In this article, we explore what employee performance is, how it has evolved to its current state, the elements of a successful performance management program, and how to motivate performance in your organization.
Employee performance is something your organization probably cares a lot about – and rightly so. Employees are essential to an organization’s productivity, profitability, and ultimately, success, and those results aren’t going to happen without stellar employee performance. But just caring about employee performance doesn’t mean your organization really understands the concept, has an effective performance management process, or knows how to improve employee performance. That’s where this article can help. Continue reading for everything you’ve ever wanted to know about employee performance.
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Employee performance is the measurement of how well an employee executes on explicit and implicit standards, goals, and priorities.Let’s break down this textbook definition to understand what employee performance really is:
Employee performance is not binary. An employee’s performance isn’t just good or bad: “Yes, you met the targets,” or “Nope, you missed the goal.” Employee performance falls on a scale with lots of shades of gray. To view
Because employees have different roles and responsibilities, employee performance will look different for each employee. Setting and verbalizing the right goals and expectations is a huge (but not the only!) part of employee performance.
As much as organizations try to avoid ambiguity, it’s impossible for every element of an employee’s performance to be explicitly stated. Yes, organizations should try to shed as much light on their expectations as possible – transparency is a wonderful ambition. But smart employees and managers also understand the unwritten rules of your organization.
Employee performance is about much more than meeting the numeric goal set at the beginning of the year. Did the employee embody the values of your organization? Was he or she a good teammate? Did the employee work efficiently? Did he or she exhibit strategic thinking or financial savvy? To evaluate performance only on stated, numeric goals ignores all the other ways an employee influenced the organization’s success.
As a concept so critical to organizational success, it’s no surprise that employers are constantly chasing a better understanding and measurement of employee performance. This effort to accurately capture employee performance has spawned about as many measurement techniques as there are unique companies; in other words, there are a lot of different ways to measure employee performance. Different scales, different metrics, different goals. But in the end, it doesn’t really matter.
“But in the end, it doesn’t really matter.”
While measuring employee performance is all well and good, in the end, measurement alone can do nothing to increase performance. Think back to those report cards you got in middle school. Sure, getting an A or F told your parents how you were currently performing in your social studies classes. But those grades couldn’t communicate whether you understood the causes of the Boston Tea Party.
Realizing this, most companies have moved beyond basic performance measurement (strictly goal tracking) and adopted the concept of performance management. Performance management is a process that aims to improve, not just measure, employee performance.
Since the idea of employee performance first entered the collective consciousness, it has evolved quite a lot. Let’s walk through the landmark changes in performance management thinking in the last 200 years.
As manufacturing and production jobs are automated or sent overseas, service companies take their place. “Employees are your greatest asset” becomes “employees are your only asset.” Employers adopt a more holistic, human approach to employee performance in an effort to work with, rather than against, the employee.
A study by Reuters reveals 4 out of 5 employees are unsatisfied with their current performance reviews, pressuring HR teams to take a step back and evaluate current processes.
The evolution timeline above brings us to present-day employee performance management. Organizations everywhere are ditching the mechanism once thought to be the paramount example of performance management: the annual employee appraisal, employee review, or performance evaluation (the terms are interchangeable). So why are all these organizations leaving the outdated employee evaluation? And what are they turning to now?
Employers are leaving the annual employee review simply because they find it ineffective. Whether through anecdotal evidence or definitive research, they’ve seen the light: performance reviews don’t improve performance.
Employers have seen the light: performance reviews don’t improve performance.
The annual review isn’t frequent enough to address small issues before they become big problems, and it’s not uncommon for issues to fall through the cracks in a year’s time. The association between reviews and compensation often makes feedback more punitive than constructive. A formal annual review process stifles the open and transparent dialogue needed for real performance improvement. Besides that, nearly everybody hates it.
We’re thrilled that organizations are leaving behind the ineffective annual employee review. However, the very best employers are making one more critical shift: changing their mindset from “performance management” to “performance motivation.” The performance management process of old was touted as a way to improve employee performance; but its flaws are obvious in the term itself. To manage means to “control, organize, or administer.” Not much there that can increase performance. Performance management by conception was a very passive, bureaucratic process. Now, let’s look at performance motivation: to “drive, propel, or stimulate.” There’s the action and leadership that employees need.
