Learn more about the processes, initiatives and habits of enterprise businesses, and how you can adapt those processes to help your small or medium business run better.
Regardless of how many hours a week your employees work, or how many years they have been on your team, it’s a good practice to have regular performance evaluations. The success of a business ultimately depends on the individual performance of each employee, so it’s important to create a process for evaluating and monitoring key goals to keep everyone on track. Here are a few tips for setting up an effective performance management process:
Set goals for employees
When employees first begin, part of their onboarding and training should include establishing specific performance goals so they know what to focus on. Goals can be performance-based (sell at least 5 cars this month), focused on quality or customer service (make sure customers wait no more than 10 minutes to be served), or they can be focused on organizational goals (allocating time to experiment and develop innovations). Regardless of the goal type, make sure goals are SMART—Specific, Measurable, Achievable, Relevant to the employee’s position, and Time-based. (Check out the Be It Resolved series for more information on goal-setting.) Goals should be periodically revisited and mentioned in team meetings to make sure they stay top of mind.
Hold team meetings
Another way to encourage staff to continually improve is to hold regular team meetings, even if it’s just 10 minutes before opening. Restaurants often do this to go over the menu for the day and to allow each person on the team to taste the specials. Holding an informal team meeting is a great way to remind employees what you’d like them to focus on, go over anything that has changed recently, and to give feedback on how the team is performing. Meetings also provide opportunities for employees to learn from each other and to celebrate positive behaviors.
At your next team meeting try asking some key questions that foster the right culture such as:
- Does anyone have a suggestion for how we can encourage repeat business?
- Did anyone try something new to increase sales?
- Who would like to report a coworker doing something awesome?
Asking questions subtly lets employees know that you expect them to take ownership of the culture and to always be looking for ways to improve performance and the customer experience.
Set development goals to improve weaknesses
Employees in the same jobs or positions should be held to the same performance standards to ensure fairness. That said, every employee is slightly different and brings a different set of skills to the job. Each employee should have at least one development or “stretch” goal to improve a weakness. Ask the employee to identify at least one skill related to their job that they want to improve. This helps get buy-in from the employee and helps ensure the performance management process is a two-way conversation. Come up with an informal plan with the employee to help them work on the weakness: shadowing a more senior employee, taking a training course, or simply spending an entire work day practicing a skill. As with all goals, spend the time to identify behaviors or outcomes that will demonstrate progress so you know how to measure success.
Reward staff for meeting or exceeding goals
There’s a saying in performance management—you get what you reward. Goals will ultimately be ignored if employees are not held accountable for them, both negatively (through warnings) and positively (through rewards). Rewards can be financial such as a raise or commissions for sales above a target goal, but they don’t have to be. Non-financial rewards can be extremely effective at motivating staff. Consider using methods to engage and motivate staff such as offering time off, flexible hours, the ability to vote on the dress code, allowing them input on other mandatory policies, or discounts on products or services. Similarly, make sure to offer positive feedback when you catch an employee doing something well, especially if the task was difficult such as dealing with an unhappy customer. Positive feedback is a highly underestimated reward—it lets the employee know the boss noticed them doing something right and is an intrinsic motivator.
Establish best practices for your business
Look at your data to figure out which employees sell the best. Software, such as Clover Insights, makes this analysis easy, but you can also determine top-performing employees by examining who earns the highest commissions, the best tips, or who is working when the ticket sales are highest. Make it a point to be present when this employee is working, and take note of any behaviors the employee consistently does that appears to improve sales such as greeting customers soon after they walk in the door. Then ask the employees what they think they are doing differently. Often listening to front-line employees gives you insight into what works and doesn’t work in your business.
Once you have an idea of the key behaviors that help drive sales, train staff to follow the same process so the entire group improves. These behaviors should be part of employee goals.
Take note of what characteristics make this employee a top seller. These characteristics are what you should look for in employees when hiring, so make them part of the job description and vetting process. (See Taking the Work Out of Finding Great Employees and How to Use Personality Styles to Train Employees for more ideas on finding and coaching exceptional employees.)
Don’t be afraid to let some people go
Sometimes employees just don’t work out, despite your best efforts to coach them into higher performance. If it’s not working for you or for the business, ultimately it won’t work for the employee either, so don’t be afraid to let some people go.
For more ideas on how to improve the performance of your business, check out Enterprise Behavior: Performance Reporting.[image: Pub by Kamal Hamid on flickr]