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Best Practices

Best Practices in Performance Management

By Deb McClanahan, BroadBandHR Consulting

This article may be useful to any organization in any functional area or industry — the basic principles spelled out here were developed over a long practice across many industries and types of organizations for any type of position, from executive to individual contributor. A sound Performance Management process can move your organization forward in ways that you could never have predicted.

Structure of Review

It is critical to structure your Performance Management process with some basic best practices. Structural issues to consider include:

  • Who is reviewed? Does the same basic process apply to all?
  • What is the frequency of review?
  • 7-10 key elements constitute most positions
  • Is there a set of basic standards for all with additions for each position?
  • Are employees compared to a standard or to each other?
  • How do employees input information about their own assessment of performance?
  • Is there a mechanism to resolve employee concerns/disagreements on performance reviews?
  • How does your industry typically assess employee performance?

We favor a 3 part structure that begins with employee self-assessment, followed by a manager developed review body, and completed with a jointly developed improvement and professional development plan.

Review Process

The best employee review processes have several different activities involved — the key point is to facilitate active and open discussion of how the employee is actually doing on the job. Many organizations start the process with input from the employee — giving the employee the first opportunity to catalogue their own results and achievements for the period is a best practice.

The manager takes the employee input under advisement — he may choose to agree, disagree, or some combination thereof. The employee input may highlight performance areas that are in need of development or differences in priorities that are important in the discussion.

Who Reviews?

It is important to have the right person perform the assessment and to establish a review process for those assessments. The manager may have the final say on the overall rating, but having each performance review approved or at least looked at before the performance discussion is important to eliminate any bias and to ensure consistency. Often in larger organizations, HR assists in this process with either groups or individuals. It is also common that a second level supervisor reads appraisal before it is final. Each organization has a slightly different process for completing this process. Some organizations choose to compile individual reviews into a group ranking of similar positions. These decisions should be made at the start of the process, and not changed unless there are extenuating circumstances. Your HR Consultant can lead you to designing a performance review process that is right for your organization.

Set a Timeline for the Process

It is helpful to organize your Performance Management process in a way that fits the organization. For small companies, it is sometimes appropriate to do a focal process, where all reviews are done within a compressed time frame. For other organizations, an anniversary process spreads the reviews throughout the year based on each individual's anniversary date. Be sure to consult with an HR Professional on this decision — they can help you with which scheme will be most beneficial for you.

They can also propose various time frames for how often employees are reviewed. Some organizations decide that giving feedback more often than once a year fits them to a "T". Quick but thorough reviews every quarter allow organizations to compile the four reviews into a complete annual process. Constructing a process which provides maximum accountability and clear 2-way performance communication is part art and part science, and your HR Professional or outside consultant can provide great value by ensuring that your timeline is well-constructed.

Communicate, Communicate, Communicate

Use standard language to communicate around your review process. If you want to link to your pay increase cycle, use the "Pay for Performance" terminology in your communications.

The purpose of a review system is to communicate with employees how they are doing. The best process in the world will fail if the communication is not heard by the employee. Many companies spend way too much time on the type of form that they use — it is far more important to ensure that accurate and timely communication happens between employee and manager.

Use a Process Appropriate to the Position

There are basic company principles and behaviors that you want all employees to exude and perform at all times — these are the elements that make your company what it is, and make it the kind of place where people want to work. Whether it is a strong commitment to customer service or exact production of each work product, ensure that your performance review encompasses these general factors as well as the specifics of a given role.

These factors may differ by level, based on the impact and scope of the individual's job. Expectations differ for executives and for non-exempt employees. Ensure that your process accommodates these level and scope differences.

Close the Deal

Whether you use an HR Consultant or an internal HR person, it is appropriate to have a review of the reviews. Ensure that employees have a clear mechanism to resolve issues with their reviews. This will go a long way to avoiding other employee relations problems as well.

It is impossible for all reviews to be purely objective — the goal to have as much objective data as possible included, but reviews are done by human beings so some subjectivity is impossible to avoid. Training managers on how to perform assessments is the best way to minimize subjectivity and make sure that the right stuff is included in each performance review. Many companies use a ratings and rankings or consensus review to minimize subjectivity and ensure that reviewers use the same lens on performance.

Summary

Best practices in managing employee performance for your organization will improve your success rate in retaining critical employees, attracting the right new employees because your process is sound, and improve the bench strength of your organization overall. A sound performance assessment process also yields additional ROI by developing poorer performers into better employees and enhancing the performance of good employees to even higher levels of achievement. This can make the difference for the success of your organization. Contact BroadBand HR Consulting today to design a new system for you or to upgrade your existing Performance Management Process.

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