Insubordination

Employee Performance

Managing Poor Performance

In addition to managing their business, employers also have to manage staff and their performance. Business owners and employers need to consistently address performance instead of relying on once a year reviews and discussions. Underperformance or poor performance can lead to low productivity, low morale, and conflict among workers. Poor performance is not just a reflection on the employee but it is also a reflection on management and leadership. In this guide, we outline what constitutes poor performance, understanding potential reasons, and ways to manage poor performance. Understanding poor performance Poor performance is when an employee fails to meet the expectations of the job. They can be underperforming when they don't hit certain milestones or goals. Poor performance can also be related to employee behaviour and their general attitude at work. Poor performance or underperformance often shows up as: Failure to do the duties of the role or meet the standard required Non-compliance with workplace policies, rules or procedures Unacceptable behaviour at work Disruptive or negative behaviour that affects co-workers Underperformance doesn't just affect an individual employee, it has a ripple effect on co-workers, team morale, customers, and ultimately business productivity. Reasons for poor performance Nobody wants to perform poorly. There are usually reasons behind poor performance or underperformance. Some common reasons include: Burnout or lack of general well-being Workplace conflict Lack of motivation Skill gaps Personal problems Lack of clarity around job role and duties Lack of communication around targets and goals Cultural differences and misunderstandings Understanding the root cause of poor performance can help you address it effectively. Signs of poor performance Business owners and employers have a lot to keep track of. It can be challenging for them to identify poor performance but some intentional observation can help separate poor performance from occasional mistakes. Your employees are human beings so they are bound to make mistakes. It is crucial you know the difference between a mistake and consistent underperformance. Here are a few signs that can help you recognise poor performance: An employee failing to accomplish their KPIs/goals/milestones for a month or more at a time. Failing to hit KPIs consistently can be a red flag. An employee is having consistent conflict with co-workers and leadership. An employee is regularly submitting subpar work. An employee is becoming defensive and failing to implement changes. Poor performance vs misconduct Underperformance is not the same as serious misconduct. Serious misconduct includes deliberately unprofessional, dangerous or unlawful behaviour, such as theft, fraud, sexual harassment or assault, which may warrant instant dismissal. Managing poor performance Best practice for managing poor performance may look different for different employers. However, there is one common element that all businesses and employers should keep in mind. Having a clear policy around performance improvement and performance management can help reduce confusion, establish a fair process, and set clear expectations among employees. Poor performance or underperformance is not likely to go away on its own and other employees may lose motivation if they have to constantly carry the burden of poorly performing colleagues. The steps to manage poor performance are: Identifying the problem- Poor performance is not the same as a mistake or an error. It needs to be a pattern of behaviour that has been observed by the employer. Before you can address underperformance, you need to write down the examples of the behaviour and the action causing the issue. Note the frequency of the occurence and details such as dates and times. Explain why it is an issue and specify the impact. Mention changes and improvements that can be done to fix the problem. Any documents or statistics such as business stats, KPIs, customer feedback should be included in this. Have copies of this entire record to give to the employee. Assessing the problem- Once you have identified the problem, consider the severity, the duration of the poor performance, and the gap between expectations and delivery. By assessing the problem, you can prepare for potential solutions and pathways. Getting HR support- Having an HR expert involved early in performance problems can ensure you avoid any misunderstandings and confusion. An HR partner can help you in understanding the policies, explain it the employee, and discuss next steps. HR can also help in determining the appropriate time to discuss and correct the issue. Should you consider a performance improvement plan (PIP) or a performance management plan (PMP)? Whatever the problem is, HR is an excellent support to have for business owners and employers. Meeting with the employee- Organise a face-to-face meeting with your employee to discuss poor performance. Let the employee know about the reason for the meeting in advance so they can adequately prepare. If you will be referring to documents to back your concerns, provide copies to the employee before the meeting. Inform the employee they can bring a support person of their choice to the meeting. The support person is to be present at the meeting but not speak or advocate for the employee. The meeting should take place in a private and comfortable environment. Being professional in the meeting- During the meeting, things may get emotional. However, you need to be professional and calm. Clearly describe the problem without getting personal or aggressive. Do not use phrases such as 'You always' or 'You never.' Explain the impact on the business, the employee's work, and co-workers. Outline the outcomes you hope to achieve from the meeting. It is essential you make the employee feel safe and listen with an open mind. Ask questions to understand the context and the circumstances. Having a plan- Once the problem has been discussed, work together with the employee to find a solution. Employees will be more motivated to improve their performance if they have contributions in the solution. While developing a situation, ensure that: the employee understands clearly the changes required the employee contributes solutions and improvements the employee has been offered appropriate support and assistance such as training, mentoring, or adjustments there is a set date for follow-up meetings Recording the actions in a PIP- A document that outlines what the employee needs to improve their performance is a way to avoid miscommunication. The PIP will clearly identify what needs to be improved or changed, how it will be changed and any support that is to be given. The PIP gives the employee reasonable time to improve their performance and it clearly mentions the possible consequences if the employee's performance does not improve. Monitoring the situation- It takes more than one meeting and conversation to resolve poor performance. Employers should regularly check-in with the employee to discuss progress and any obstacles. Continue to give them feedback and encouragement. Remember to be flexible and give time to the employee to improve their performance. Dismissing an employee for underperformance Employers cannot dismiss their employees in circumstances that are 'harsh, unjust or unreasonable.' What is harsh, unjust or unreasonable will depend on the circumstances of the case. You must have a valid reason for the dismissal relating to the employee's capacity or conduct and follow a fair performance management and dismissal process. Before dismissing an employee, provide the employee with written reasons why you are considering dismissal and give the employee a reasonable opportunity to respond to those reasons. A failure to follow these steps before dismissing an employee may result in an unfair dismissal claim against you. It's important that before dismissing an employee you can show you have: told them the purpose of performance meetings in advance and allowed them to prepare told them they could have a support person present clearly outlined the expected level of performance and the improvement that was required clearly warned them that their performance needed to improve gave them time and support to improve their performance told them that they may be dismissed if their performance didn't improve HR and WHS support for businesses Peninsula works with small business owners and employers, supporting them in HR and WHS matters. Our advice team provides access to customised resources, documents, and advice in issues such as performance management and dismissal. Call us on 1300697028 to learn how we can help you.

