The What, Why and How of Performance Management

Apr 2


Sital Ruparelia

Sital Ruparelia

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Performance management is the process through which your business sets, measures and reviews the objectives and performance of your people. Undertaken consistently, effective performance management will help you retain the right people, improve their performance and the overall performance of your business.


Conversely – the failure to performance manage your team can result in losing your best people,The What, Why and How of Performance Management Articles keeping the wrong type of people and the consequent stagnation of your business. But what does this all mean within the context of a small business?


- Ensuring each of your team is clear of what is expected of them in terms of both outcomes and behaviour

- Giving constructive feedback on an ongoing basis – positive and negative – so people know how they are doing on a day to day basis

- Conducting a formal appraisal annually to review their progress

- Conducting some kind of performance review every six months

- Challenging and stretching your staff to improve their performance and reach their potential- Helping under performers to improve and get ‘back on track'


- It gives your people clarity as to how they are doing and what they need to do to deliver the business plan

- From a legal standpoint, it is a key part of practising good relations with your staff and minimising any legal risk to yourself

- It helps you improve the performance and morale of your team

- It helps you grow your business by stretching and developing your people

- It helps you retain your top performers as they a) are being developed and b) see you are willing to tackle under performing members of the team

- It helps you manage out the people who are not right for the business in an appropriate manner

- It's also the right and fair thing to do for your people


- Ensure everyone has a clear brief about the expectations of their role and the measures of success

- Diarise formal annual appraisals and 6 monthly performance reviews- Conduct a review at the end of three months for all new starters

- On a day-to-day basis, catch people doing things well and praise them for it. You will see them walk away with a spring in their step and be pleased to be working for you

- Speak to people informally about lateness, absence and deteriorating work standards or attitudes as soon as it starts to become a problem (i.e. "nip it in the bud" as we say in the UK)

- Be consistent by then following these up more formally if things do not change

- Work with under performers to agree a plan and support them in changing

- Equally, set out the consequences of not changing and follow these through

- Record all formal discussions.

For example, if you speak to someone about their poor performance and agree some actions, it's good practice to have a written record of what was discussed and agreed

- Be authentic

- Stick to the facts, be honest, be straight

The key thing is to be consistent and fair in this process. It demonstrates that you are not shy about praising people when they do well, yet are still honest and constructive when managing underperformance. It also provides you with a process to identify and then remove obstacles that may be getting in the way of your team excelling and enjoying their work. Performance management plays a crucial part in building trust and credibility with your team. In the same way that building trust and credibility is the foundation of retaining customers and clients – so it is with retaining staff.