Four steps to target your employees' pain points.
Plus: Build upon strengths & weaknesses using these performance management systems.
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Performance management systems: what they are, their benefits, and how to spot your employees’ strengths and weaknesses.
It seems like every business success story contains different milestones and actions that founders took to get where they are.
Solving the problem a group was having. Building the first prototype. Raising money in a seed funding round. Selling their first product/software.
Yes, all of those things will help you succeed, but someone needs to do the actual job for those things to happen. That’s where your employees come in.
People are the center of every business. Your employees can determine your success or failure, and as a founder or small business owner, you need to hire and develop the right people to help you succeed. To do so, you need to have a performance management system in place.
Performance management is more than just assessing an employee’s performance at work. It’s also a way to build an ecosystem in which conditions are optimal for employees to perform at their best.
A former manager used to tell me that managing talent is like scouting a soccer team. You’ll need to find the right goalkeeper, the right defense, and the right attacker to make goals, and you have to place them in the right positions. You may have the world’s best goalkeeper on your team, but if you place them as an attacker then they probably won’t be living up to their true potential.
According to The Balance Careers, a good performance management system should plan the end-to-end talent attraction, recruitment, and retention of your organization. It starts with clear job descriptions and ends with exit interviews.
Investopedia summarizes it this way: “Performance management establishes concrete rules. Everyone has a clearer understanding of the expectations. When expectations are clear, the workplace is less stressful.”
Benefits of managing performance:
I was nineteen years old when I started my internship at Procter and Gamble. Before I joined, I thought goals were just a measure of whether I did good or bad. I was about to learn how much more sophisticated it could get.
My first project was planning the event to celebrate the end of the fiscal year where the general manager and department leaders shared the previous FY results. To me all of their slides looked the same; they contained a scorecard with the name of each department. Goals were on the left side of the screen, and the results were on the right.
All departments were evaluated under the same global goals. I couldn’t understand a thing about revenue or market growth, but the thing that became crystal clear to me was that everyone worked in the same direction to achieve macro-level goals. I found this to be fascinating. I came from a company where the only performance management system was publicly announcing whether you did a good or a bad job. Having globally synchronized goals was unimaginable to me.
Eventually, I started seeing the interconnectedness in how P&G managed their people. The global leadership team would come up with a certain number of goals that fit into five big buckets. Then, those goals would start to be untangled by regions, countries, departments, directors, senior managers, mid-level managers, junior managers, technical employees and interns.
Everything you did had to be linked to either a global, regional, or local priority. If not, you probably shouldn’t be spending time on that task.
It took me a lot of time to process how that chain worked, and while it sometimes felt bureaucratic, it had many benefits. Here are the three I found most impactful.
Morale boosts. Having clear goals and making your employees feel like their job is meaningful for the company to succeed, can allow them to feel the need to be better and feel way more committed to doing their job.
Clear career paths. These types of systems assure promotions, new responsibilities, or career changes. They’re not trivial. They allow employees to know what’s expected from them to get to the next level and employees also trust their own career plans.
Increases employee retention. Since a huge part of these types of systems is having a culture that promotes feedback, a study by the HR Daily Advisor explains that “simply giving more continuous strength-based feedback, companies can reduce turnover by 14.9%.”
Having a system devoted to your employees’ development builds an environment within your organization that’s meant for growth. Many lasting benefits can be attributed to this practice, but the one benefit I cannot stress enough is the fact that making your employees feel valued and pushing them out of their comfort zone will inevitably result in a win-win situation.
Performance management systems are a two-way street. You can empower your employees to become the best professional versions of themselves and to help your company profit, but you also need to have a compensation system that accompanies those achievements.
Systems, systems, systems. What happened to the old “I know who’s a good and a bad employee?”
There’s a difference between performance evaluations and using your “gut” to tell whether someone is a “high” or “low” performer—because all performance appraisals are inevitably biased.
According to the website, Neuroleadership.com, “The traditional review structure assumes that leaders who have tracked an employee’s behavior over a certain period of time are the best authorities to judge whether the employee has missed, achieved, or surpassed his or her goals. This assumption itself is biased.”
Perceiving is a highly subjective process, and we all perceive different things and in different ways. Therefore, neglecting to evaluate performance against results will inevitably lead to a biased perception of your employee.
For example, let’s say being on time is extremely important to you. You have a strong employee that never misses a deadline and provides quality work but was late two days in the past week. It’s common to mix those feelings up, mentally replacing “being late” with “they’re not that great.”
It could happen the other way around. You could have an employee that’s great with people, knows how to sell themselves—everyone loves them—and is always on time. But when you see their results, it turns out they’re not meeting expectations.
Going with your gut is not enough, neither for you nor your employees.
But I get it, maybe you don’t think you have time, or it’s clear who your company’s rockstars are. I’ll help you outline a process.
How to spot your employees’ strengths and weaknesses and develop them without a system.