Employee Performance

Performance Management

Your business’s workforce is probably its biggest expense, which means you’ll want them to hit certain targets and perform at the highest level. Performance management is a process focused on exactly this – evaluating an employee’s individual strengths, weaknesses and contribution to the company’s wider goals. Performance management looks at an employee’s present and the future, celebrating wins, identifying opportunities for improvement, and giving them a clear path to reach their full potential. This guide gives an overview of employee performance management and explains the advantages of using it effectively. It also offers practical tips about how you can build several proven performance management frameworks into your business. The performance management process Managing an employee’s performance includes all the measures taken by a business to ensure they are getting the best out of their employees. This can involve an in-depth analysis of an employee’s performance (normally compared against team and company goals), giving constructive feedback and co-creating plans with the employee to enhance their future performance. In cases of underachievement, the performance management process can also involve more urgent processes, including performance improvement plans (PIPs), which often result in disciplinary procedures or even dismissal if employees fail to meet the expectations placed on them. What are the benefits? While performance management is not mandated by employment law, many businesses are realising the benefits that come with having robust performance management systems in place. These include: Provides clarity Without a clear understanding of what their individual objectives are, employees can easily underestimate their contribution, become demotivated, or work haphazardly without a sense of intention. Performance management not only makes your expectations clear, but also emphasises the importance of the employee’s efforts. Crucially, it’s a collaborative process that ensures team leaders and subordinates are on the same page when it comes to deliverables and goals. For things to work, everybody needs to be pulling in the same direction. Enhances efficiency A performance management strategy can help ensure your business’s workforce and resources are properly aligned with achieving its wider objectives and strategic goals. It can also help to identify responsibilities and company processes which may be creating inefficiencies. In the broadest sense, performance management isn’t just about improving individual performances. It’s also about using information gathered from staff appraisals to fine-tune the functionality of your business as whole, one piece at a time. Engages employees When employees have clarity about what’s expected of them in their role, it allows them to self-assess and take charge of their own professional development. Goal setting can give employees a sense of purpose, which keeps them motivated, leads to greater job satisfaction, and reduces employee turnover. Improves decision-making When analysing their team members, managers cannot help but interpret performance through a lens of unconscious bias. A performance management system will provide hard data about what an employee has and hasn’t achieved. This gives managers the facts, allowing them to make objective, data-backed decisions about how to improve their team. Helps plan for training needs The performance management process will invariably reveal that some employees require support with developing specific skills. Training sessions can be tailored to match the needs of underperformers, helping them to improve outputs in particular areas of their role. Learning and development (L&D) and HR teams can also use the information gathered from performance reviews to effectively plan for training programs targeting individuals and different departments. Performance management strategies In order to maximise on the potential of your staff, your business should build a holistic, companywide performance management strategy. Your performance management strategy should aim to develop an environment which encourages continuous growth and a culture of high performance. A well-rounded strategy will normally consist of several core phases: Conduct formal employee appraisals, either annually or more frequently. Set goals with key results that contribute to your wider business objectives. Provide ongoing feedback through regular check ins. Coach staff and offer career development opportunities. Address poor performance as soon as you notice it. Reward, recognise and praise high-level performance. How can you manage employee performance? Managing an employee’s job performance is hard and the simple fact is that there’s no ‘one size fits all’ solution. However, there are certain steps every business should take to ensure their performance management strategy has a strong chance of succeeding. The first step is to use the job description for a vacant role to proactively establish what is expected of the new employee. During the interview process, an employer can outline any baseline targets, goals and deliverables based on the job description. Once hired, an employer can then compare the employee’s work against the performance criteria of the job description, determining if expectations and company standards have been met. Ideally, individual goals should align with company objectives, and can be measured through key performance indicators (KPIs). KPIs can be included in the employee position description and will help to establish clear, quantifiable expectations about employee outputs. Annual performance reviews Performance reviews are one of the most popular methods for managing employee performance. Employers use performance reviews to gain a comprehensive understanding of the employee’s contribution throughout a set time period. Normally performance reviews are annual, analysing work over a 12-month period. However, they can be conducted more frequently, leading to a pro-active performance approach that prevents issues from escalating. Most performance review processes include stages of planning, coaching, review, and feedback. To cover all stages, be sure to check off each action on this list: ✔ Provide the employee with specific details that support whatever claims you make, both positive and negative. ✔ Bring an agenda to the review and invite employees to do the same. Review all important parts of the appraisal, highlighting both struggles and successes. ✔ Offer feedback and coaching on how the employee can improve on their weaknesses. Also be sure to acknowledge their successes. ✔ Point out exactly what made each component a success. Employees can use this feedback to improve other areas of their performance. ✔ Highlight where the employee’s skills and performance align with the organisation’s goals and mission. ✔ Work together with the employee to create a plan for addressing shortcomings and improving their overall performance. Include specific goals and actions, removing any confusion or ambiguity. ✔ Wherever possible, link any goals or expectations to a tailored training program. It’s vital that the employee feels the progress you’re asking of them is achievable. 