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  • As 2022 comes to an end, it’s an excellent time to start thinking about your year-end performance reviews. During these annual performance reviews, managers usually evaluate and discuss an employee’s overall performance. It’s typically a formal conversation about an employee’s:

    • Achievements
    • Goals
    • Opportunities
    • Areas to improve on
    • Responsibilities 
    • Strengths

    As a business owner, you’ve probably conducted many of these before; however, having a strategic plan is vital for a prosperous new year. In addition, the Great Resignation and the effects of inflation forced employees to quit their jobs and go elsewhere, which provides them with better benefits and flexibility. These reviews can be an excellent time for your employees to discuss their concerns and allow you to address them before it’s too late.

    How To Make The Most Out Of Year-End Reviews

    Conducting performance reviews multiple times throughout the year helps you understand how well your employees are performing and how satisfied they are. 92% of employees want feedback more often than just once a year. However, focusing on your business takes up the majority of your time and can take away from being able to conduct these reviews more frequently. So, if you’re only conducting a year-end review, we’re here to provide insights on how you can make the most out of them.

    Let’s start with the basics. Performance reviews should include the following steps:

    1. Set clear goals for the process

    Alongside the standard goals of measuring and evaluating employee performance, consider the company-specific objectives you might want to include throughout all reviews. You should have a process in place that all managers in your organization use to ensure you’re consistent.

    2. Create structure and tools 

    Determine what tools you’ll be utilizing in the reviews or, if applicable, what structure you’ll use. For example, the most common tools used in businesses include an evaluation rubric, a pre-meeting and post-meeting reflection sheet, a goal-setting template, and an agenda. Whichever tools you decide to use, it’s essential that you have a digital copy and a place to store them for the duration of the employee’s tenure with the organization. You want to be able to look back at these reviews every time you conduct a new one to examine how the employee has improved over time.

    3. Clarify employer and employee roles and responsibilities 

    Clarifying the roles and responsibilities of both parties makes for a more prepared and engaging conversation. Explaining your responsibilities as their leader shows them that you’re there to help them succeed and provide employees with the necessary resources. Refreshing your employees of their roles and responsibilities is also an excellent way to make for a more impactful review

    4. Seek employee feedback

    If you conduct one annual review, it’s essential that you listen to your employees and allow them to provide feedback. Positive and negative employee feedback is essential as it helps break bad habits, reinforces positive behavior, and enables teams to work more effectively toward their goals. When employees feel confident enough to share feedback with their manager, it creates a better work environment.

    5. Evaluate the process periodically

    Once you have a year-end review that works for you and your employees, consider evaluating it periodically. Monitor the progress of your performance review process against the established goals. Are there areas in which you can improve upon? Are your employees taking something useful out of these? Are they helping you grow your business?

    Best Practices For Your Business

    We all understand how much time it can take to conduct performance reviews. Nonetheless, you understand the importance of these reviews and how it makes for a more productive workforce. As a business owner, performance management is critical to making training, career development, compensation, and promotion decisions. It allows you to set clear goals and expectations for each employee and provide feedback about their performance related to these goals. Joe Wenger, GMS’ Senior HR Generalist stated, “Annual performance reviews are essential. However, it’s necessary for management to meet with employees on a more frequent and informal basis to review goals and progress throughout the year. This approach allows for any necessary adjustments to be made as needed if any significant changes within the company have occurred. It keeps employees on track and reinforces the value of everyone’s role in achieving team and individual goals alike.”

    In addition, performance management is valued by employees as it can offer opportunities for them to grow within your organization and, ultimately, advance their careers. Partnering with a professional employer organization (PEO) like GMS makes your job much easier. GMS provides you with a performance review system that provides you with the following:

    • Consistent feedback
    • Employee development
    • Goal setting
    • Tracking and documentation
    • Reporting
    • Customizable email templates and calendar invites
    • Training and implementation

    Want to make the most out of your performance reviews? Contact us today to get started. 

  • A lack of motivation can really cost your business. Entrepreneur reports that disengaged, disinterested employees have led to a loss of up to $550 billion per year for U.S. businesses. Fortunately, there are ways that you can help motivate your employees so that they’re ready to give it their all every day. Here are three steps that you can take to engage your employees.

    A motivated employee. 

    Build Relationships

    Just how important is it to build a relationship with your employees? When the Society for Human Resource Management (SHRM) conducted a survey on job satisfaction and engagement, a whopping 95 percent of respondents noted that “their relationship with their immediate supervisor plays an important role in how they feel about their job.”

