Performance Management

The Essential Guide to Business Performance Management

December 17, 2021
March 21, 2024
Lyssa Test
Lattice Team

While employee performance management measures the effectiveness of an employee in a particular role, business performance management (BPM) measures the overall success of a company. By measuring and analyzing financial health as well as customer and employee satisfaction, your company can holistically evaluate its current success and identify areas for growth. While financial and customer data is usually handled by other departments, your Human Resources team can help with the employee satisfaction side and pull relevant data to help the business performance management process move along.

If you’re asked to present the full picture of employee satisfaction during your company’s next business performance management process, you might be wondering what factors you should include in your assessment. In this comprehensive guide, we’ll share the top areas of the employee experience that impact job satisfaction, and how these areas can help improve overall business outcomes. Here’s a look at what Human Resources and People data to include in your business performance management audit, and how to use these findings to improve your business today — and in the near and distant future.

5 Areas to Include in Your Business Performance Management Audit

1. Engagement

A key aspect of business performance management is understanding how your employees feel about working at your company. If your organization offers roles, projects, and career opportunities that invigorate employees, your firm will be able to attract, grow, retain, and engage top talent more easily. One 2020 Gallup survey revealed that companies with high employee engagement actually experience better customer engagement, higher productivity, better retention, fewer accidents, and 23% higher profitability than businesses with low engagement.

On the other hand, not investing in employee engagement can actually come at a high cost for your business. Gallup's 2017 State of the American Workplace Report found that active employee disengagement costs American companies $483–$605 billion every year in lost productivity. That’s why being highly attuned to employee engagement should be a fundamental concern for your business.

To start prioritizing employee happiness, you need to understand what the current state of employee engagement looks like at your organization. Engagement, employee net promoter score (eNPS), and pulse surveys allow you to quantify employee engagement, track changes in workplace sentiment, and measure the impact of company-wide HR and People initiatives. These surveys will also let you benchmark your business’s eNPS and understand how your company compares to your competitors against whom you might be vying for talent. 

With Lattice Engagement, you can create and share surveys to understand exactly how your employees feel about working for your company. These rich insights can help you identify what elements of the employee experience keep your employees engaged, and what areas you can improve. This will allow you to build a better workplace for both your current and future employees. 

That said, in order to truly move the needle on employee engagement, you need to work closely with the individuals who have the most influence on your employees’ day-to-day workplace experience: managers. Offering robust training programs for new and existing managers can teach them the skills they need to lead successful teams, develop their employees, and recognize and reward the great work of their people.  

While your managers should use one-on-ones, team meetings, and performance reviews to meaningfully connect with their direct reports, they can also share feedback and recognize their employees’ accomplishments asynchronously to engage their teams, too. With an employee recognition tool like Lattice’s Praise, managers can easily commend and increase the visibility of a direct report’s exceptional achievements. This allows your employees to feel seen and celebrated throughout the organization for the outstanding work they’re doing, which can be a great boost for morale and engagement. 

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2. Professional Development

There are two main aspects of professional development that employees often care about: upskilling and career growth. The former is a strong motivator, particularly for younger generations looking to establish and grow their careers. In fact, according to Gallup, 87% of millennials find professional or career growth and development opportunities important in a job. 

To help your employees develop new skills and hone existing ones, your business can offer professional growth stipends, internal mentoring programs, on-the-job training, and one-off training classes. Offering these ancillary benefits shows your employees you want them to learn and grow with your organization. It can also help engage and even retain your talent, with 94% of employees saying they would stay at a company longer if it invested in their learning and development, according to LinkedIn’s 2020 Workplace Learning Report.

While these types of approaches can be a great way to scale professional development at your company, professional development is an area that can vary widely from person to person. That’s why you need managers to step in and help guide their employees’ career paths. Your managers should have ongoing career conversations with their teams to learn each of their employees’ career goals and understand how to help them advance vertically or laterally within your organization.  

Performance reviews, in particular, provide managers with an excellent opportunity to discuss career goals with their employees. During employee appraisal conversations, managers should share performance feedback with their direct reports to help them identify their strengths, weaknesses, and areas of opportunity. Even if an employee has strong performance, their manager should aim to share constructive feedback with them or push them to challenge themselves more — whether that be learning a new skill or taking on a new project outside of that employee’s job description.

Lattice Reviews helps you foster a work environment and company culture that invests in internal growth and motivates employees to grow with the company. When reviews are simple and seamless, managers can spend less time filling out administrative paperwork and more time having meaningful conversations with their teams. Your employees will notice the difference and you’ll notice the positive impact effective reviews can have on employee morale, engagement, and loyalty.

But in order to have meaningful and productive career conversations, managers need to know exactly what career paths are available to their employees and what skills, competencies, and experience they need to be qualified for their dream role. 

Having clear, detailed, and documented career paths can spell that out for your managers and employees. With a tool like Lattice Grow, your business can create, store, and share competency matrices with employees and managers. With this information, your managers can coach their direct reports in weekly check-ins and annual, biannual, or quarterly performance reviews to ensure they stay on track to meet their personal and professional goals. Career paths can act as growth guides for your teams and motivate your employees to envision having long, successful, and fulfilling careers at your company. 