360-degree feedback It is commonly believed that the manager or supervisor should be the primary source of evaluation, with most feedback coming directly from these positions. However, the 360-degree feedback process takes performance reviews one step further. This type of feedback includes evaluations, observations, and comments not only from managers and supervisors, but also co-workers, customers and even subordinates. A self-evaluation is also an important part of the 360-degree feedback process. By collecting feedback from all these sources, both you and the employee will get a comprehensive understanding of the employee’s performance. Certain team members or stakeholders may provide useful feedback that others cannot, offering a more complete picture of the employee’s impact. Continuous performance management Many businesses have come to realise that the traditional performance management model, centred around annual reviews, is inherently flawed. In the fast-paced world of modern work, they are turning instead to continuous performance management (also known as agile performance management). Continuous performance management is defined as a series of ongoing performance management processes that take place throughout the year. It’s a holistic, continuous cycle which involves: Planning (setting KPIs that indicate progress toward goals and key results). Frequent check ins (open communication and coaching whenever needed). Regular reviews (transparent feedback as often as is needed). The continuous performance management cycle helps employers guide and coach their staff with real-time feedback before performance-related problems are reached. Plus, the interactive dynamic of this approach helps build an open and healthy relationship between managers and employees. Management by objectives Management by objectives is another framework for managing employee performance. This involves breaking down organisational objectives to identify what each person needs to achieve. For the most effective outcome, employees and managers should collaborate and work together to agree on new goals and objectives. These goals and objectives should be specific, with quantifiable outputs and deliverables produced over a set timeline. However, employers should be wary of only measuring the quantity of an employee’s work. Remember, the quality of what they deliver is just as important! If you decide to manage employee performance by objectives, it can be helpful to use a ‘top-down’ approach. This involves using the established organisational goals and values to shape individual goals. Employees following a top-down approach will understand how their contribution fits in with organisation as a whole and often work more effectively. Managing poor performance It’s an inescapable fact of performance reviews that not all evaluations will be positive. It’s simply not possible for all employees to always perform at high levels. Management of poor performance calls for tactfulness and sensitivity, but you should also be direct and upfront. Here are some simple practical steps to follow: The best way to manage underperformance is head-on. Don’t procrastinate or dance around the issue, since the employee may fail to recognise there is a serious issue. Be specific with the employee about where their performance is lacking. For example, give examples of when they have not met your expectations and what you require in the future. It’s important to document all conversations about performance. This may begin with the employee receiving a record of your concerns, highlighting what they need to do and a deadline (often called a verbal warning). Follow up after an initial conversation. Check on the employee’s performance over the next several weeks and provide feedback and coaching to help them meet their goals. Employers can consider formal performance management processes if the underperformance issues continue. They may include written warnings and/or a performance improvement plan (a document outlining the issues, what is required and by when, as well as how they will be measured). You can look inwardly at how you handle tough situations. Strengthening your own communication and coaching skills may increase your chances of effectively inspiring and developing employees. Strategy checklist Are you ready to welcome a performance strategy into your organisation? This step-by-step performance plan will help: Step 1: Planning Meet with the employee to set initial performance objectives. Work together to set measurable goals that will help maximise the employee’s contribution to your overall business strategy. In order to ensure continuous improvement, you should revisit and reassess these goals periodically. Step 2: Monitoring Monitor employee progress frequently and avoid waiting until the annual performance reviews to conduct your evaluations. Ongoing informal feedback providing actionable suggestions will allow you to address any developing issues in real-time. Step 3: Training Simply highlighting an employee’s underperformance isn’t enough. It’s vital that you provide any training or support needed to address the employee’s weaknesses and elevate their level. Step 4: Reporting Share and discuss your findings with the employee so they are completely clear on any improvement plans. It’s best practice to document these discussions in a formal appraisal record. Step 5: Celebrate wins Positive reinforcement might be the key that unlocks your employees’ optimum performance. Don’t hold back when it comes to celebrating wins and vocalising your appreciation. If you want staff to maintain high standards, it’s crucial they understand that their efforts are valued. Step 6: Reward Giving performance-related incentives (such as bonuses or commission) can motivate staff to push the boundaries of their skills and capabilities. This is good for the employee’s professional development and good for the business. Create the conditions for success Are you struggling to align employee efforts with your company mission? A performance management strategy can help create an environment and culture where everybody shares the same vision and works toward goals that help the business thrive. Peninsula actively helps thousands of Australian businesses get the very best out of their staff.Call our advice line on 1300697028 to find out how we can help you.