    Whether you work directly with your employees or have a management staff that supervises everyone, it’s important to build a welcoming culture that places an emphasis on communication. Employees want to feel like their voices are heard, and the occasional email or chat message isn’t going to be enough to motivate them. Some ways to improve workplace communication include:

    • Establishing regular face-to-face communication with employees
    • Set regular meetings where employees can share input, such as weekly townhall meetings or monthly retrospectives
    • Offer an anonymous feedback system
    • Invest in online communication tools, such as Slack or HipChat

    Instituting some of these practices can give employees an avenue to share their thoughts and feelings. However, communication can be about more than just the workplace. Showing an interest in employees’ lives outside of the office can show your employees that they’re more than just a dollar sign, which can inspire them to become more invested in your business and motivated to do great work.

    Let Them Grow

    Future opportunities can play a big role in an employee’s motivation. SHRM’s job satisfaction and engagement survey found that roughly half of respondents noted that “career advancement opportunities within their organization were very important to their job satisfaction.” Fortunately, there are many ways that you can help your employees develop as a part of your business.

    Hiring internally can be a powerful tool that can allow your workers to make the next logical step in their career. Internal candidates already know your company intimately, and you have the advantage of knowing what their skills are before you offer them the job. For your employees, it gives them a big forward step without having to leave for a new company. In return, you get to retain key talent and help your workers grow. Also, internal hires can be up to 20 percent cheaper to hire than external candidates, which adds some cost savings to your team development efforts.

    If you don’t have any open positions, you can still help your employees develop. Offering employee training or allowing workers to attend educational conferences and trade shows can give them the ability to learn new skills that they can use at your business. It also shows that you care about their career development, which can serve as a great motivational tool.

    Give Your Employees Benefits That They Want

    Money is a big motivator, but it isn’t always the biggest factor for employees. According to the Harvard Business Review, “80 percent of employees would choose additional benefits over a pay raise.” Catering your benefits package to the wants and desires of your employees can act as a good source of motivation.

    Of course, employees may value certain benefits more than others depending on their needs at home. Across generations, employees’ preferences have changed, which can impact which types of benefits you may consider adding to help motivate your workers. Glassdoor offers some insight into what benefits each generation tends to value:

    • Baby Boomers value salary level, health insurance, and a retirement plan
    • Gen Xers value salary level, a 401K plan with matching benefits, job security, advancement within the company, and opportunities for work-life balance
    • Millennials value benefits choices, paid time off, ability to work remotely, control over their schedules, and a great deal of flexibility

    Each business is different, so you may find that giving your employees some work-from-home privileges to be beneficial while another business owner may see more value in employee training. It can also be beneficial to listen to what your employees have to say on the matter, whether it’s in person or during a regular meeting that you set up to improve communication. 

    By listening to their wants and needs and amending your benefits package in a way that makes sense for both your business and your employees, you can show your workers that your company is one that values them. In turn, this can inspire them to keep up the hard work and become more invested in your business.

    Get Some Help to Motivate Your Employees

    While implementing employee management initiatives to motivate employees can be very valuable, it can also be a lot of work to take on by yourself. Partnering with a Professional Employer Organization allows you to turn to HR experts to set up employee training programs, get the most bang for your buck on benefit plans, and manage other critical HR functions that can keep your workforce motivated. 

    Contact GMS today to talk to one of our experts about how we can help you with employee management.

  • An underperforming employee in your organization is an unfortunate reality that every business owner may have to face at one point or another. When an employee is failing to meet expectations, not only do those directly associated with that employee suffer, but the entire company will eventually feel the ripple effect of these behaviors. These repercussions are typically felt more greatly and much more quickly within a smaller business, where every employee tends to play a larger role in the success and failure of your operation.

    Eventually, though, you’ll reach a point where it’s clear that the situation has to change. While terminating the employee may seem like the logical course of action when you reach this point, performance improvement plans may offer a better approach to employee performance management.

     Silhouette of a businessman pushing a boulder up a hill.

    What is a Performance Improvement Plan?

    A performance improvement plan (PIP), sometimes referred to as a performance action plan, is a tool used to give an underperforming employee the opportunity to succeed. Essentially, it can be viewed as a probationary period for employees. The plan itself should be a formal, written document that outlines any recurring behavioral and/or performance issues along with a specific timeline for the employee to achieve certain goals to regain good standing in the company.

    Steps to Implementing a Performance Improvement Plan

    The Society for Human Resource Management (SHRM) outlines the steps that organizations should take to implement a performance improvement plan:

    1. Identify the Underperforming Employee

    Underperforming employees can be challenging to identify within an organization. For example, an underperformer could be a new hire that has a larger learning curve than originally anticipated. Even a top performer can become disengaged if there’s a lack of growth opportunities or challenges. According to PeopleGoal, an employee experience platform, some signs that may suggest that an employee is struggling include:

    • Decreased productivity
    • Decreased engagement
    • Increased time off
    • Increased tardiness

    2. Determine the Right Course of Action

    Performance improvement plans can be beneficial in certain circumstances. However, they can also be a detriment if there isn’t a genuine commitment to improvement. SHRM says that performance improvement plans should be implemented when there is “a commitment to help the employee improve, not as a way for frustrated managers to start the termination process.” 

