The yearly review seems to be on its way out as companies opt for more progressive approaches to measuring employee performance. Many rely on specialized software solutions.
Traditionally, evaluation of employees’ work performance has been implemented as yearly performance reviews. With this large interval, it took less time and allowed to get a rough idea about team’s and individual employees’ performance. However, over time, it turned out that as a yearly event, this form of performance reviews created more problems than solved:
- It doesn’t allow to take improvement steps immediately;
- It doesn’t provide managers with vital details about employees’ performance dynamics and influencing factors;
- It creates awkwardness and discomfort for both managers and employees.
Not surprisingly, this practice, widely disliked and unwelcomed, is being increasingly replaced with more efficient and comfortable methods. Ongoing performance measurement is used instead of scheduled reviews at certain intervals as a more informative assessment method than the traditional review practice.
Make it a part of your team’s work routine
It’s been easy with predefined yearly intervals, but an ongoing performance evaluation process needs a more detailed schedule and requires more organizational effort. Integrating it into work routine processes (and planning certain time for it!) is key to an efficient performance measurement.
As an ongoing process, performance evaluation should be performed on the regular basis. The most reasonable approach is setting goals and realistic deadlines for achieving them, and monitoring team members’ progress – weekly, bi-weekly, monthly etc., depending on your goals, plans, and severity of problems you’re intending to solve.
If it’s an individual performance improvement plan, the common approach is organizing weekly check-ins. For plans that involve the entire team, it’s worth having more frequent (weekly or bi-weekly) conversations with individual team members and less frequent (e.g. monthly) meetings to review achieved results, collect feedback, and see what needs to be corrected or can be improved.
Use KPIs to evaluate team and individual performance
In knowledge-based activities, performance evaluation process is particularly hard to organize and follow. The main question is, what needs to be tracked and how informative it is in terms of performance. What helps here is getting value out of measurable parameters.
Key performance indexes (KPIs) are an efficient way to approach performance measurement. Of course, specific set of indexes to keep track of and analyze depends on your goals, problems and the nature of your team’s work, but there are basic parameters that work for monitoring performance of virtually any team.
- Quantifiable work process goals. Complying with planned numbers to achieve within work process, such as orders to be processed, items to be manufactured, or packages to be shipped can work as a basis for team performance evaluation. The same works for deadlines and milestones to be reached.
- Productivity. Productivity tends to be a really vague concept in knowledge industries, so quantifying and measuring it is not an easy task. However, there are approaches that help evaluate it, observe its dynamics, and adjust the environment to make it more productive.
- Use of billable hours. The data on how efficiently billable hours are used can also be a basis for team performance evaluation. It also helps identify workflow organization flaws and eliminate them to increase performance.
- Customer satisfaction. For customer-facing positions, taking into account customer satisfaction is one of key elements of performance management. Surveys, questionnaires and any forms of customer feedback – both general and related to individual team members – can indicate performance levels and dynamics.
- Employee attendance. Attendance data is not used directly for evaluating performance, but it reveals possible problems with team’s productivity, environment, and proportion between planned and actual resources.
- Employee satisfaction. This index is usually measured as an additional parameter in overall performance assessment. Its value mostly consists in the ability to evaluate work environment and its effect on performance: high levels of employee happiness usually increase performance indicators.
Make use of all available tools
Initial data are necessary for measuring any of the performance parameters. The more data you use in performance measurement process, the more informed decisions you make. HR, team and project managers have various sources of this data at hand – let’s take a look at them.
- Raw attendance and productivity data. Most HR solutions, project management, work management, and timekeeping tools allow to collect the data on team members’ attendance and work time usage. Most of them have inbuilt tools and modules for tracking various parameters of employees’ performance. Collecting statistics and organizing them in a convenient way to show key indexes. Running reports on specific parameters and comparing them over time.
- Documented goals & key deliverables. Not complying with numeric goals, missing deadlines, and not hitting milestones directly indicates performance issues within the team. You might need additional sources of information to figure out how to handle them, but comparing planned and actually achieved results s key for identifying problematic performance aspects.
- Feedback in any form. This data source is vital for finding out why problems appear. There are various ways to collect feedback from the employees: meetings, questionnaires, one-on-one conversations, etc. If customer satisfaction measurement is a part of your performance evaluation process, make sure to use their reviews, implement surveys, or collect customers’ opinions and suggestions in any way that would fit into your data analysis process.
Take performance improvement steps
Performance ebbs and flows are not uncommon for employees in various fields and positions. Even top performers can become unproductive under certain circumstances – performance is influenced by many factors, and managers’ primary task is monitoring it, proactively preventing negative factors, and handling performance issues that have already appeared.
What a manager can do to improve productivity of a team member, prevent team performance decrease, and handle potential issues?
- Have a direct conversation with the employee. It’s the easiest way to figure out why performance has decreased and what can be done to create an environment where it can reach acceptable levels.
- Suggest steps to eliminate or at least reduce factors that affect performance. Too high workloads, unclear requirements, hostile environment within the team, family issues – anything that causes performance decrease can and needs to be handled. Find ways to manage it, and develop steps for the employee to take in order to stay productive.
- Create a long-term plan. Based on identified problems and possible steps, develop a plan that consists of goals and steps to achieve them. It’s not necessary a performance improvement plan: for employees who tend to get overextended, a vacation can be a reasonable way to manage performance issues in the long term.
- Regularly check in with the employee on the progress. Monitor how their performance is improving, see what can be corrected, and adjust the plan as necessary.
Avoid common mistakes
Like any complex process that involves analysis of data from various sources, decision making and ongoing corrections, performance measurement and evaluation is subject to a wide variety of mistakes. While it’s hardly possible to create a perfect plan right from the start, there are some common things to avoid in this process. So here’s a list of mistakes you want to be aware of, and ways to avoid them:
- Being unclear about goals and expected results. Make sure performance goals and timelines are clearly described, documented, and carefully planned. Following an existing plan is the shortest way to achieve the desired outcome.
- Not using measurable values. Measurable means actionable, so make sure your plan includes numeric parameters, specific deadlines, and detailed schedules.
- Setting unrealistic expectations. The concept of realistic goals can be quite vague, so align your expectations with available resources, take into account previous performance data, and use the experience of your professional network for reality check if necessary.
- Not following up timely or regularly. Stay informed on your team members’ progress, see if there’s something you can fix in the process of performance improvement, and give constructive feedback to help them meet their goals.
- Ignoring some factors that affect performance. Make sure all factors are taken into account: use all performance data sources, observe the dynamics, and see what tends to influence performance.
- Ignoring employees’ feedback. If you’re not collecting your team members’ feedback yet, start doing that – and implement processes to analyze the collected data and draw actionable conclusions. Introduce it to your work routine to stay updated on your team’s performance.
Measuring individual and team performance is a hard but vital task of a manager’s work routine. Staying informed on performance trends and being able to proactively handle possible issues is essential for planning and managing work within a team. Use all available data to monitor performance, plan some work time for data collection and analysis, and manage your team’s resources more efficiently.