Speaker 1: Good afternoon, everyone, and welcome to PayEntry's weekly webinar series. Thank you for joining us today. Just so you all know, the webinar will be recorded, so there is the availability for you to view it at a later time if needed. There is also an attached PDF handout available of the slides, so you can have a copy of those. Also, feel free to type any questions that you have in the question box throughout the duration of the presentation, and we will answer any questions at the end. So my name is Brianna Grimes, and today we're going to be talking about developing effective performance management programs. I am relatively new to PayEntry. This is going to be a first of many webinars that I will be presenting to y'all, but I'm very excited to present this one and be your trainer today. So today, we are going to discuss what performance management is, the different methods that are the most effective, how to pick the method that is right for your organization, what logistics will need to be taken into consideration, and then we will also provide you a few tips to keep costs low, and then we'll end this session with a Q&A period as well if you guys have any questions. So let's get started. So let's start by defining what performance management is. It is essentially a process of communication between a supervisor and an employee that occurs throughout the year in support of accomplishing the strategic objectives of an organization. Now that's a lot of technical terms, but what it really boils down to is providing employees with constant feedback on how they're performing in their role. Now in order for someone to improve in any area of their lives, they need to be able to receive constructive feedback. Ideally, they take that feedback and put it into actions that will help them improve either skills or behaviors. Let's take a look at Olympic swimmers, for example. They are the best of the best. I mean, they have to be if they've made it to the Olympics. So when Olympians get there, they need coaches, not only to get them to the Olympics, but also throughout the entire games. For swimmers in particular, you have a single events and you have team events. The coach is going to coach the swimmer differently in the individual events versus the team relay events for many different reasons. It could be the fact that the format of the different races are separate and have different components. Some countries may be stronger competitors in one event than another, or competitors may have different strategies that the coach has to account for. There's also a different mindset needed by the athlete in each of these events. So there are all these factors that a coach has to adapt to while providing on the spot feedback accordingly in order to help the athlete win. And it's no different in the workplace. The supervisors coach their teams in different situations every day to achieve department goals. The manager's job is to provide feedback to their team in order to help them accomplish the goals of the department. And those department goals also support the overall goals of the company. So essentially, they're coaching to help the goals of the company. Performance reviews take the coaching a step further by providing measurable data to see where the organization stands on productivity, and how it has improved with the help of manager coaching and feedback programs. Before we jump into the different types and methods of performance management, let's talk about current trends that we're seeing in effective performance management. Now when I say trending, I don't mean like fashion trends or Twitter hashtags that fall out of season here and there. These trends are based on surveys and case studies that have shown numerical data that supports the effectiveness claims for each of these programs components. This will give you an idea of the aspects of performance management that are proving to be the most effective in organizations right now. So the first is that performance management is finally becoming prioritized and we're very excited for this. Over the last decade, the common thought was that managers should reduce the amount of time spent on performance management. However, Gartner studies show that by deprioritizing performance management organizations have suffered 16.6% reduction in overall workforce production. In the last few years, performance management has been a hot topic because it is becoming a higher priority for organizations. The next trend is the employee centric experience from recruiting, hiring, onboarding, and now performance management, the buzzword is becoming employee centric. In order for employers to be effective in their performance management, the employee must be the center of all considerations when designing the program. If the program doesn't benefit the employee, likewise, it will not benefit the company in the long run either. The next trend is unique because it's a new concept in the way that we approach management and leadership. Performance management methods are relying heavily on trust and development based relationships between managers and employees. If you consider human nature for a moment, we are all more likely to listen and accept feedback from people who are close to us, like our friends, our spouse, our family, more so than a complete stranger that just walks up to us to give us advice. This is because we trust and value these people's thoughts and opinions. The same goes for managers. If an employee thinks that a manager is just picking on them and doesn't actually care about their growth and development, then the employee is less likely to listen and take this process seriously. Organizations are taking a whole new approach to management and encouraging development based programs that are rooted in the trust between the manager and their teams. And finally, individualized employee support. The old ways of a one size fits all is becoming an outdated notion that organizations are being compelled to toss out the window. Employees want to be valued and appreciated by being provided with individualized support systems within their place of work. Some of your employees may be lifers and they're going to retire with you. But most of your employees probably fall into the statistic that the average employee between the ages of 25 and 34 only stays at a job for 3.2 years and that number is getting lower. Top hopping is no longer seen as a bad thing. So as an employer, providing an individual experience to support employees in their career and their