The success of a business is heavily dependent on its employees. In fact, it is almost entirely relient in many ways.

Therefore, for your business to operate at its maximum, you must manage the performance of your employees.

The idea of employee performance management is more than just making sure that your staff are doing their jobs right; it is a number of strategies and procedures which can help you in measuring, monitoring and interacting with your workforce which plays a fundamental role in your business.

Impact on Business When Employees Are Performing at Their Best

A performance improvement or management program is very important in promoting and improving the effectiveness of the employees.

When employees are performing at their best, there are several advantages to the business:

1. The managers know the strengths and weaknesses of the employees, and therefore they will assign them tasks that they are good in, and this will lead to increased productivity.
2. The employees will be more satisfied and motivated to improve their performance. When a performance management program is well implemented, it will improve the performance of the employees. Using regular feedback, employees can understand better the skills that they need to develop.  
3. Employees are more committed and engaged.  In case the employees are satisfied with the performance management system, they will be motivated and less likely to leave the business. Employees that are engaged are more involved in the business, passionate, committed and empowered.
4. Employees understand their responsibilities in the workplace. In case an employee gets constant and high-quality feedback, they will get more self-aware of their behaviors, and this will result in more development and growth.
5. The actions will be fair, and the best employees will be retained. With a good performance management program, performance-based awards, promotions, terminations and transfers will be appropriate and reasonable.

How Does Performance Impact the Bottom Line in Business?

Optimizing the effectiveness of the employees in a business is a critical component in increasing profits.

Employee performance management drives the business’ profits by:

1. On-boarding employees into the organization properly.
2. Setting performance pay structures, rewards and incentives.
3. Training employees.
4. Setting Key Performance Metrics which will align employee performance to profits.
5. Aligning employees to the purpose, mission, and vision of the organization, which includes the business’ core values.

What Happens If You Ignore Poor Performance or Underperforming Employees?

With the high cost of training and hiring being very high, a majority of businesses tend to ignore underperforming workers without realizing the huge damage that they do.

Poor performance affects the success of the business – when the quality of the work is below average, the customers will receive shoddy service. After some time, the reputation of the company will take a severe beating as dissatisfaction rises among the customers and they start leaving the business. The situation will worsen internally as the top performers will be dissatisfied with having to take on more workload to make up for the slackness of the underperforming workers, without receiving any additional compensation.

Underperforming, lazy and disengaged employees can destroy the workplace and cause unnecessary stress which will result in more conflict.

Our Top 5 Important Things to Remember When Managing Employee Performance

Managing employee can be very stressful, nonetheless paying close attention to the culture that you are creating in your business can have lasting improvements in your workforce’ lives. Below are a few things we think that you should keep in mind while managing the performance of your employees:

• Encourage your employees to be well-rounded outside the workplace. Employees that are well-rounded tend to be happier employees since they get time to refresh after working. Happier employees are also more productive.
• Be the wind beneath your employees’ wings. The employees should have goals at the workplace, even if these goals will revolve around performance review metrics, client satisfaction ratings and sales figures.
• Acknowledge that appreciation is a strong currency. Calling attention to the success of the employees is an essential part of building the business culture that you want to be known for.
• Stop micromanaging your employees. Trust your employees, after all, you hired them. Trust them to get their work done, and a majority will do exactly that.
• Create a culture of continuous learning. Learning new capabilities and skills is an enabler of better performance.

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At Common Goal Consulting, much of our work is focused on managing employees performance – both improving or managing poor performance, as well as creating and driving initiatives to reward great performance.

Why not have a chat to our team about how we can improve your bottom line through more engaged, productive and better performing employees. Email our team at projects@commongoalconsulting.com.au, or visit our website at www.commongoalconsulting.com.au/hr-consulting to learn more about what we do.