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Performance Management Beyond the Annual Review

    Over a career, managers will deliver hundreds of performance reviews and spend countless hours preparing formal documents and having year-end discussions. Painstakingly try to recall everything that contributed to employee performance over the past year, and share the agony over disappointing performance ratings. Given the hours and aggravation, is the impact worth the effort? The truth is, a year-end performance review does little to impact employee success.

    Cracks in the Annual Review Foundation

    Throughout my three-decade journey in management, I witnessed a whirlwind of change, yet one element remained constant – the annual performance review. Each year, as October rolled around, everything else took a backseat as I dove into review prep, holed up in my office for days. My team, well aware of these ongoing assessments, tiptoed around, mindful that my observations would shape their paths ahead. Gathering their input often led to blank stares as they tried to recall the details of the past year’s work. Anxiety loomed as they awaited their ratings, and my stress compounded as neglected work piled up.

    But in the grand scheme of things, did the content of the review matter? When it all boiled down, employees just wanted to know their performance rating and the potential for a bonus. The flaws of the yearly review process were evident.

    Exposing the Flaws

    • Memory Gaps and Oversights: Both managers and employees struggle to recollect all the actions and behaviors that shaped their yearly performance.
    • Recent Bias: The review tends to lean towards actions and behaviors from the most recent months, leaving earlier contributions overshadowed.
    • Rushed and Distant: The compressed timeframe turns the review into a task to finish, lacking the impact it deserves.
    • Diverse Perspectives: Employee input is all over the map, influenced by their own viewpoints and personalities. Some flog themselves over their shortcomings, while others inflate their achievements beyond reality.
    • Numbers Over Narrative: The final performance rating fixates on numbers, often sidelining the content in the formal written review.
    • Limited Impact: Year-end performance discussions yield minimal effect on employee success, falling short of their intended mark.

    Clearly, annual performance reviews don’t carry the weight they should in overall performance management and development. So, what’s the solution? We can’t just sweep performance assessments under the rug, nor can we ignore all those metrics the company holds dear. 

    Igniting Employee Excellence

    It’s common to think of performance reviews as a once-and-done event. But this approach is like believing a fad diet can guarantee permanent weight loss and wellness. Like any lasting change, the real power lies in adopting a solid system and building consistent habits. Each follow-up, every check-in, all the feedback, and every moment of recognition – they’re not isolated events. They’re building blocks, woven together with thought and purpose, that are the heart of performance management. It’s the cumulative effect, the habit of continuous effort, that yields the results you’re aiming for.

    Think of yourself as the behind-the-scenes wizard making sure every team member shines. You set the stage, guide the way, give directions, communicate, coach, and be the solid support employees need. When you consistently work your magic in managing performance day in and day out, the bigger your success and your team’s too.

    So, what’s the action plan? Let’s break it down to the basics, then dive a bit deeper. We’ll demonstrate each step along the way with some examples of how to have impactful performance conversations with your employees.

    Ready? Let’s dive in!

    Grasping the Basics

    Let’s start by looking at the basics of a performance management cycle:

    This cycle doesn’t have to be set in stone. While starting with role accountability and training is a good idea, the other steps naturally blend together. You might even find yourself circling back to the first step now and then.

    Many large companies have a well-oiled performance management machine that covers all these bases. They’ve got tools for goal-setting, training galore, and recognition programs that dish out perks and year-end bonuses. It’s all there, ready to roll.  If you’re in a smaller outfit, you’ll need to create a basic system. You don’t need anything fancy; you just need to keep performance on your radar, every single day.

    Constructing Your System and Method

    When you take a good look at the performance management components, it might seem like a puzzle with many pieces. The key is to have a system for consistency; a structured way to set goals, monitor progress, document, and dole out well-deserved recognition. But these components are just the ingredients. They won’t whip up a gourmet meal on their own; you need a method to bring it all to life.

    Think of the method as the daily habits you establish to manage performance. The feedback, coaching, follow-up, support, and recognition that you embed into your daily routine.

    Let’s demonstrate this with a step-by-step walkthrough, shall we? We’ll use a financial services scenario, which aligns with my background. You can tailor this to fit any goal that suits your role and industry.

    In our quest to optimize performance management for Beth, we’ll break down each step of the cycle to create a solid system and method.

    Step 1: Role Accountability

    System:  Role accountability is the foundation of  performance management. It begins by establishing clear goals and expectations. Typically, companies will have a set of measures for employees to achieve, or you may have some input in setting those measures. Your initial task is to define these goals, communicate them clearly to Beth, and put in place a robust system for monitoring her progress.

    Upcoming Course: To further assist you in the goal-setting process, stay tuned for our upcoming course, “The Manager’s Roadmap to Goal Setting Success.” This course will guide you through the intricacies of setting and managing goals effectively, ensuring that you and your team are on the path to success.