life goals will help you retain top talent for longer than the average. So next we're going to take a look at the top three methods in performance management and what makes them so effective in today's workforce. The first method is called management by objectives. This is the most commonly used in the US. Essentially this method brings the managers and the employees together to identify, plan and organize the objectives for the individual as well as the department to focus on for the performance review period. For example, let's take a customer service call center. One of their department goals may be to engage in less than two hours of hold time per week. That would be a goal that would go on the performance review because it's a department goal and it measures their progress in relation to the rest of the department. Another goal could be a personal goal set by the employee. They want to receive an average of 4.3 stars on their customer service reviews. It may not be a department goal, but it could be a personal goal set by the employee because they want to measure their customer service because it's important to their career growth. This process is effective in developing that relationship of trust that we talked about earlier because it's a collaboration between the employee and the manager. In addition, using this method, managers will set up weekly, monthly, or even quarterly one-on-ones to discuss the project of each goal. During these meetings, the manager offers that individualized employee support we were talking about. This fosters that trust and confidence because the employee always know where they stand with regards to their overall performance. It's never a surprise to them. Now, if a manager chooses to do one-on-ones less often due to the amount of people they have on their team, it's a good idea to keep in mind that performance feedback should not be limited only to designated one-on-ones. Performance feedback is a constant, ongoing process. In fact, studies show that immediate feedback is the best feedback you can provide your employees. In fact, it's so important that 24% of workers would consider leaving their jobs if they have managers that provide subpar performance feedback. The next method we're going to talk about is the Behaviorally Anchored Rating Scale, also known as BARS. This method compares employee performance with behavioral examples that are anchored to numerical ratings. This method is a little difficult without a visual, so we're going to take a look at a visual example before I go over it. So this is an example of the BARS rating scale. You can see that up at the top it tells us that this particular scale is measuring customer service. Then the number on the left-hand side represents a rating scale for the employee and some descriptors notating high performance versus low performance. So it looks like for this example that the scale goes from 1 to 7, with 7 being the highest performance rating and 1 being the lowest performance rating. In addition to that, each number is corresponding to a behavioral descriptor as you can see on the right. So when managers go to fill this out and rate their team on the different skills or behaviors, all they have to do is match the behavioral description to the employee's behaviors that they've been observing in the workplace. This method tends to be easier than just regular numeric rating scales, because now the numbers have value. There's an actual consistent behavior associated with each number that's being assigned, rather than each manager arbitrarily assigning a number based on what an individual manager thinks that number means. In addition, this method fosters that trust and better management employee relations, because there is a tangible behavior associated with the rating. Employees can see the expected behaviors associated with being a top performer, so they know exactly what they're working toward and what it looks like. This method also eliminates the ability to practice favoritism or bias in the workplace, which means that all team members will be rated and developed fairly based on their skills and workplace behaviors. This also means that when someone gets promoted internally, that person will more likely be supported by their new subordinates because there's confidence that they were promoted fairly and not due to favoritism. For any organization struggling with trust or rocky manager employee relations, this method would be the most effective in reestablishing that fairness and trust relationship. And finally, the last method we're going to talk about today is the 360-degree feedback method. This method appraises employees' performance based on the feedback collected from the employee's circle of influence. This circle includes themselves, their managers, their peers, their customers, or clients, and subordinates if they're in a management position. Essentially, the managers collect all this feedback and data using a survey. The manager then compiles the data overall and presents the strengths and opportunities to the employee during their review period. This method is a very qualitative data-centric method, and it can be a lot of work for managers to stay on top of throughout the year. But it is also a versatile performance method because it takes so many different perspectives into account when rating the employee's performance. And again, this method is effective in the same way as the BARS method because the feedback eliminates favoritism or bias. It also increases trust and personalizes the process to the individual employee. In order to determine which method is the best fit for you and your organization, there are a few questions you need to ask yourself and really decide with the management team what is going to work best. Start by doing a needs assessment. What need is the company trying to fill with this program? And who sees the need? Does the management see the need, or do the executives see the need? And who's asking for the program? Knowing this information is going to help you answer the rest of the questions needed to figure out what method is right for you. Purpose. What is the purpose of implementing a performance management program? Are you only doing it because it's what every other company is doing, or do you have something you want to accomplish with the program, such as increase productivity or lower turnover, or promote more from within? Don't get sucked into what I call the meatloaf dilemma. This is a story that I was told by a professor in college, and it stuck with me my