We’ve said it before, and we’ll say it again — your people are your business. Even with a strong product or a recognizable brand, your business won’t get far without the right employees to keep it running and in demand. Effective employees drive profitability and growth, which is why businesses place so much importance on performance.
But employee performance is a nuanced topic, and good performance management is about understanding these nuances and addressing them proactively. Here are some in-depth strategies for improving employee performance.
Employees want to be good at their jobs. Managers want to build powerful teams. And HR teams want to drive business results. To do this, there needs to be a clear understanding of what success looks like at all levels within the organization.
Employee performance is defined by how well an employee executes on responsibilities and contributes as a team member. Strong employee performance can offer great value to businesses by driving quality and efficiency while delivering an improved customer experience.
When defining employee performance, it’s important to note the distinction between performance and productivity. Productivity is relatively easy to measure — you can assess the productivity of your employees based on the number of goals they meet, as well as how much time and effort is spent to accomplish them. The thought process here is very results-driven, so there is little room for interpretation or subjectivity.
Performance, on the other hand, is not binary — meaning that it can’t be boiled down to a simple “good” or “bad.” In reality, performance encompasses a variety of aspects of an employee’s work that can’t be oversimplified. Some employees enrich the development of their teammates. Others exhibit technical savvy in specialized areas or drive valuable cultural initiatives. These qualities may not translate into numerical benchmarks, but they undeniably contribute to the success and growth of your organization and should be recognized when evaluating your employees’ performance.
There are a number of factors that can influence employee performance, and businesses don’t always have control over them. With so much of the employee experience hidden beneath the surface, it’s important to avoid making assumptions about what might be causing an employee to underperform in certain areas. The best way to avoid this is to rely on data and employee engagement to gain an understanding of the root causes for performance issues.
Some common factors that affect employee performance are:
This one might seem obvious, but skill gaps are a common underlier in performance issues that can take a while to recognize. Even experienced employees will run into situations where they are not equipped with the right skills or knowledge to perform successfully. In these situations, rather than blaming employees for lacking skills, businesses and managers should focus on identifying and bridging the skill gap, either by providing additional training or seeking outside help.
Of course, it’s important for employees to have the right technical skills for their respective roles, but it’s equally important to acknowledge proficiency in soft skills, like negotiating or public speaking. A new manager, for example, may be fully caught up in technical certifications but require some training on leadership and management. Addressing this gap in job competencies is imperative for teams to be successful.
If your employees are confused about team and business goals, their performance will inevitably suffer from a lack of focus and direction. When your employees are fixated on individual tasks and deliverables, they miss out on the bigger picture of their role in your organization and are less likely to exceed expectations. Likewise, if your company’s goals are unrealistic, your employees will experience burnout, and their performance will suffer as a result.
Goals that are specific and measurable lead to higher performance compared to goals that are vague and undefined. If your employees seem stuck in the mentality of checking items off a list, maybe it’s time to review your goals for clarity and direction.
Sloppy workflows are a major drain to your employees’ productivity. If your processes are inefficient or fragmented, it’s likely that they’re hindering your employees from accomplishing their goals. Studies show that 39% of employees think document management processes at their company are broken, and 55% of new hires feel that they lack access to the tools they need during onboarding. That’s a big portion of the workforce who feels unable to perform at their best due to process-related issues.
If you’re unsure whether workflows at your company are enabling or hindering your employees, you can spend some time thinking about how accessible knowledge and information are across your organization. Is there transparency on processes for different departments? Do all decisions need to be approved by one stakeholder? Don’t get complacent — remember to continue evolving these processes over time as business realities and needs change.
We’re more likely to make mistakes and underperform when we’re stressed out or overwhelmed. Even the best employees get sick and need to take breaks in order to continue performing at the expected level. Businesses need to remember that employees are human, and expecting them to be unphased by changes in physical or mental wellbeing is unreasonable. Having a holistic view of employees’ experience can help businesses proactively create an environment that promotes healthy behaviors and expectations.
When it comes to improving performance, the more you know, the better. Measuring employees’ performance is crucial for understanding how well your company culture, processes, and goals are translating into action. The following are among the many reasons it pays off to keep track of employee performance:
The insights you get from monitoring employee performance can help inform you in making decisions that drive ROI or profit for your business. A great example of this is the rise in remote and hybrid workforces. By keeping track of employee performance before and after shelter-in-place went into effect, many businesses discovered that employees are actually more productive and satisfied when working from home. As a result of this insight, a growing number of organizations feel comfortable offering flexible working options to their employees and re-thinking their office structure. Decentralizing the workforce allows organizations to save considerably on overhead costs and positively impacts overall profit margins.
Measuring employee performance on an individual level helps businesses identify and nurture their best talent. Companies that keep track of performance indicators, like efficiency, reliability, and collaborativeness, are better equipped to provide fair compensation and recognition to their employees. They’re also more likely to develop high-performers into future leaders and provide support to employees who are struggling to meet expectations. On the other hand, with 40% of employees saying they’d put more effort into their work if their efforts were recognized, businesses that reward exceptional performance are more likely to lose their most valuable employees.
We’ve touched on how ineffective workflows can hinder employee performance, which brings us to another advantage of measuring performance. If employees are spending a disproportionate amount of time on simple tasks or struggling to provide customers with a certain level of care, tracking performance is the first step to understanding what is causing them to fall short of expectations. Workflow issues can look different across teams. For some, it might be a bottleneck caused by a shortage of resources. For others, it could be an unclear division of responsibilities. In most cases, workflow issues are not easily apparent and require insights that can only be gained from consistent performance measurement.
Given how important measuring performance is for businesses, it’s no wonder that organizations are constantly pursuing better ways to evaluate employee performance. There is no single “correct” way to measure employee performance, and deciding which one is best for your team depends on a variety of factors, including size, industry, department function, and product or service type. A few common criteria for evaluating performance are:
In the end, measuring performance effectively is all about asking the right questions. But performance measurement is only part of the equation. Businesses are quickly embracing the idea of performance management, which focuses on turning employee performance measurements into actionable performance improvements.
Improving performance doesn’t have to mean spending a lot of money or completely revamping your company processes from the ground up. There are a few basic principles that can be used to level up your performance management practices.
There’s no quick fix for improving employee performance. But investing in performance management isn’t just a best practice, it’s a prerequisite for business success. Lattice’s HR software empowers your team to share feedback, set and track goals, manage performance reviews, and more — helping you make a return on that investment even sooner.
An independent study by Forrester Consulting found that Lattice’s software had a three-month payback period and delivered a 195% return on investment. To read the full study, click here. If you’d like to see our platform in action, schedule a demo today.