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    Method: Hold regular meetings with Beth to emphasize her role and goals, and how they tie into the larger team and company goals. It’s vital to move beyond merely communicating goals; employees must also commit to the actionable steps needed to attain them. Kickstart these discussions by asking a series of “how” and “what” questions.

    Now, picture a conversation with Beth about her credit card sales goal of achieving 50 sales for the year.

    The Conversation

    Manager: Beth, let’s talk about your goal to achieve 50 credit card sales this year. How do you envision achieving this target?

    Beth: I’m not sure. It seems like a lot.

    Manager: [You sense a barrier here, don’t ignore it.] If you break your sales target into a monthly or weekly goal, how might that look?

    Beth: [Plugs the numbers into her calculator.] I guess I could try for one a week.

    Manager: That’s a good starting point. What specific actions will you take to get one sale a week?

    Beth: I’ll ask every customer if they want a credit card.

    Manager: What would you say to the customer?

    Beth: Do you want a credit card?

    In this conversation, you’ve successfully engaged Beth in defining a specific, attainable goal and initiated a discussion on how to achieve the goal. However, it’s evident that there’s room for improvement in Beth’s skill set to ensure goal attainment.

    This scenario illustrates how performance management comes into play right from the goal-setting phase. The absence of a detailed “HOW” discussion can leave employees like Beth feeling that their objectives are out of reach, potentially leading to ineffective strategies, such as asking every customer if they want a credit card. 

    To avoid reaching a point where Beth feels overwhelmed by the gap between her current performance and her target, it’s essential to keep the conversation alive. Does she require additional product training, or perhaps some coaching on effective customer interactions? This brings us to the next crucial step in our performance management cycle.  

    Step 2: Training and Resources

    System: Create a structured training program tailored to Beth’s specific needs for mastering the art of credit card sales. This can take various forms, such as formal training sessions, relevant reading material, or even mentorship opportunities.

    Method: Take a proactive approach by scheduling regular training sessions, ensuring Beth has easy access to resources, and providing the essential tools required for excellence. Remember, it’s not enough to offer training; you also need to assess knowledge retention and ensure employees are equipped with the skills they need.

    Let’s make sure Beth is armed with all the ammunition she needs to achieve her goals.

    The Conversation

    Manager: Beth, what training have you reviewed about the features and benefits of credit cards?

    Beth: There was a session in my customer service training program.

    Manager: How beneficial was that session for you?

    Beth: It was good.

    Manager: Fantastic. Can you share some of the features and benefits you’ve picked up regarding credit cards?

    Beth: We have 4 types of cards to offer….. [Beth demonstrates her knowledge, impressing you with her proficiency.]

    Manager: Excellent! It’s clear you’ve grasped a good deal about our credit card options. Now, what resources do you feel comfortable using when discussing credit cards with customers?

    Beth: I could use the Build Your Credit Card site. It’s helpful and easy to use.

    This conversation unveils valuable insights. You now know that Beth possesses the necessary knowledge and is familiar with a useful tool. But is this enough to ensure her success, or is there more to be done? Let’s explore further.

    Step 3: Documentation and Growth Plan

    System: Create a structured process for documenting Beth’s progress and outlining growth plans.

    Method: Engage in regular discussions and document her achievements, areas for development, and set clear, actionable growth goals. Start the documentation process right from the beginning, covering the goals, commitments, discussions, and progress. Repeat this step at every stage of the performance management cycle. Keep it straightforward and uncomplicated, unless you find yourself managing underperformance, which will require more detail. Don’t forget to provide Beth with a copy of the documentation.

    Sample documentation:

    • Beth’s Commitment: To achieve 1 credit card sale per week.
    • Key Observations: Beth exhibits a strong understanding of credit card features and benefits but needs to further develop her conversation skills.
    • Action Plan: Beth will shadow Sally for 2 hours tomorrow afternoon, focusing on observing and taking notes on how Sally engages with customers regarding credit cards. Over the next week, Beth will implement new scripting techniques when interacting with customers.

    With just a two-minute note-taking session, you have laid the foundation for smooth progress into the next phase. This documentation ensures clarity, tracks performance, and provides a structured path for Beth’s growth and development.

    You can download this sample template for documentation at each stage of performance management.

    Step 4: Ongoing Feedback and Coaching

    System: Effective performance management truly comes into play during the follow-up phase, where success can either flourish or flop. The lack of regular follow-up often leads to the failure of even the best-laid plans. Establish a schedule for regular feedback and coaching sessions, with the frequency tailored to the employee’s specific needs. For instance, Beth might require daily follow-up for a few weeks to establish a strong foundation, which can then be scaled back to weekly and, eventually, monthly check-ins.

    Method: Engage in open and honest conversations during check-ins, offering constructive feedback and guidance to help her continuously improve. To enhance your coaching, communication, and feedback skills, refer to these three helpful articles on giving effective feedback, difficult conversations, and tips for coaching.

