I’ve thought long and hard but I just can’t think of a large, successful company that does not implement performance management. Famously, Jack Welch, CEO of GE, was a huge advocate of it. The reason is probably fairly obvious. Performance management helps businesses achieve results. How so? By ensuring that all employees are performing at their best and pushing in the same direction.
So why don’t start-ups embrace performance management? Typically, there are a number of perceived barriers and questions small businesses have about how it’s done. How do you set up the process? Do you need an expensive system to manage it? Is it too much effort for the ROI (return on investment) in the end?
Don’t worry start-ups – there are only five key steps for implementing performance management that you need to keep in mind when getting started!
1. Set company objectives.
Invest time to think through exactly what you want to achieve in your business, and what the timeline on that looks like. Consider how to convert that long-term strategy into annual tactics and even quarterly objectives. This will enable you to be specific about what you require from each person or team for any given timescale. It also provides the framework for being able to track how you are progressing, as a business, against your long-term strategy.
2. Establish a dialogue.
When your company objectives are clear, you need to communicate this to everyone on your staff. Whenever you implement something new, there’s the likelihood that people will feel hesitant. Introducing performance management is ultimately in a brand’s best interest, but it may not seem so at first.
That’s why it’s so important that you’re able to be open and honest with your team. If you’re not already speaking to each person for at least an hour every couple of weeks, then you need to start doing so. Use this time to understand what it is that drives each person. Creating an environment where you can speak in a genuinely open and supportive way will ensure that the next step is straightforward.
3. Put targets and goals into place.
Having discovered what your team’s goals are, it’s time to figure out how people can set out to achieve them. This can be accomplished through the setting of targets, and, specifically, SMARTER ones (i.e those that are Specific, Measurable, Attainable, Realistic, Time-bound, Evaluated and Re-Evaluated).
Set aside a few hours with each person. Start the session by letting them know upfront that the objective of performance management is to help people to be the best they can be at their job and that by working in a fairly scheduled, planned out way, the company will be much more successful which ultimately works to make them successful too.
Outline what the company’s long-term strategy is, what the tactics are for that year and how that’s broken down into quarterly company objectives. This gives people the necessary context in which to discuss their own objectives. It ensures they will understand how their own work is linked to the company’s plans.
Establish regular formal reviews with your team to discuss how they are progressing with their targets. This will give you an opportunity to praise great work, provide ideas or suggestions on anything that seems unclear, and to encourage anyone who needs extra motivation.
When you reach the end of the year, you should find that your employees have achieved great things and feel good about the process. The business will have taken an important step to achieving its long-term strategy. But don’t use this as a chance to sit back and take no further action. Performance management is an ongoing process and it needs to be regularly implemented and reviewed in order to ensure long-term success.
Performance management isn’t just for big, established businesses. When implemented well by a start-up, it can help deliver the same successes that a big firm would be proud to have. Don’t avoid it – embrace it!
Heather Foley is a consultant at etsplc.com, a UK-based consultancy company.