Top Tips for Measuring Performance in Your Business
So often I work with business owners who are frustrated that their business is not achieving the results that they had forecast, planned and expected. Often they really aren’t sure what their team are doing or not doing to contribute to the success of the business
So often I work with business owners who are frustrated that their business is not achieving the results that they had forecast, planned and expected. Often they really aren’t sure what their team are doing or not doing to contribute to the success of the business; and often there are no measurements in place to draw any correlation between performance and results. When I ask why measures and accountabilities don’t exist, I’m told by the business owner that they don’t want too much bureaucracy, over-complicated graphs and charts and for their team to be focused on rigid job descriptions. Fair enough concerns, but measuring performance doesn’t need to be too arduous. Following are ten tips to help you tackle this topic.
- Know your business vision, your values and your strategic goals – where do you see your business in the future, what values matter to you and are they being displayed within your team? What are your goals for the business? If you don’t know these answers – how can your team know them, and therefore, if they don’t know them, how can they help you achieve the strategic business goals?
- Communicate your vision – let your team know how their contribution adds value to the business. If your team currently don’t have position descriptions, get the team involved in creating these – they can tell you what they are doing at an operational, hands on level. You as the business owner and/or manager can then determine if what they are doing is appropriate for realising the business vision.When teams have been asked to prepare their own position descriptions, business owners are often astounded by what their employees are actually doing day-to-day. Sometimes what employees are doing is not what the business owner wants them doing at all!Another useful activity to do when creating positions with your team is to ask them what they see themselves doing in the business in a year or two years time. They may have great ideas for stretching themselves, their roles and the business – use this information to support career development and succession planning activities.
- Review your position descriptions and focus on your business objectives – each job function should have an accountability and there should be key performance indicators in each position description (around three to five) – all of which should help each individual team member focus on what they need to do to contribute to the success of the business. Keep the KPIs challenging, yet realistic and involve the individual team members in setting them. This way, they are much more likely to buy in to the process.
- Induction plans and follow ups – all new employees should have a full induction/onboarding process and follow up with their line manager at the end of the first day, first week, first month, second month and third month. Why? Because we want to make sure that they are fitting into their role, the team and the business. Use the follow up sessions to review the new employee’s performance in line with their position description, targets and expectations. Give feedback to the employee and address poor performance immediately and if they are doing well, give praise relating to specific areas that they have performed well in. Reinforce the behaviours and activities that you want repeated.
- Have weekly catch ups – meet with your direct reports and make sure that others with direct reports are doing the same. These meetings should be focused on what the employee is working on, barriers/challenges, assistance they may need, any issues that they have encountered since the previous catch up. Managers often say that they don’t have time for this, but a few minutes dedicated time with your direct reports really will help to ensure that they are on track and performing to expectations.
- Quarterly reviews – these are a good opportunity to set goals with your team, helping them to work on new challenges and helping you to get to know them better professionally and on a more personal level – set challenges that are professionally focused i.e. learning a new system, mentoring a more junior team member; and personally focused i.e. training for a half marathon etc. Whatever the goals, support your team members and check in with them regularly to see how they are progressing. Often knowing that someone else is supporting your goals can give you that extra bit of encouragement to help you succeed.
- Annual appraisal and performance development plans – these could take place at a specific time each year or on the anniversary of an employee’s employment with the business; either way, they should give feedback on position competencies and key performance areas. These reviews also provide an opportunity to learn how employees want to develop and even let you know how things could be improved. Details from the quarterly reviews will support the completion of these documents. It is often at the time of the annual review that negotiations will occur on pay rises and performance bonuses. If you will have been keeping an accurate record of performance throughout the year, it should be easy to identify who has performed exceptionally, average or poorly and who, therefore, should be getting rewarded (or not).
- Poor performance – monitor it and don’t ignore it. If an employee is performing poorly it may be for a number of reasons, they may have personal issues which are impacting on them in the work place; they may be struggling to do a particular task and need further training; or they may not have the capability to actually do the required job function…. whatever the reason, poor performance should be addressed, thus enabling you to support the employee and find the best solution to resolve the issue, depending on the circumstances.
- Review your business objectives – do this on a quarterly basis and ask yourself how you are performing as a business in relation to these, and if something needs tweaking with your team to help you better achieve these goals, make the necessary changes – be guided by your goals and results relating to performance, productivity and profitability.
- Remember ‘what gets measured gets done’ – knowing what is measured gives you and your employee’s direction. Give yourself and your team accountabilities, then continue to measure and review these.