Employee Performance

Misconduct Versus Poor Performance

It is important to know the difference between misconduct and poor performance. Confusing the two could mean your approach is completely wrong. The main difference is in the level of control the employee has over their performance. Poor performance is when an employee tries as hard as possible but keeps falling short because they lack skill, ability or training for example. In cases of misconduct, the employee could perform better but for whatever reason deliberately chooses not to. Poor Performance Often these employees are unaware they are not performing well and are unlikely to initiate change. Poor performance or underperformance usually shows as a failure to do the duties of the role or to meet the standard required because the employee lacks the required skill, knowledge or training, or because the employee does not know what is expected of them. If you do not address poor performance early, it could become more serious and start to affect the productivity and performance of the whole business. Misconduct Misconduct is wilful and deliberate breach of company policy or procedure. Misconduct may potentially give grounds to an employer to take disciplinary action against an employee, up to and including dismissal. General misconduct includes the following: Non-compliance with workplace policies, rules or procedures Unacceptable behaviour at work Disruptive or negative behaviour that affects co-workers General Misconduct usually reflects a disengaged, unmotivated employee whose behaviour may include the following: Lateness Poor presentation Unexplained absences Inappropriate behaviour towards other employees that affects their job Misconduct can also be more serious behaviour and, at worst, is gross or serious misconduct, which is when the employee deliberately and wilfully behaves a way that undermines their employment, and that can cause a serious and imminent risk to someone’s health and safety or the reputation, viability or profitability of the business, for example: Assault Abusive behaviour such as bullying or harassment Leaking confidential documents or information Drinking or drug abuse at work Corruption Theft Peninsula works with business owners and employers to analyse employee performance, review misconduct, and implement performance management strategies or disciplinary processes.Call our team on 1300751653 to find out how we can help you. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Employee Performance