To manage means to “control, organize, or administer.” To motivate means to “drive, propel, or stimulate.”
Performance motivation aims to inspire employees to supercharge their own performance. Wondering how to motivate employees? Through realistic and challenging goals, inspiring recognition, continuous coaching, and frequent conversations about performance.
As you move from performance management to performance motivation, make sure these four elements are a part of your performance strategy.
When it comes to individual success and team alignment, goals are crucial. Goal setting shows employees where they want to go; goal tracking keeps individuals motivated and everyone else informed on the way there. Studies show people who set goals are often more successful than those who don’t. A study conducted by a Harvard MBA program analyzed the success of three student groups: 1) those who wrote down goals with written plans to accomplish them, 2) those who had goals in mind but didn’t write them down, and 3) those who set no goals. After 10 years, the study found:
You can’t argue with those results. So, if goals are so important to performance, what’s the best way to set and track employee goals? First, let’s start with the basics. For goals to be effective, two elements must be thoughtfully and thoroughly considered.
Ok, now that we’ve got the basics down, let’s get into the
The SMART goal acronym stands for Specific, Measurable, Attainable, Relevant, and Time-bound. SMART goals have been around for decades because they clearly articulate detailed goals. (But beware! A SMART goals template isn’t foolproof.)
Pros of SMART Goals:
Cons of SMART Goals:
Pros of OKRs:
Cons of OKRs:
A wide variety of goal tracking methods exist, and each can work well for the right type of person. However, there are four big similarities that all effective goal tracking methods have in common.
First and foremost, tracking goals needs to be a public event. Whether your goal is losing weight or hitting sales records, you need the help, support, and encouragement of your community.
Because an employee is part of a larger organism – the team – and that team is a part of an organization, employees must be able to show that their goals are pointing in the same direction as everyone else’s.
In order for employees to be held accountable,
Sometimes, you backtrack on a goal; sometimes, the due date changes; sometimes, the goal has to be altogether scrapped. Goals are a guide, not an ultimatum. And as such, goals must have the ability to change and flex according to current circumstances.
Employees might meet a goal once, but their improved performance won’t last long without recognition of a job well done. When employees feel appreciated, they’re more likely to go the extra mile for their organization, resulting in increased employee performance. In fact, roughly 69 percent of employees said they’d work harder if they felt their efforts were better recognized.
Employee recognition can include a variety of activities that differ based on the workplace and the individual, and it’s important to find the best fit for your organization. Which employee appreciation ideas will motivate performance? Here are four best practices to follow:
Despite the importance of recognition in driving performance, our research has found that less than 1 percent of organizations actually perform best in that area. Don’t let your organization ignore recognition! Employee recognition is one of the most simple and effective ways to drive performance.
Feedback – whether from peers, managers, or third parties – stimulates learning and growth processes essential to employee performance. Unfortunately, that doesn’t make giving and receiving feedback any easier. But if your organization is serious about motivating and improving employee performance, it better get comfortable doing the uncomfortable. Without a feedback culture, it’s only a matter of time before your organization stalls.
Feedback can come in all shapes and sizes; it’s up to you to decide which type is best for each situation.
Formal vs. Informal Feedback
If your aim is to motivate (not manage!) performance, then your organization must be able to support both formal and informal feedback. Most people have a good idea what formal feedback looks like: a performance review, a project post-mortem, really anything that is recorded in some way and follows a predetermined process. Informal communication is a bit more nebulous. Informal feedback could look like a quick Slack message or a request for input. Formal feedback should be used for big picture, essential functions or projects. Informal feedback is usually reserved for the smaller, more minute details of an employee’s performance.
Attributed vs. Anonymous Feedback
Attributed feedback is feedback that has the giver’s identity attached. Maybe you mention something to an employee in person, or you send an email to him or her suggesting a change in one of their processes; that’s attributed feedback. Anonymous feedback does not reveal the giver’s identity. Examples include a note on the breakroom fridge asking everyone to keep the kitchen clean, or general feedback that a manager collects and gives to an employee.