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3. Goals

Goals do more than just motivate individuals to do their best and help measure the success of those efforts — they also help give work purpose and meaning. 

By taking goal-setting seriously, your business can ensure your employees understand the impact of their day-to-day responsibilities and feel connected to your company’s overall mission. This can be done by setting effective cascading goals. Cascading goals ensure goals align at the organization, department, team, and individual levels so that everyone in your company understands how their accomplishments contribute to advancing the business. This method, paired with either the SMART goal or Objectives and Key Results (OKRs) goal-setting framework, can help improve organizational transparency and motivate employees. 

But while your business can benefit from having strong, clearly defined goals, your HR and leadership team will also want to know how successful your departments, teams, and individual employees are at meeting or surpassing these goals — especially when trying to assess your business performance management. 

With Lattice Goals, your employees can easily submit their personal goals, map them to organizational goals, track progress milestones, and share updates with their manager. Managers and business leaders can track goal status and progress to identify where they can take action and keep the company on track, allowing them to monitor goal completion and understand how employee productivity is impacting overall business performance management. 

Goals are an effective way to ensure that your employees are making progress while helping your business grow. While assessing employee goal completion is a key part of any business performance management process, you must also remember that goals can boost employee engagement, too. Instead of having goals solely tied to productivity, remind managers to encourage their employees to set personal career development goals as well. This could include learning a new skill, taking a class outside of work, attending a conference, or even speaking up more in meetings. These personal goals, while not directly tied to your business goals, can help your employees grow professionally and shape their careers with your company.

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4. Feedback

Waiting to share feedback until the performance management cycle ends is too little, too late. Your employees should give and receive constructive feedback regularly throughout the year in order to push themselves and others to do their best. 

The key to creating a culture of ongoing feedback is to embed it into your employees’ existing behaviors. For example, if your managers are already meeting weekly with their direct reports, advise them to share regular feedback privately with their employees during this time. Or, encourage them to shout out an employee’s great work in their next team or department meeting. 

Feedback can also be given and received asynchronously, too. Lattice’s Feedback tool allows every employee to give and receive feedback to and from their manager, direct reports, peers, and team members. Employees can even request feedback from specific individuals, like their manager, to gain valuable and actionable information they can use to improve their performance and teamwork skills. 

Giving and receiving feedback takes practice — the more your employees do it, the easier it will become. While project-based reviews, team meetings, notes on a pitch deck, and one-on-one meetings are all instances when managers can offer a performance assessment and help to coach their teams, the most in-depth feedback conversations typically occur during quarterly or annual performance reviews. These formal feedback sessions are often when managers have a chance to give employees the most concrete feedback on their individual performance.

To help your employees get the most out of your company’s performance reviews, consider implementing 360-degree feedback that combines the points of view of the employee, their manager, and their peers. This more holistic and objective employee performance evaluation can give an individual more actionable advice on how to improve in their day-to-day role than a manager alone could typically provide. Utilizing a performance management system like Lattice Reviews makes requesting and collecting these different performance assessments for an employee’s review easy and painless, allowing managers to focus on sharing their feedback effectively and empathetically.

A culture of feedback is crucial to your overall business success. It indicates that your employees are listening and growing in ways that improve the way they do their jobs and collaborate with others. Understanding how open your employees are to giving and receiving feedback is a key indicator of agility, flexibility, and growth in any business performance management process. 

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5. Analytics

Lastly, a large part of any business performance management process is quantifying the state of your business and measuring the impact of your past actions. While many elements of the employee experience are difficult to quantify, People analytics and the right metrics can help you put a number to most of the factors mentioned in this guide. For instance, data from your employee engagement, eNPS, and other employee surveys can allow you to quantify employee sentiment, track changes over time, and understand the impact of your initiatives.

If you’re looking for even more People data to use, try partnering with a People management platform like Lattice. With Lattice’s robust People analytics dashboards, you can get a bird’s-eye view of how many employees are participating in one-on-one conversations, conducting performance reviews, giving and receiving feedback, recognizing their teammates’ hard work, progressing toward their goals, and more. 

This data can give you robust insights into different areas of the employee experience and help you understand how your teams are working together and toward business goals. When your company is conducting a business performance management audit, having this data is key for conveying the importance of your HR and People efforts and the role your employees play in your overall business success. 

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The Best Defense Is a Good Offense

Business performance management is a huge asset for your business. While it allows your senior leaders to understand the state of business effectiveness, it also provides an opportunity to highlight all of your impactful HR initiatives as well as proactively work to develop and empower employees. 

Periodically evaluating your business performance management keeps you from ending up on the defensive and dealing with problems that could take a serious toll on your company, like low engagement, high turnover, or workplace conflict. Proactively addressing problems and ensuring your employees have clear goals and the knowledge and support to reach them will set your company up for success. It’s essential to recognize the value your employees bring to your organization and invest in their growth and development to maintain and accelerate your business’s momentum — now, and in the future.