delighted by Qualtrics titled “Employee feedback examples with 10 strategies for giving and receiving feedback,” it states that “feedback has a positive impact on the bottom line. Companies that give continuous employee feedback can reduce their turnover by almost
15%. It boosts employee engagement. The numbers don’t lie: 98% of employees fail to be engaged when managers give little or no feedback.” When providing feedback, it is important to remember not to judge. When commending your direct reports, use the word ‘you’, for example, “You did great work on the project yesterday.” “You are exhibiting a level of maturity and growth that makes me proud to be your supervisor.” However, when reprimanding, to avoid employees going on the defensive, remember to use the word ‘I’, after all, you are sharing your opinion, for example, “I feel like you are not showing the same enthusiasm as when you just joined the team.” “I feel like you may be lacking focus and as a result the quality of work you produce is affected.”

While the formal performance evaluation is done annual, performance management is a continuous process that should be done all year round and is necessary to facilitate a fair performance evaluation.

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