Sometimes business can be too overwhelming, and that leaves you with no time to work on systems. That doesn’t mean you’re not interested in your employees. It just means the business side is taking over all of your time.
However, here’s a list of easy things you can do to discover what your employees excel at and what needs to be improved.
Hire the right people. This might sound obvious, but when you hire the right people for you and your business, performance management becomes way easier. (Remember the soccer team example.)
Set clear expectations through 1:1 communication. Then, review your employee’s work based on the guidelines discussed. It doesn’t need to be too bureaucratic, but it’ll help you both understand where you stand.
Take mental note of the things they excel at and struggle with. For example, if your employee is great at analyzing data, assign them tasks with that in mind, and ask them to go deeper into the analysis. If they’re not great at documenting their work, clarify why documentation is necessary and walk them through what you need.
Give constant feedback. Tell them when you like their work and when you think something is not ready yet. Neither a promotion nor a layoff should come as a surprise.
Having a business is much more than selling your product or service. It’s also about taking care of your employees and fostering the win-win scenario I mentioned above. Evaluating them upon results is a way of demonstrating that you care.
In case this issue convinced you and you want to implement a performance management system in your business, keep an eye out for the next issue. I'll explain everything with the help of people who have implemented them in their businesses.
Thanks for reading.
Edited by: Lauren Maslen.
My Fixation on Time Management Almost Broke Me. - We are taught to believe that being productive means having objective time management, but that fixation hurt Abby J. Shipp. In this article from Harvard Business Review, Shipp shares her experience and explains what we all can do to be productive while taking care of ourselves.
Focus vs Coordination.- Teams need to be focused to be productive, but that’s not all they need. Coordination is also a key part of team management, as author Cam Hashemi explains, “Teams without focus are unproductive, while teams without coordination are counterproductive.” In this article, he explains how to find a balance between the two.
A simple and dynamic method for consistent productivity. - Productivity can often be linked to deadlines and how you feel about your pending tasks. But you cannot wait for those things to align to start working. That’s why Matthew Saltz shares the system that he uses to maintain his levels of productivity.
The psychology of revenge bedtime procrastination. - It’s been scientifically proven that the amount of hours we sleep directly affects our performance. But sometimes, we tend to reduce rest time to get more things done. This article explains why that happens and how to work on it. You might discover you suffer from bedtime procrastination
Mendi is a brain training device designed for personal and home use. It contains a headset and an app for you to track progress and train your brain for mental wellbeing, better performance, and overall health. Read a review here.
Dickie always has great advice. Sometimes it’s not about doing the actual work. It’s about taking the time to understand why you’re doing it. Strategy before tactics.
IN CASE YOU MISSED IT
Is there a bully at work? Here’s how to deal with them. - Workplace bullies are as clever as they are cruel. They can be so sneaky that you might end up believing you’re the only one they’re targeting. However, you don’t need to feel scared to go to work. Read what the types of work bullies are and how to deal with them in the link above.
The world’s worst boss - Seth Godin believes that the worst manager ever is each one of us. We are responsible for managing our own careers and working on our personal development. If we treat ourselves as “dumb” every time we make mistakes, or if we don’t put time into own development, then we’re bad bosses.
Ultralearner Scott H. Young teaches us how to get out of our own way to become better learners. - Scott H. Young is an author who has devoted himself to the study of how we learn. He wrote a book called Ultralearning where he shared different immersive learning experiences and gave a bunch of advice for creators, fathers, and planners in our newsletter’s previous issue.
I could see frost on my boots at 5 a.m. on this August morning. Opening my tent revealed a rocky landscape reminiscent of an asteroid scene in the movie Armageddon. In the last five days we had hiked 70 miles, and this morning, our final push was to the tallest peak in the lower 48 states.
We were waking up the western side of Mount Whitney, locally called Too-man-i-goo-yah in Paiute, or “the very old man.” Located in California’s Sierra Nevada, Mount Whitney reaches an elevation of 14,495 feet and sits merely 90 miles north of Death Valley, the lowest point in the US. A stark contrast to the snow-capped peaks of Whitney, Death Valley’s desert floors bottom out at 282 feet below sea level.
Whitney and Death Valley differ in more than elevation, however. Whitney’s summer temperature can range from the low 30s to the high 90s F, depending on elevation, while Death Valley has been measured as the hottest place on earth at 134 degrees F. Death Valley also rakes in 586,666 visitors annually while Whitney only sees 7,666 visitors. Still, one death per year is the average at both locations, meaning that two very different levels of preparation are needed to visit.
I haven’t been more satisfied with myself than looking out from the Mount Whitney Summit Shelter towards the desert valley below. It had taken us months to get a permit from the National Park Service to enter the Inyo National Forest and months more to prepare for the hike. While it is an accessible hike, people do die on Whitney from falls and the cold. So if you decide to go, prepare by physically training in advance, getting the right equipment and hiking to your skill level. And don’t forget to check that the trail is free from ice and snow, which can be found even in July & August.
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