Don’t neglect performance management in tough times

“Working in chaos is not good for anyone, and if you don’t tell people what is going on, they’ll fill in the blanks themselves,” she said. “When managers tell employees about what is going on in the company, whether it’s good or bad, it builds the level of trust needed to create a good workplace.”

People often equate performance management with the annual performance review that helps companies decide who gets promotions, raises, bonuses or disciplinary actions.

“Effective performance management goes well beyond reviews,” Hintz said. “It’s about the entire life cycle of an employee.”

It starts with a well-written job description with clear performance standards. “The responsibilities should be doable and based on benchmarks that have been achieved in the past,” she said.

For a call center operator, it might include how many calls the person would take in a day, and what percentage of issues should be resolved on the first call, for example. Goals should be defined at the individual level, but linked to the department and overall company goals, so that employees understand how their job fits into the company mission.

Clear job descriptions make the review process more objective, allowing supervisors to assess employees doing the same job with more equity. “Knowing the expected responsibilities also helps employees and supervisors recognize skill gaps, which can be addressed through training and development,” Hintz said.

“When employees hear that management is willing to invest in their development, it sends a clear message that they are valued and have a future with the company,” she said. “It creates a stronger company culture, which minimizes employee dissatisfaction and turnover.”

Using in-house experts as trainers, low-cost Internet classes or Web-inars, or the training resources provided in a professional employer organization package can lower training costs. She encourages her clients to look for low-cost lunch and learn lectures that would appeal to a broad spectrum of workers (such as stress management or wellness initiatives).

There are other ways to reward employees than compensation, as well. A change in title, extra time off, a more flexible schedule, access to a leadership training program or a high-level project can acknowledge value without breaking the budget.

“Companies need to understand what’s important to their employees to be able to reward them when they are successful, and that comes from a performance management program based on communication, collaboration and commitment,” said Hintz.

Bosses should give regular feedback to their employees on what they are doing well and in what areas they need work, rather than waiting for an annual review. “That allows an employee to improve before a formal evaluation,” she said.

With ongoing communication, work progress becomes a more collaborative effort. “The example must come from the top down, with leaders setting high standards for management,” she said.

“The body of human resource knowledge is so vast, that it can be difficult for a small or midsize company to get a handle on creating a performance management system,” said Hintz. Partnering with a professional employer organization can deepen their knowledge of best practices, and add to their resources. Gaining access to more affordable employee benefits at larger group rates can often offset the costs of outsourcing HR services.

“A good performance management system shows employees that you’ve thought through what they need to do; you recognize their contributions; you want to train and develop their skills; and you will reward their success,” said Hintz.

“It’s critical to the overall health of a company, because it strengthens the culture, increases retention and employee satisfaction, and improves a company’s reputation.”