    Check-in Conversation

    Manager: [Reviewing the tracking results, it appears that Beth didn’t achieve any credit card sales this week.]  Good morning, Beth. How did your week go in terms of credit card sales?

    Beth: [Hangs her head and mumbles.] I didn’t sell any.

    Manager: I see that. To achieve a ‘standard’ performance rating, meeting this target is crucial. Let’s look at what might be getting in the way. Tell me, what did you learn from shadowing Sally on Tuesday?

    Beth: Sally makes it look so easy. She seems to ask without being pushy.

    Manager: What specific phrases or approaches did you notice Sally using effectively?

    Beth: [Provides several examples] I tried, but it just doesn’t come out the same way for me.

    Manager: How would you say it, Beth?

    Beth: I’m not sure.

    Manager: Take time to think about the words you would be comfortable using. Create three scripts you can use to initiate conversations with customers. We’ll meet tomorrow, and you can practice them with me to gauge how they feel.

    Beth is still struggling with her approach, which is entirely understandable. Still, she must recognize that she needs to actively work towards meeting performance expectations, starting from the outset.

    Each subsequent follow-up conversation should build upon the previous one. During your next meeting with Beth, inquire about the scripts she devised and have her try them out with you. Seek her commitment and, if possible, observe some of her conversations to provide more targeted guidance.

    Sample documentation:

    • Beth’s Commitment: To achieve 1 credit card sale per week.
    • Key Observations: Beth observed Sally’s techniques but is struggling to adapt scripting to her own style.
    • Action Plan: Beth will compose three customer interaction scripts related to credit cards. We will conduct a role-playing session on Tuesday at 9:00 AM to practice these scripts.

    With these systematic documentation, feedback, and coaching processes in place, Beth’s progress and development are more effectively monitored and guided towards success.

    Step 5: Reward & Recognition

    System: Establish a reward system linked to credit card sales milestones. Reward and recognition are powerful; everyone desires appreciation for their contribution. One of the leading causes of disengagement among employees is feeling unappreciated. And appreciation should extend beyond the promise of a year-end bonus. That’s like saying you can have ice cream a year from now if you start a diet today.

    Method: Recognize Beth’s achievements through various means, such feedback, team shout-outs, small incentives, or special recognition events. Celebrate her accomplishments each week when she meets or surpasses her credit card sales targets. Equally important, provide positive feedback when you observe her engaging in productive conversations with customers, even if these conversations do not result in immediate sales. This reinforces that she’s doing the right thing and will keep the customer conversations flowing.

    Consider the following tips for effective recognition:😃
    • Make recognition a habitual part of your daily routine.
    • The most effective recognition is frequent, consistent, personal, and meaningful.
    • Recognize desired behaviors and progress, not just final results.
    • Leverage any existing reward and recognition programs offered by your company.
    • Small gestures and perks can have a lasting impact.
    • Encourage employees to appreciate each other.
    • Keep in mind that feedback is a potent means of recognizing employees’ efforts and contributions.

    Step 6: Periodic Performance Assessment

    System: Plan for periodic performance reviews to evaluate Beth’s overall performance and credit card sales achievements. Rather than waiting for an annual review, I suggest a quarterly formal update.

    Method: Conduct formal performance assessments, highlighting her successes, addressing challenges, and collaboratively setting new targets. There’s no need to start from scratch here. Utilize the documentation you’ve diligently recorded during your follow-up and coaching sessions.

    Step 7: Adapt and Evolve

    System: Remain flexible to adjust goals and strategies based on Beth’s progress and changing circumstances. This is not to say you change course with every little bump in the road, but don’t ignore significant roadblocks to achievement.

    Method: Continuously adapt her approach through collaborative discussions to ensure she remains on the path to success, even in changing conditions.

    With a system and method firmly established, Beth’s path to excellence in credit card sales gains structure, depth, and adaptability. This isn’t just about setting targets and recording outcomes; it’s about encouraging and supporting growth, celebrating milestones, and responding to the ever-changing landscape. This, my friends, is the essence of effective performance management in action. So toss out the conventional review process and replace it with an efficient system and unwavering approach. Your employee’s success depends on it.

    Ponder Points

    Do I consistently engage in ongoing performance discussions with my team, or primarily rely on annual reviews? How can I integrate more frequent feedback into my management style?

    What system do I have for setting clear performance goals and documenting progress? How can I refine this system to make it more effective and efficient?

    Is recognition and feedback a regular part of my interactions with team members? How can I enhance the way I acknowledge their efforts and contributions on a day-to-day basis?

    Am I actively identifying areas where employees may need additional support or training, and how am I addressing those needs?

    Do I have a process for periodically reviewing and adjusting performance goals and plans to adapt to changing circumstances or priorities?

    How can I strengthen my coaching and development efforts?

    Share your thoughts and tips for effective performance management.

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