Many small business owners think of formal employee performance management as "overkill" administrative activities that they can put off until their business gets bigger. After all, you spend every day working closely with your employees. Why should you implement a formal process that adds administrative burden and stress?
Actually, a good deal of research shows that effective employee performance management enhances employee morale and performance, and helps drive better business results. As a small business, you likely can’t afford to ignore any program that is proven to help you better run your business. And it isn’t as hard as it may seem.
3 Basic Performance Management Practices
There are three basic performance management practices every company, regardless of its size, should have in place to gain advantages in human capital.
1. Individual Goals Linked to Organizational Goals
Developing a business plan and strategy with goals and milestones is an accepted business practice that most small businesses employ. You can take this strategy a giant leap forward by tying your employees’ efforts to your business strategy. You can do this by helping them plan individual goals that support your larger business goals and by clearly defining what you need them to know and do to achieve them.
For Example: If your overall strategy is to position your business as a leader in customer service, your receptionist might have a goal of answering the telephone on the first ring. Your field service representatives may have a goal of reducing equipment down time by 20%. And your customer service representative may have a goal of responding to complaints within 2 hours.
