On this page

Protect Your Business

Employsure can help you better understand

Effective Performance Management Strategy Check List

Published December 07, 2020 (last updated June 9, 2022) - NZ Operations Manager
Manager coaching an Employee

For most business owners, performance management implies managing an employee’s poor performance. In fact, performance management should be about getting employees to perform to their maximum potential. If an effective performance management strategy is in place, then any underperformance will be significantly reduced, as the employee will be more engaged and ultimately more productive, and also more likely to stay with the company –  which will reduce costs associated with staff turn-over and replacement.

The key to successful employee management is shifting from evaluating performance retrospectively, when feedback may no longer be relevant or actionable, to empowering the employee to reach future goals and grow within the business by providing continuous informal feedback and coaching to help them develop.

Care must be taken that the feedback given is constructive and actionable, so that the employee does not feel they are being pressured or micro-managed. The aim is to provide informal frequent feedback on how to meet goals and improve skills, and to reward employees with promotion pathways and additional benefits and incentives as they progress.

What Steps Do I Need To Take To Implement An Effective Performance Management Strategy?

1. Clearly Define Roles, Manage Expectations, And Set Goals

An effective performance management strategy requires an agile, pro-active approach from the initial recruitment and induction of a new employee, where it is important to set expectations as to what the role entails and what standards the employee should meet.

Goal setting is essential to managing performance as it positively challenges employees and contributes to employee motivation and accountability, as well as being a means of measuring performance.

The employee must understand the business goals, and how their role fits into the overall business strategy. As the business goals change, changes to the employee’s role should be communicated. If the employee understands their role and how it connects to others in the context of the bigger business picture, it will enable employees to work more effectively.

Employees’ individual goals should align with the business goals. The employer and employee should formulate a plan to reach an employee’s individual goals which can be adapted in response to changing business needs. Managers must understand the employees’ strengths and weaknesses and what drives them to facilitate employees achieving both their job-specific and personal development goals.

In short, the manager should win the employee’s trust by communicating openly and honestly, setting clear expectations, and following through on any commitments made. The employee also requires the means to meet their goals, in terms of resources and training.

2. Motivate Employees To Increase Their Engagement And Therefore Productivity

Many workplaces have had to consider remote work due COVID-19, and employee engagement can be an issue when employees are not directly supervised. Employee engagement is the level of commitment an employee has to their job and the business. Engaged employees have a high level of commitment to the business and can be trusted to deliver consistently high-quality work, and they often go above and beyond expectations.

Engagement can be increased by clearly defining expectations and fostering open communication; providing ongoing feedback, training and development opportunities; offering incentives and benefits to employees; and recognising and rewarding employee achievements.

Engagement is about developing a positive workplace culture, where employees feel they are appreciated and that their contributions add value to the business, and that the business is genuinely invested in furthering their individual development and career progression. Engagement motivates employees to work harder and increase their productivity.

BrightHR helping you manage your people and business

Contact us to find out how BrightHR people management software can help you manage and store your essential employee records and documents.

3. Develop Managerial Leadership And Coaching Skills

To increase employee engagement, managers need to be trained to provide good coaching and professional (not personal) feedback. Feedback should be given at least weekly, but ideally should consist of more frequent communications. Managers should provide continuous informal performance management that is supportive; that is relevant to the employee’s role; and that is tailored to the individual, whilst taking into account the employee’s strengths and weaknesses and incorporating peer and customer reviews (where appropriate). The feedback should offer clear guidance through actionable tasks.

Two-way communication platforms such as internal messaging systems are very effective in providing instant feedback, or a manager can schedule frequent check-ins with individual members of their team.  Frequent contact allows the manager to intervene if there are any negative performance issues before matters escalate. It also allows employees to ask questions or seek assistance before proceeding.

Ideally a business should develop employees from within the business with a view to future leadership. These employees are already a ‘cultural fit’ and they understand how the business operates. Besides reducing hiring costs, it is motivating for employees to continue to perform in the longer term if they have something to aspire to.

4. Develop A Performance Reward And Recognition Program That Rewards Positive Behaviour

Employees who meet their goals and perform well consistently should be recognised for their efforts and rewarded accordingly in order to continue to motivate them to do well. Reward and recognition should take into consideration what employees are likely to want, according to the demographics within the business, and doesn’t necessarily have to be costly. Incentives can take the form of promotional opportunities or financial bonuses, but can also consist of prizes, awards, a gift or even a paid day off work.

Despite a best practice performance management strategy, an employee may still underperform for various reasons. The employer needs to act quickly to determine the reasons and manage the employee’s poor performance before it escalates, possibly by putting a Performance Management or Improvement Plan in place.

Get Workplace Advice Now

Call Employsure now to get free, initial workplace advice.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small- and medium-businesses, with over 5,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

Have a question?

Have a question that hasn't been answered? Fill in the form below and one of our experts will contact you back.

  • This field is for validation purposes and should be left unchanged.

Call Now

0800 568 012

Live Chat

Click here