Performance Management Advice for Small Business Owners
Tuesday August 13, 2019
By: Baili Bingham
Performance evaluation is a critical component of effective management because it allows managers the chance to provide feedback and goals for each employee. Creating the space for a free flow of feedback and open communication is essential to building a strong company and team. With effective performance management practices, you’ll see improvements in employee engagement and higher productivity levels.
Traditional approaches to performance management typically involved an annual round of one-on-one meetings with each employee, but this is no longer the standard. Continuous and agile performance management includes more regular communication rather than a single discussion once a year.
As a small business owner, it’s easy to implement this style of open communication. A small team means you’re all in close contact, so be sure to set the standard sooner than later. By demonstrating what it means to have consistent check-ins and implement employee feedback, you’ll be setting a prime example for the rest of your company to mirror.
Modern performance management strategies give managers the opportunity to facilitate consistent communication and allow for both personalized feedback and the completion of targeted, short-term goals.
The Benefits of Effective Performance Management
Implementing better performance management strategies can have a variety of positive effects on your organization. It gives you a better understanding of each employee’s strengths and weaknesses while giving them clear expectations that align with your company’s goals.
Strong performance management also encourages supportive communication at all levels. Communication is one of the most important factors in a strong company culture, which can in turn help you attract and retain the best talent. If your employees feel as though they can’t communicate with you openly, it’s likely there isn’t a psychologically safe environment for them to be vulnerable.
Continuous performance management puts employees in an active role by creating a space for them to provide helpful feedback, and to receive it. This allows every voice to be heard, not just the higher-ups. As your company continues to grow, having this style of management ingrained in the company culture will help you attract talent and keep them engaged.
Costs Associated with Performance Management
Traditional annual reviews can potentially eat up hundreds of hours and are an inefficient way for managers to spend their time. They involve a ton of paperwork and evaluation, and it’s impossible to fully understand an entire year of performance in just one meeting.
When you run a small business and there is so much going on each day, you may not feel you have the time to create valuable reviews. Spending money on employee engagement or performance management software is a smart investment in your employees that will prove its worth over time.
Many of these come at manageable costs and offer helpful tools for peer communication and continuous feedback. You’ll spend less time managing performance evaluation logistics while achieving better results. Continuous feedback processes are directed at future improvement rather than just rating past performance.
Performance Management Solutions
Many performance management and employee engagement applications connect directly to solutions such as payroll and HR. This makes them easy to implement with your existing practices and minimize the learning curve associated with your new app.
Continuous performance management is changing the way businesses of all sizes approach evaluations, focusing on employee feedback and continual communication rather than top-down goals and annual meetings. These ideas can help you become more efficient at all levels and ensure employees remain engaged and productive as your small business grows.