Key Performance Indicators (KPIs)

Key performance indicators (KPIs) are a quantifiable measure used to evaluate a company’s overall performance. It’s also common to assign key performance indicators to specific teams and employees. This helps business leaders track how well each part of the business is functioning and contributing toward the company’s wider goals. It’s important to understand that key performance indicators are not goals within themselves. Instead, they are a means to express what a business wants to achieve, when it wants to achieve it, and whether or not it is on track to do so. Before this guide goes into deeper detail, here are the high-level facts about KPIs: Key performance indicators measure a company’s success vs. a set of targets, objectives, or its competitors. KPIs can measure a business’s financial health. Financial KPIs include gross profit margin, revenues minus certain expenses, or the current quick ratio (liquidity and cash availability). Customer-focused KPIs generally centre on per-customer efficiency, customer satisfaction, and customer retention. Sales and marketing KPIs will track lead generation, cost per lead, customer acquisition, and conversion rates. Process-focused KPIs aim to measure and monitor operational performance throughout the organisation. Businesses generally measure and track KPIs through analytics software and reporting tools. The business benefits of key performance indicators From reviewing employee performances to tracking a team’s progress with a long-term project, there are a number of reasons why having KPIs is essential your company’s growth. Strategy: Setting the right key performance indicators forces your business to think strategically about what its most important goals are and, crucially, what it will take to reach them. The process of setting KPIs will help you identify your biggest opportunities, areas for improvement, and where specifically you should allocate your business’s time and resources. Accountability: Without KPI’s revealing vital statistics about performance, you run the risk of making inaccurate decisions about teams and specific employees during performance reviews. An employee may have a high productivity rate, but a low KPI. For instance, a member of your sales team may be making a high volume of calls each day but converting at a very low rate. KPIs give you the detail needed to analyse performance in depth, as well as the data to back up your conclusions. Essentially, KPI’s encourage accountability for teams and employees who are not performing and reaching their goals, and employers when KPI’s found to be unreachable. Boost morale: For your business to be productive in the long-term, it’s vital to keep your employees motivated and give them a sustained sense of job satisfaction. It can often be difficult to keep momentum when set targets can only be achieved once a quarter or once a year.Receiving positive reports for meeting certain KPIs can help keep your staff motivated in the interim. The results are often instant. This gives them a sense of purpose and keeps them focused on meeting their goals. Become data-driven: KPI’s provide an immediate snapshot of the overall performance of your company, as well as a wealth of data that can be used to make well-informed decisions. The real-time data that KPIs provide allow you to make systematic adjustments so that you’re not left making frantic changes at the end of each month to reach your goals. Rather than making important decisions based on a hunch or somebody’s ‘best guess’, KPI data allows you to understand what’s happened in the past, what’s likely to happen in the future, and, most importantly, what you should do now to reach your goals. Why are employee KPIs important? Setting key performance indicators for your employees makes it crystal clear which outputs or outcomes they are expected to attain in their role. In some cases, bonuses and commissions are structured around key performance indicators, giving staff an extra incentive to perform at a high level and reach team and individual goals. Having employee KPIs can also help you measure performance and develop your staff, identifying strengths, weaknesses, and opportunities for improvement. When it comes to managing underperforming staff, KPIs give both you and the employee a benchmark for improvement. If the employee continuously fails to meet their KPIs, you should actively manage their performance with targeted training and a performance improvement plan. As an employer, it’s important be upfront and transparent with KPIs. The employee position description should include any important key performance indicators that you plan to regularly measure. This will help to set expectations between you and your employees from the moment they start working with the company. Types of KPIs Key performance indicators come in many forms. While some are used to track weekly progress toward a specific milestone, others have a long-term focus. The one thing all KPIs have in common is that they’re tied to specific business goals. Here’s an overview of some of the most widely used KPIs: Strategic: These KPIs address the ‘big picture’ and measure company-wide goals. Business leaders and board members tend to monitor one or two strategic KPIs to decide how well the company is performing as a whole. Examples of strategic KPIs include net profit and market share. Operational: Measuring performance over