Performance Management: An Important Tool For Your Business

Performance Management, grow your business, maximize profits for your corporation

Performance management is the process of managing the individual performance of employees in a business, as well as the combination of all employees in a business that leads to the achievement of goals and strategy. Performance management is a must-have tool for small businesses. A performance management system is the tools, systems, and processes to support a performance management program in a business.

Performance Management is an important tool

Performance management is an important tool for any business, and it is a must-have tool for small businesses. The system of performance management is designed to measure how well employees are performing as individuals, teams, and a collective.

Small businesses don’t always have defined roles and responsibilities, which means that multi-skilling employees are important. It also means that a considerable amount of teamwork is required to get the job done – but how do you hold people accountable and ensure that tasks are completed? This is where performance management becomes relevant.

Before you get into hold people accountable there are a few steps that need to be met first:

1) Have you clearly defined what your business strategy is? Is it growth? is it diversification etc?

2) a)Have you communicated this strategy to your staff, b) Do your employees know how this strategy is broken down into achievable tasks (goals)?

3) Have you given your employees the room to give input into the goals?

4) How are you tracking and measuring the goals – do you have a scorecard for your goals?

5) How are you and your employees discussing progress and feedback on their tasks?

6) Are you making sure that your employees have been trained to deliver their tasks?

7) What do you do when an employee does not perform or deliver in their roles?

Once these are defined, you can then start performance management.

How do you ensure that your small business is operating at its best?

This is where your goal process comes in – setting goals for your business is incredibly important. They must be clearly defined and measured – they must be SMART goals. Specific, Measurable, Attainable, Realistic, and Timely.

SMART goals with stretch are what will drive performance. What does this mean?

When you are setting goals for the present, don’t aim to just achieve what needs, try to add in a little extra push to go beyond what needs to be achieved. When this becomes the normal practice in your business, you start creating a culture of high performance, provided that the culture includes support, reward, recognition, and transparency.

Why is feedback such a critical step in performance management?

The feedback process in any organization must be used to ensure that the company is operating at peak efficiency and contributes to the ability to maximize profits in your corporation. When feedback is encouraged, the achievement of goals, managing performance, and even healthy psychological contracts become the foundation of your business culture. When the feedback process is used correctly, it also helps predict problems before they arise and take steps to reduce the likelihood of such problems.

Performance management is a wide topic, with extensive components. If you are looking for more support in your business, start your business with B.E.T, a digital business manager and mentor to guide you on how to grow, improve, transform and sustain your business.

© YVR Consulting Pty Ltd 2024