Why addressing staff performance is vital for SMEs
Written by KBA Director, Colin Wilson
It surprises me how many small and medium enterprises (SMEs) I come across where performance discussions with staff members are missed. While businesses often address staff members who are not performing, they make the mistake of not documenting verbal conversations or having a follow-up process in place. This is where business owners/managers can get into trouble, especially when things go from bad to worse. The staff member can feel they are being picked on and singled out, which can lead to unwanted legal disputes.
When I ask businesses of their performance process, and whether they plan for good review discussions, I constantly hear, “I just don’t have the time”. I also ask, are their conversations constructive, offering praise for good work as well as addressing shortcomings? The response I hear a lot is, “I have to address issues when mistakes are made, or when staff are not performing or motivated”. So my next question is, who is having a greater negative impact on continuous performance – you or them?
Recruitment and wages are two of the biggest, if not the biggest costs for SMEs. It is up to the business owners and/or managers to ensure team members are always engaged and motivated to do their job, and this starts from day one. Business owners/managers need to be planned and organised to drive staff performance. You employ staff, explain the role and have them sign off on the Position Description, acknowledging their KPIs and KRAs. In their induction, they must read and understand your business processes, policies and procedures. From the beginning you have outlined the expectations, so you have done all you can from your end to motivate them. If this process is done right the staff who don’t perform or don’t want to be there will resign themselves to the fact that they cannot do the job, the ownership being on them. Providing they have been thoroughly inducted, staff members cannot claim to be ill-informed about their work duties and responsibilities.
Some people see performance reviews as a negative, but if done correctly and regularly then they should be seen as an integral part of your business’ commitment to growth. The saying, “Grow your staff to grow your business” is so true, and why staff retention is so important. Staff also want to know how they are progressing in the business. Performance discussions should be a two-way street – the manager needs to address and acknowledge performance and look for areas of improvement and the staff member needs to be challenged. You need to set goals with them and measure the progress from one review to the next.
In today’s world, informal verbal conversations just do not cut it. You need to have a set process or procedure in place on how you will address your staff’s performance and develop a staff plan for growth, retention and performance. This needs to be consistent across the company and the focus must be linked to the goals of the business and the individual.
Regular staff and team catch-up meetings are healthy for a business, especially SMEs. These meetings are about the company driving performance as a team and making sure everyone is on the same page. Also, a good manager should conduct one-on-one discussions with staff throughout the month, to ensure they are on the right track in achieving their goals and supporting them on the job by offering tips or training. This is where your leadership, coaching, managing and mentoring stand out.
Employee engagement is key. Staff who want to learn and grow normally are very challenged within their role. They need to do meaningful work and want to be on a winning team, so create an environment which has a performance review structure that works for you and the business. Don’t ever assume your staff are happy. Most importantly, make sure your leaders are happy. In some cases where I work with business owners, they expect their managers to conduct performance reviews to grow their team, yet the business owner fails to do a review with their managers. The best businesses I work with have structured one-on-one discussions, regular performance reviews and set goals with their staff. It all starts from the top; drive and train your managers to drive and train your staff. The better this process is, the better staff performance and retention is.
Do not underestimate having good performance discussions with your key staff (the ones that always get missed). If your performance plans and reviews are done right, then expect to be challenged by your key staff members, especially if they are over-achieving. Staff who are excelling at their job and who are going above and beyond expectations are the ones we want to keep. They will be fully engaged in your business, awaiting their next big opportunity, so make sure there is a future leader’s development plan in place that will allow them to be future managers and stakeholders in your business. Showing a real interest in the career of your staff members and rewarding strong performance are some of the best things you can do to keep your staff happy and continue to drive great results.
If you would like more information on how to get this process working in your business, please contact Key Business Advisors on 1300 4 ADVICE or email info@keyba.com.au.