a shorter timeframe, operational KPIs are focused on organisational processes and efficiencies. Some examples include return on investment of ad spend and cost per lead. Functional unit: Many KPIs are linked to specific business functions, such IT or finance. Finance KPIs might track gross profit margin, while IT KPIs might track page loading speeds or website down time. These functional KPIs can also be categorised as strategic or operational. Leading and lagging indicators: Whatever KPIs you choose to use, make sure you understand the difference between leading and lagging indicators. While leading KPIs can help predict outcomes, lagging KPIs track what has already happened. Businesses often use a combination of the two to ensure they’re addressing both past performance and projections for the future. Setting SMART KPIs The key to setting good performance indicators is to identify desired outcomes for the business and then isolate the ways and means employees can meaningfully contribute to reaching them. Using the SMART criteria is an effective way to assist in drafting KPI’s for your business objectives. Each letter of SMART outlines certain criteria the KPI should meet: Specific: Is the objective specific enough? Measurable: Can the progress be quantified or easily measured? Attainable: How realistic is the goal? Can it be achieved within a reasonable timeframe? Relevant: Is the goal relevant to the needs of the business? Does it improve performance? Timeframe: How much time is needed to achieve the goal? Can it be done within the given timeframe? What are some examples of SMART KPIs? To give some examples of SMART KPIs, the owner of a bicycle shop may set the following goals for employees: Sell 500 bicycles per month. Increase customer survey satisfaction scores by 10% within a financial quarter. Increase total number of customers by 5% in each financial quarter. Increase total revenue from sales of bicycle accessories by 25% in the financial year. These KPIs all meet the SMART criteria – they are specific, measurable, include a clearly defined timeframe, will contribute to business goals, and presumably are reasonably attainable. Business department KPIs Below are some common examples of key performance indicators, segmented by business departments: Marketing KPIs: Number of new leads. Cost per lead. Customer acquisition cost (CAC). Return on ad spend (ROAS). Email open and click through rates. Social media marketing campaign engagement. Sales KPIs: Revenue growth. Conversion rates. Customer lifetime value (CLV). Customer churn rate (CCR). IT KPIs: Page load speed. Website downtime. Website traffic. Number of abandoned carts. Finance KPIs: Gross profit margin. Return on investment. Quick ratio. Return on equity. Actual vs forecast income. Operating expenses. Customer Service KPIs: Customer satisfaction scores. Number of days to resolve customer complaints. Number of customer referrals. Number of returned products. Human Resources KPIs: Employee satisfaction. Employee headcount. Staff turnover rates. What is the difference between a KPI and a metric? While a key performance indicator and a metric are two separate concepts, it should be noted that you can’t have one without the other. A metric is normally ongoing and used to regularly monitor a business’s performance. As an example, a marketing department might track the number of new leads generated. A key performance indicator will normally have a specific goal and deadline, while using metrics to track the progress towards the target. For example, the same marketing department might set a key performance indicator goal of increasing the number of new leads by 25% in a quarter. KPIs and customer satisfaction Customer satisfaction metrics give you crucial data that helps you understand how impressed your customers are with your products, services, or the business overall. In other words, these KPIs clarify the strength of a customer’s relationship with your brand. Tracking customer key performance indicators reveals more than just numerical data. It gives you valuable qualitative information about opinions, attitudes and behavioral trends that can be used to enhance your product or service. Some examples of customer focused KPIs include Customer Effort Score (CES), Net Promoter Score (NPS) and Customer Churn Rate (CCR). Customer service KPIs can also help you figure out if you’re meeting your customer’s need after a sale has been completed, creating a culture of feedback and improvement, hopefully increasing customer retention and lifetime customer value. What software can I use to track KPIs? Gone are the days when a simple spreadsheet is the solution for record-keeping and KPI reports. Spreadsheets offer limited data visualisations and require a lot of manual work from the person updating them. Instead, many businesses will use a KPI dashboard for monitoring performance. For example, sales and marketing teams are likely to use dashboards that offer all the data analytics features needed for KPI measurement. This data can easily be converted into graphs and charts with the same dashboard and then shared with relevant stakeholders as KPI reports. This guide has been compiled on the basis of general information only. It does not take into account the specifics of your business and is not intended to substitute tailored professional advice. Before making changes to your policies and procedures, be sure to consult an expert.

