Salaries are one of the biggest cash outflows in nearly every business - that is the case in our business. We're small so we can't have our money go to waste.
To ensure we get the most of our team and they get the most from Upward Insights, we developed an employee performance management system that aligns business objectives with the expectations of individual contributors. This resulted in:
Increased employee satisfaction
Created clarity of expectations
Improved quality of our service
Reduced individual workload
Improved profits
We developed this system for ourselves, found it useful for our clients and now share it with you.
Step One
objectives and expectations are set on a company level then broken down into departmental and individual levels
The Company needs to establish two types of expectations:
Goals & Objectives for the Company to achieve in the coming performance cycle
Policies, Ways and Standards that must be applied along the way during the performance cycle
Examples of the items you'll need to establish:
Mission, Vision and Values
Policies, Ways and Standards
Seniority Levels
If the Company is large enough to have fully functioning departments, then it needs to take company-level Objectives and Expectations and break further tailor to each individual department
This is the most important file for the individual contributor as it's specific to him or her.
This file outlines the following:
Seniority Level Expectations
Role Objective
Role KPIs
Specific Responsibilities, Tasks and Recurring Deliverables
This file goes beyond traditional "job descriptions" used the hiring process
Step Two
performance should be documented throughout the year ... mainly by the staff member for their own benefit
The company should have a workflow management system to track projects and tasks as they are being performed as well as a way to report and summarize key deliverables.
It is the responsibility of the staff to make sure they are managing and updating the tasks within the system as well as completing the reports necessary.
The company should develop a way for team members to track their own achievements against their KPIs and responsibilities.
We have staff manually write their achievements for the day along with answering a few prompting questions daily. This serves for the staff to be constantly reminded what their role and objectives are as well as their KPIs - our staff get really busy and we do not want them to lose sight of the bigger picture while working on the day to day tasks.
Everyone hates tracking time ... but it's the best way to understand where the business is allocating the most important and expensive resource at their disposal: time.
Time tracking software like the one we use (Clockify) allows you to assign a cost per hour to every individual, thus enabling the business to see how much it costs to have completed a particular project.
Step Three
In the final step, the Company needs to evaluate performance and make changes as needed .... including personnel changes
The Company needs to have a standard rubric that will be used for every supervisor to evaluate their staff. This rubric should:
Reference Company-Level Expectations
Reference the Individual Role and Responsibility Summary, Objective and KPIs
Have a numeric or equivalent standardized rating conversion, that allows to convert subjective evals into values that can be compared across different people - this allows the company to summarize its aggregate performance into easy to understand rates.
The company needs to have a predictable cadence and timeline for reviews to be conducted.
The Company needs to be prepared to incentivize performance by rewarding positive performance and punishing negative performance. Here are the obvious levers used in incentives:
Compensation
Title, Role & Responsibility
Benefits & Perks
Do not be afraid to discuss compensation, titles, and benefits. Reward good performance and make it clear if individual is underperforming.