Entrepreneurs

Council Post: How To Set Up A Performance Management System

By Kristopher B. Jones, serial entrepreneur and investor. Kris is the founder of 2020 SEO Agency of the Year Finalist LSEO.com.

When deciding what kind of internal culture you want your business to have, you will inevitably arrive at the issues of promotions and raises. You have two basic ways to promote your employees to higher positions: seniority or merit (or a combination you define).

With seniority-based raises and promotions, you reward your longest-serving employees, but there’s no guarantee those people have actually earned those benefits. Essentially, someone can make more money simply by showing up every day for a long enough time.

I base promotions and raises on a performance management system. This kind of structure lets me look at how my employees contribute to the company and conduct themselves as members of their teams.

If they meet expectations, they get raises and a promotion where available. If they don’t, they stay where they are until they prove themselves.

But what kind of criteria should you set for your employees in this kind of system? Here are four major areas where you should be testing your employees throughout the year.

Accountability And Reliability

You’re working with adults, so accountability should ideally come naturally to your employees, but trust me when I say it’s not a given. Employees who are accountable take full personal responsibility for the quality of their work overall. They show up when they are supposed to, do their work well and on time, and don’t make excuses for mistakes they have made. They contribute to the company’s bottom line with almost no supervision needed and always take responsibility for their actions.

Communication

Communication could easily top this list. Its importance in employee performance can’t be overstated. The ability to listen to others and then state your own opinion clearly and respectfully is vital for anyone who wants to move up in a company.

An employee who communicates well will keep collaborators abreast of plans, updates and developments in shared projects. They will also be open and honest with their direct supervisors about how their work is coming and any problems they’re having.

Communicative employees should also be able to give and receive constructive feedback in stride. Providing feedback to the company shows engagement. Receiving feedback means the employee is mature enough to recognize supervisors are ideally there to help, not criticize.

Customer Focus

People form businesses because they want to provide a service to customers. Employees work for the business but are there to serve the customer. Therefore, an employee’s devotion to customers absolutely must be a part of your system for promotions and raises.

What does that look like? A customer-focused employee builds and maintains customer satisfaction as a conduit for the business’s products and services. They should be able to describe a customer’s business and state the customer’s expectations of the company.

Customer-centric employees should also be fully capable of delivering products and services as the customer needs them and responding appropriately if they fail to meet customer expectations.

Then, there’s the simple matter of maintaining good attitudes in all interactions with customers. No employee should ever be unprofessional to a customer. The employee’s job is to find a solution to make the customer happy.

Development And Continual Learning

We finally come to the self-improvement section of your performance management system. Ideal employees will display a constant willingness to learn more about the industry and obtain new skills that can help them do their jobs better.

This desire to learn can manifest in several ways. Employees should be generally curious about their line of work and always be asking questions. In an effort to improve their own performance, employees should seek supervisor feedback and put it to good use.

Overall, employees should be proactive in learning new things and getting better all the time. They should want to learn at every opportunity and see their mistakes as chances to be better.

Final Thoughts

I could name a multitude of other areas to include in your employee performance management system, such as speaking abilities, interpersonal skills and the capacity to influence co-workers positively.

Which areas you want in your system will depend on your business, but the ones I have listed here are great places to start.

In the end, the employees who truly want to advance in your company will rise to the top anyway, embracing your standards for promotions and raises and running with them. Reward the best employees you have, and they will want to keep growing with you for the long haul.

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