Employee Performance

Performance appraisals

The last few years has been challenging for employers and organisations. Add the Great Resignation, talent shortages, and economic challenges and it has been a tough time for both employers and employees. Companies in Australia and New Zealand must review their processes and look to reinventing their old standard processes which have not given effective results. One of the ways you can revamp your approach to performance management and employee well-being is rethink your appraisals. Work appraisals can be a key ingredient in effective performance management and help boost productivity and retain vital talent. In this guide for employers, we explain performance appraisals, the process of performance appraisals, benefits of appraisals, and ways Peninsula can help you. Appraisals Appraisals refer to the regular review of an employee’s job performance and overall contribution to the company. Also known as an annual review, employee appraisal, performance review, or evaluation, you don’t have to legally do it in the workplace. An appraisal also evaluates an employee’s skills, achievements, growth, and tasks. In an appraisal, you periodically review and assess past performance to determine compensation and promotions. You can use appraisals to justify raises, bonuses, or even termination. Appraisals do not need to be formal and do not need to be on a set timeframe. However, they should be documented and the more often they occur, the less risk there is of problems developing. Unless it is outlined in the employment agreement, contract, or any workplace policies there is no requirement for a formal time period or structure for an appraisal, but there are a few tips you should consider for every employee and their appraisal. Performance appraisals vs performance reviews Performance appraisals and performance reviews are terms used interchangeably but there are few differences. Performance appraisal is the formal, structured, and specific process while a performance review can be informal, unofficial, and even a friendly chat between a manager and an employee. Performance appraisals process Setting clear goals and objectives as to what is expected is an easy way to ensure employees are clear on what they need to accomplish. In this process, not only should you outline what you expect but employees should be encouraged to state what they would like to accomplish. In an appraisal you have the steps as follows: Let your employee know you will be holding an appraisal on so and so date. This should be done weeks or months in advance so employees can prepare. Schedule the meeting weeks in advance and confirm it with the employee. Inform the employee about the nature of the meeting, the agenda, and any questions that may arise in the meeting. Some questions that you may ask: How well they think they’re doing in their job? Which areas can use improvement? Whether they need any additional support or help for their role? How they feel about their job and company? What would they change if they could? Have your own thoughts and notes prepared for the meeting. This should include your employee’s job description, their tenure, notes from previous reviews if any, performance indicators, metrics, any other relevant figures that are related to their role. Get feedback from other stakeholders, seniors, and even colleagues. Discuss the tough questions with your employees- if they are not performing well, you will need to ask why certain targets weren’t met. Give them time to prepare answers. Take notes in the meeting and share the copy with the employee. Share final thoughts, next steps, and a written summary. Carry out follow-up meetings to ensure the development program is achieving the desired outcomes. You have the freedom to make the appraisal interview as formal or casual as you wish. Although, as a general rule of thumb, it is a good idea to conduct the meeting in a safe, secure environment (e.g. private meeting room or quiet local café), where you can both speak openly – free of distractions and interruptions. Types of appraisals There are the standard appraisals which are usually the manager or supervisor taking the lead on it and evaluating the employee with no external input. A range of new performance employee methods have been developed and put into practice in the modern workforce. As a result, employers have the freedom to pick-and-choose from a number of approaches, which can be tailored to match their style and the needs of the business. Ideally, a combination of methods would be adopted to get the best all-round picture of the employee’s performance. Peer assessment: Your employee’s colleagues or workgroup rate their performance Self-assessment: Employees rate their performance and behaviour 360-degree feedback assessment: A holistic approach as it includes input from an individual, supervisor, and peers Management by objectives (MBO): This approach works when you have short-term projects and are more about specific and measurable goals. It is ideal for teams that have quarterly or annual targets that need to be met. Behaviourally anchored rating scale (BARS): While this is a newer method of performance appraisals, it admits that behaviours play a big role in employee performance. This method involves rating employees on