Performance management of staff in your small business

If you manage a small business and have staff working for you, then you've probably already found that motivating and managing some people can be a huge challenge - and often quite frustrating.

Performance management cycle

However some of the problems that we might experience with staff performance are through our own making. As small business managers, we sometimes make too many assumptions that our staff understand our expectations and have the training to do what we want them to do.

The performance management cycle is a nice simple reminder of some of the important stages in staff performance management

1. Performance planning is about preparing the employee for the work you want them to do. It includes ensuring that right from the very beginning, a new employee has a clear understanding of the scope of their job and that you have clearly explained what is expected of them. It's also about ensuring that any new staff member receives adequate training necessary for using any systems or complying with procedures that are associated with performance of the duties in their job. Many managers unfortunately often neglect to invest enough time in this stage, because they assume that it's all too obvious ..... They forget it's only obvious because of the greater experience and familiarity they have with the various tasks in the workplace.  But performance planning can also refer to the weekly or even daily outcomes that you might set for your staff. Again, it is essential to ensure that any performance or work plan is reasonable (ie. achievable) - and that the employee has been equipped with the training, tools and resources needed to meet the performance expectations.
2. Performance tracking is about keeping an eye of the progress of the employee - and checking that things are getting done properly. Monitoring and occasionally observing, yet without being intrusive nor seen as too distrusting. With a new employee we will need to be checking on the quality and timeliness of their work more frequently than say an experienced staff member, because we should be able to feel more confident in  our senior employees.
3. Performance feedback is about providing the employee with recognition for good work and showing them that their efforts are being noticed. Sometimes constructive feedback may need to be provided however, if there are job requirements that are not being quite met. This might be a reminder that they need to take care with a particular procedure, or a reminder about what time they need to be back from lunch, or a reminder to take more care when filling out a form....... Sometimes people make mistakes - hey, we're all human. The important thing is that we help the employee learn from it, so that it's not repeated.
4. Formal performance review is sitting down with the employee on a quarterly basis, over a coffee, and having a conversation about their performance - what's been going well and whether there may be areas that could be improved. There are many businesses that incorporate some documentation around this, particularly for the more comprehensive annual review. The annual review will assess employee performance on each of their key responsibilities and identify whether these have been performed to a competent or acceptable standard. The annual review can also include a conversation about the employee's longer term career development aspirations. Although a small business may have some limitations upon progression opportunities for their staff, it is never-the-less useful for their manager to be aware of staff ambitions. This is because there can sometimes be opportunity to enrich the employee's current job and possibly provide them with more of the challenge they may be seeking. But in doing so, you need to also ensure that your employees are being fairly rewarded for good work

In a positive sense, an effective performance management process will help to ensure open lines of communication between a manager and their employees - thereby avoiding confusion and preventing misunderstandings about what is expected.

In the worst case scenario, a formal performance management process maintains an audit trail in the event that an employee is performing unsatisfactorily and may need to be dismissed. There will be some written record that a manager has previously raised performance concerns with the employee and made reasonable attempts to secure performance improvement

Keeping good staff

No doubt you want to keep your good staff ..... They show initiative, they're reliable and they're capable. Right? ...... You've come to rely upon them and trust them. So just be careful that you don't take them for granted. Show them that you appreciate their efforts - and make sure that they are being duly rewarded.

Why do staff resign? ...... Surveys show the most common reasons include a poor relationship with their immediate manager, poor working conditions, conflict within the team, lack of job satisfaction with their actual work (no longer challenging) and finding a similar job that requires less travel or offers much higher wages. Although people say their salary is important, in influencing their levels of job satisfaction, many people say they place higher importance upon the quality of their working relationships, the opportunity for learning and growth - and also whether they find their work "meaningful".

Effective performance management will help you to both retain good staff, as well help you to identify staff that simply might not be a good "fit" for your business.

Also have a look at Management Skills Development for further suggestions and ideas on how to manage and motivate the performance of your staff.

About the author

Brian Carroll is the founder of a corporate training and leadership development company, Performance Development, based in Melbourne, Australia.  He is a qualified psychologist, experienced management coach and an engaging presenter, with a passion for helping people achieve their full potential