    To assess whether a performance improvement plan is the appropriate next step, ask yourself:

    • Is it likely that the issue can be resolved through a formal improvement plan? Problems that involve sales goals, quality ratings, and other quantitative objectives are typically issues that could be resolved with a performance improvement plan. Issues related to a poor attitude or bad behaviors, on the other hand, usually aren’t as well-suited to using the goal-oriented process of a performance improvement plan.
    • Has the employee received the proper training to perform the job well? Was the employee’s onboarding process sufficient? Additional training outlined in a performance improvement plan can help correct any gaps in training.
    • Is there a known personal issue affecting the employee’s performance? When an employee experiences troubles in their personal life, it can affect their work performance. A performance improvement plan can help the employee get refocused and back on track in a reasonable time frame.

    3. Draft an Improvement Plan

    Once the need for a performance improvement plan has been established, it’s time to start drafting the plan. As you write the performance improvement plan, be sure to:

    • Define what is considered an acceptable level of performance. Consider the employee’s job description as well as the company guidelines outlined in your employee handbook.
    • Identify areas where the employee’s performance is lacking. Include specific details, such as dates, specific data, detailed explanations, and any previous guidance or reviews given to the employee.
    • Set specific, measurable, attainable, relevant, and time-bound (SMART) goals. Keep in mind, performance improvement plans usually last 30, 60, or 90 days. An example of a SMART goal could be, “John Smith must produce at least 100 units per month for the next three months.”
    • Provide guidance on what the company will do or provide to help the employee achieve these goals. For example, a manager might provide additional training, resources, or coaching to help an employee close a skills gap.
    • Include how often you will meet with the employee to review their progress. Weekly check-in meetings can be common, but the frequency can depend on the goals or circumstances.
    • Clearly state the consequences of not meeting the objectives of the plan. Consequences may include a demotion, transfer to a different position, or termination.

    4. Review the Plan

    It’s important to remove any bias against the employee from the performance improvement plan, especially if you work closely with the employee. Ensure that the performance issue is clearly stated, the goals are fair, and the deadlines are reasonable. It could be in your best interest to have someone in HR review the plan to ensure the plan is attainable and fair.

    5. Implement the Plan

    It’s now time to meet with the employee to discuss the plan and your expectations. A word of caution: performance improvement plans tend to get a bad rap with employees, as they can often be seen as the first step toward termination. As a result, some employees may decide to quit, rather than stick around for what they believe to be inevitable. It’s also important to note that not every employee will respond to criticism well.

    When you meet with the employee, it’s important to communicate the company’s commitment to the plan and to the employee’s success. Employee feedback should also be encouraged during this time to help clarify any areas of confusion and understand their perspective on the current situation. After reviewing the plan and making any modifications, you and the employee should both agree to and sign the written plan.

    6. Monitor Progress

    As stated in the performance improvement plan, you should regularly meet to review the employee’s progress toward meeting their performance goals. Ensure all meetings are scheduled and occur on time. Cancelling, rescheduling, or tardiness to meetings could convey a lack of importance or commitment from you to the employee.

    During these check-in meetings, evaluate the employee’s progress, identifying why progress has or has not been made. If needed, provide solutions or resources to help get the employee back on track.

    7. Plan Conclusion

    The outcome of a performance improvement plan is situational. In an ideal scenario, the employee would reach their goals by or before the plan’s deadline. If this is the case, formally close the performance improvement plan, recognize the employee’s success, and allow the employee to continue employment with the expectation of continued good performance.

    If an employee falls short of meeting their performance goals in the given timeline but is committed to improvement, it could be worthwhile to extend the deadline. In other situations where the employee is unable to improve or their performance worsens, you’ll need to consider whether a transfer, demotion, or termination would be in the best interest of the company.

    Benefits of a Performance Improvement Plan

    Regardless of the outcome, there are many benefits to implementing a performance improvement plan. The process of identifying the root causes of poor performance, outlining clear expectations for improvement, and giving the employee a chance to rectify shortcomings could save significant time and costs related to termination and re-hiring. Additionally, by having these types of plans in place, you’ll create a culture of performance accountability and continuous improvement along every rung on the corporate ladder. 

    Employee Performance Management Services

    As a business owner, performance management is critical to making decisions related to training, career development, compensation, transfers, promotions, and termination. Professional employer organizations (PEOs) like Group Management Services can help. Whether it’s reviewing a performance improvement plan, documenting performance reviews, or even initiating demotions, transfers, or terminations, we can take on the administrative challenges associated with managing employees. In addition to performance management, we can provide comprehensive HR services, including payroll, benefits, and risk management. Contact GMS today to learn more about our employee performance management services.