defined behaviours relevant to their role. For example, if an employee is in a customer service role, how they perform their role is equally important as what they achieve. Objectives and key results (OKRs): This can be used in combination with MBO or self-assessments. This method is suitable for growth-focused businesses and encourages employees to set individual measurable goals that align with company objectives. Graphic rating scale: Graphic rating scales are visual scales used to evalute employees on a continuum. The scale has numerical or descriptive options such as (1-5, 5-10) or (below expectations, meets expectations, exceeds expectations). Performance appraisal form Regardless of your approach to the performance appraisal, it is important to have all your bases covered. Below is a checklist of the key details to include in your appraisal form: The employee’s details. Summary of the employee’s performance results within the reporting period. Summary of the employee’s performance and whether they’re reaching development goals. Agreement on new development goals for the next performance period. Section for both the supervisor and employee to sign-off on the details. Benefits of performance appraisals Performance appraisals have multiple benefits for both employees and employers. When executed effectively, they have a strong impact on the workplace. Regular appraisals ensure that your employees have a clear target they are working towards. They feel motivated and have established expectations about potential rewards. Appraisals boost employee morale and productivity and incentivize hard work and dedication. Criticism of appraisals While performance appraisals have several benefits, they also have some drawbacks for the organisation and employees. Appraisals are standardised and do not take into account individual temperament and style of working. Several companies tend to use standardised or general appraisals without considering their company culture. Appraisals can have unrealistic goals and demoralise workers or push them to feel resentful. Due to the close relationship between a manager and their employee, appraisals can become about likability and not performance strictly. Not all roles may have clear metrics or figures that can signify good performance or progress. Key things for employers to remember Appraisals should be an ongoing process. Through the year, ensure that managers and supervisors feel comfortable to engage with employees. They should establish goals, note progress, and provide feedback consistently and regularly. You also don’t necessarily need to wait till appraisal to give your employees feedback or get feedback from them. You can set up informal chats with them once or twice a month to keep track of progress and any other support they may need. Managing poor performance Poor performance can occur for many reasons. An employee may be suffering from low morale, lack certain skills or abilities, or the issue could relate to problems outside of the workplace (i.e. problems at home). Regardless, it is crucial to identify the cause of the underperformance first before you jump to conclusions. First, carry out a general observation of the employee in question. Do they appear to be stressed, upset, or over-worked? How do they interact with other staff and customers? Even a few basic observations may clue you in to what is really going on. Secondly, reach out to other team members and find out if they have noticed any strange behaviour lately. Don’t pry though! You do not want the team to feel as if they are being investigated. Otherwise, this may reduce morale and productivity. From there, have a meeting with the employee. Give clear examples as to where the employee has underperformed, let them share their side of the story, and listen carefully. Depending on the reason for the underperformance, the next step is most likely to provide the necessary guidance, training, and education to improve the situation. When managing underperformance, always set clear, reasonable goals for the employee to focus on and reach. And carry out follow-up meetings to ensure the program is achieving the desired outcomes. Peninsula can advise you on how to manage your employee’s performance effectively and implement feedback processes.  Establish effective policies with Peninsula Communication between employers and employees is key to productive workplaces. Poorly handled appraisals can be detrimental to your company and also cause attrition. You need a bespoke approach and tailored advice that allows you to create effective policies and procedures for your business. Peninsula understands the specific needs of your business and ensures that we provide the customised resources and help you need.

What is insubordination in the workplace?

How to identify insubordination

What is an example of insubordination?

Verbal insubordination

Disobeying direct orders

Undermining authority

Gross insubordination

How does insubordination affect a business?

What are the causes of an insubordinate employee?

A lack of respect between staff

Disagreement with company policies or procedures

Personal issues and stress outside of work

What to do with an insubordinate employee

How to prevent workplace insubordination

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