Both types of feedback have their merits: Attributed feedback discourages careless or overly critical comments and allows the receiver the opportunity to follow up if they have questions. Anonymous feedback removes the fear of retribution or hurting another’s feelings – but it often comes at a price. That’s why, in an effort to build a transparent and trusting performance culture, we recommend attributed feedback whenever possible.
Direct vs. Indirect Feedback
Direct feedback is exactly what it sounds like: you (the giver) give comments and suggestions directly to the coworker who needs feedback. It’s not necessarily given in person, and you can use mediums like an instant messenger, phone call, or email. When giving indirect feedback, on the other hand, you go to
While there are certainly concerns that should be handled by higher-ups (personal or sexual harassment, criminal activity, etc.), many organizations overuse indirect feedback. “Shielding” employees from feedback is a mistake. When feedback goes through the filter of HR or a manager, it often gets muted or muffled like a childhood game of telephone. What the employee eventually hears – if anything at all – might not be recognizable. Your employees are big girls and boys. They deserve to hear feedback firsthand.
Upward vs. Downward vs. 360 Feedback
Just like the others, these types of feedback are pretty self-explanatory. Upward feedback has direct reports giving feedback to their managers (or their manager’s manager), whereas downward employee feedback involves managers giving feedback to their direct reports. 360 feedback draws on peers, managers, direct reports, and even non-team or third-party contacts (like a customer or prospect) as sources of feedback.
Upward and downward feedback are both pretty standard in organizations, and they do a decent job of gathering feedback. However, for those organizations really looking to boost employee performance, there’s one solution that can get you all the information you need: 360 feedback. Though 360 feedback can often require more effort to collect, this is what makes it by far the superior form of feedback. Use
We’ve all been on the receiving end of great – and awful – feedback, so we know what a difference giving feedback the “right way” can make. If you only remember five things about giving employee feedback, let it be these five!
One on one meetings
Just conducting one on ones doesn’t ensure that they’ll be successful in improving performance; the one on ones have to be conducted effectively. Here are the best practices for a successful one on one meeting:
While we see companies left and right dropping the traditional performance appraisal methods, it might not be on the horizon for your organization. The switch to a more engaging and continuous performance management process can be a hard sell and an intimidating process for even the most progressive of organizations.
Luckily, performance appraisals can still be conducted in an engaging and motivating way. If you don’t see your organization scrapping more traditional methods of performance management any time soon, be sure to keep these concepts in mind:
If you’ve learned anything from this article so far, let it be that motivating employee performance is far from easy. It can be done – absolutely – but motivating long-term performance improvements is not a one-time initiative. Thankfully, you don’t have to go it alone.
Many organizations turn to some form of HR tech to support them in the journey. The software can go by different names – employee engagement software, performance management system, employee motivation tech – but all the systems should be able to support the four essentials (recognition, goals, feedback, one on ones) that we discussed above.
Here’s a bit more detail on what to look for in a software provider:
GOAL SETTING AND TRACKING
|Houses and aligns teams and organizational goals in one place|
|Provides continuous and accurate tracking along with an unlimited historical record|
|Empowers managers and teams with flexibility and customization|
|Creates a fun, social community interface|
|Fosters transparent collaboration|
|Corrals all employee praise into a single, public platform|
|Engages employees with a fun interactive platform|
|Allows for achievement- and behavior-based recognition|
|Tracks recognition trends for
|Establishes continuous dialogue through two-way communication|
|Maintains a permanent online record of conversations|
|Encourages authentic performance discussions|
|Supports all types of employee feedback|
ONE ON ONE MEETINGS
|Organizes and streamlines performance conversations|
|Allows for frequent one on ones with easy, approachable interface|
|Integrates with HRIS and other performance metrics|
|Prompts manager and employee prep work for thorough and predictive discussion|
Employee performance is essential to the success of your organization, and as we’ve seen,
“To win in the marketplace you must first win in the workplace.”
-Douglas Conant, Campbell Soup Company CEO