How performance management can cut workplace stress
By Chris White, head of product – people solutions at business software firm Advanced
The most important asset of any business is its people. That’s why it’s so important to invest properly in developing your team – and never more so than for start ups and scale ups who are seeking growth and success.
Stress levels can be high in a growing business, and poor performance management can be a significant contributory factor. Getting performance management right from day one can help turbocharge your workforce, unlocking the potential within your employees and accelerating their pace of development – while helping to foster a less stressful work environment.
Many start ups have an appetite to do things differently and break away from the mould, so ripping up outdated processes should come naturally to start up founders! In a performance management context, that means doing away with annual performance and pay reviews, anonymous 360 degree feedback, and inconsistent approaches in favour of a modern and effective performance management approach focused on getting the best out of your team.
For start ups with smaller headcounts, this is particularly important – when you only have a handful of people on board, it’s imperative that you get the best out of everyone involved.
Workplace stress can cause huge problems for start ups, so tackling performance issues early to help keep employees on the right track can be a big help. When the employee feels in control of their career development, supported by their manager and able to improve, they will be happier and more productive.
What performance management really means
Put simply, it’s the process of monitoring employees’ performance at work and helping them to improve. It’s something of a no-brainer for start ups seeking to get the best out of their teams in their first critical years – yet many businesses (not just start ups!) get performance management wildly wrong.
Over half (56 per cent) of employees said that they only receive feedback once or twice a year, when we quizzed them for our most recent annual Performance Management Report. Of those, 19 per cent had feedback conversations less than once a year. A further fifth (19 per cent) were only having conversations quarterly.
The issue with this is that, to help an employee improve, feedback must be given in the moment. Without this, employees can’t do anything to improve and will find it harder to alter their behaviour. If feedback is being only given a couple of times a year, that represents a huge amount of lost potential, as employees can only take steps to change their behaviour following these interventions.
How to do performance management well
At its heart, performance management is aimed at allowing every employee to improve their performance at work. The science of performance management is well documented:
- Set good quality, relevant goals
- Provide access to coaching and training
- Give constructive, quality feedback in the moment.
It can be easier to consider this in an out-of-work setting to understand it properly, and sport is a great example. If you want to get better at a sport, you need a goal, you need to train and you need to assess where your shortcomings are. Improving at football, running or golf requires an end goal to work towards, a plan to get there and an honest understanding of where you need to improve. Otherwise, you’ll continue to play – but without getting any better.
The same applies at work. Without a clear understanding of how you are doing, it’s impossible to improve – and that means having regular, constructive conversations the provide specific pieces of feedback and deliver access to practical training or coaching for improvement.
The link between performance and wellbeing
Human beings are hardwired to want to do well. We want to derive a sense of satisfaction from our work and to feel we’ve achieved something – without that, our wellbeing can be negatively impacted.
Our work is a huge part of our personal identity and it’s important for people’s wellbeing and personal pride that they work in a positive environment that helps them to succeed. Stress is a major factor that impacts wellbeing. Being stressed at work without the tools to help reduce that stress will have a significant impact on wellbeing. Good performance management can help reduce stress levels by empowering employees to improve their performance, their ability and their confidence.
Do annual appraisals still have a role to play in modern businesses?
Annual appraisals aren’t necessarily a bad performance management tool – unless they are the only tool in use. When that’s the case, they can be actively harmful, serving to demotivate and upset employees.
The main issue with annual appraisals is that they don’t deliver ‘in-the-moment’ feedback, which is when the employee can actually do something about their performance and make a positive change. Rather, feedback is stored up and delivered at a much later date when the employee may not even remember the example in question and certainly can’t take steps to rectify it. By taking away the employee’s opportunity to develop throughout the year, you can slow their progress and harm your business.
It’s particularly important to take care when delivering annual appraisals alongside pay reviews. Using poor performance as a reason not to increase pay – when the employee may not have any idea that there have been issues with the way they approach their role – is a sure fire way to create resentment and trigger resignations.
Taking a modern approach
Taking a modern approach to performance management means switching your model to a continuous feedback approach. Managers must have the time and budget to handle this new approach; software tools can be a huge help especially when they allow for instant feedback, like Advanced ClearReview.
When people are in the habit of giving and receiving feedback regularly, the entire workforce starts to develop at a faster pace. Employees take an active role in their personal development, which makes a huge difference to how effective it is.
If your performance management system isn’t contributing to positive wellbeing and a reduction in stress, it’s time to make a change.