entire career. A mother and daughter were making dinner one night. You guessed it, meatloaf. The mother pulls the meatloaf out of the oven and cuts off the ends before placing it on a serving plate. The daughter looked up at the mother and says, Mommy, why do you always cut off the ends of the meatloaf? The mother looked at her daughter and said, Honey, that's how my mother did it. That's how her mother did it. If you want to know why, you're going to have to ask your great grandma. So at the next family gathering, the little girl approaches her great grandma and says, Why did you always cut off the ends of the meatloaf before you served it? Does it make it taste better? Does it help release the aroma or the flavor? I have to know why. The great grandmother looked down at her daughter or granddaughter and replied with, I cut off the ends because my serving plate was smaller than the meatloaf pan, so it wouldn't fit unless I cut them off. The moral of the story is that just because we've been doing something for years and years doesn't mean that's the purpose behind why it was done in the first place. And it doesn't mean that that reason is still relevant to our organizations today. There are quite a few companies out there that do not do any formal performance management whatsoever, and they're doing just fine. So when making this decision, I encourage you to dive in and make sure you understand your purpose before using your time and resources. Speaking of resources, it's also good to know what resources you have available to you to develop this program. Is the senior management team going to approve an additional budget for the program? Who's going to oversee the program and who's going to develop it? And how much time is it really going to take? If you don't have a dedicated HR professional in your organization, I highly recommend reaching out to our HR services team. We can help your company develop a program that will fit your needs and guide you through the process from start to finish while staying within your budget. But knowing your resources will give you a better idea of whether now is the right time to implement a program. If you don't have the resources available, you won't be able to implement an effective program. And finally, support. Who in the organization is supporting this program? Programs such as this take a lot of time and input in order to develop it effectively. If there's not full support from the upper management team, it's not worth your time and energy to develop this program. The main reason is that without management support, performance review programs fail miserably. Managers have to see the value in it and get something from it for them to be willing to invest the time. Performance programs can increase productivity and by extension your bottom line, but only if they are developed correctly, supported by all managers and implemented successfully. Once you have decided on a method to use for your company, the next step is to start developing the process. There's going to be some basic logistics that you will need to be considering and decide upon before you can really dive into the development steps. First one is the frequency of the reviews. Are you going to do annual reviews or biannual reviews? If you're doing them annually, when are you going to do the reviews? At the end of the year, in the summer, during slow season? And how often do you want your managers meeting one-on-one with your employees? These are all questions to think about before you start developing the program. Now to incentivize or not to incentivize. Are the reviews going to be tied to annual merit increases, promotions, or bonuses in any way? If not, how are you going to communicate the benefits of the reviews to your managers and employees so they take it seriously? And if you do decide to incentivize the reviews, how are you going to make sure that managers don't just give everyone high reviews so they can get their bonus? Lots of things to consider when you're putting money into the mix. Scaling the reviews. How far up the chain of command do the reviews go? Are you only doing them for frontline employees and their direct supervisors? Or do you want to go all the way up to the VP or senior level? Who's going to review and track the reviews to ensure that there's nothing discriminatory in them that could possibly get you in trouble? Are the senior managers going to review all the reviews or just the immediate supervisors? Or will you have HR take care of reviewing them for completion? Lots of different questions on who's going to do what in the process. And finally, measuring the reviews effectiveness. Once you have a review system in place, how are you going to be able to measure if the reviews are doing what they were designed to do? What metrics do you have in place now where you can gather data from? And if you currently don't have any metrics or measurements in place, what are you going to have to start measuring in order to track whether or not the reviews and the performance management is being effective? There are a lot of logistical questions that go into designing these programs. And each decision must be made with the business, the managers, and employees in mind. So let's say that you want to develop a performance program and you think it's going to be great for your organization. But your company is not willing to invest a ton of money up front until the program itself has been proven to succeed. That totally makes sense. And surprisingly, you don't have to spend a lot of money to have an effective performance review program. But you do need to invest the time to do it right. So here are a few tips to keep the cost down for developing the performance review program. Invest in technology later. You don't have to have all the latest performance program technology at the start if you can't afford it. Ultimately, the effectiveness of the program comes from the manager's effort that's put into developing the relationships with the employees and putting the employees at the center. So technology doesn't mean it's going to be effective. Start with your largest department or the department that's most in need. You don't have to do a company-wide performance review program all at once. If your customer service department is hurting, there's no faith in upper management and their metrics are terrible, consider developing and implementing a program for them first and then adding other departments as resources come available. This will spread out the cost of development over time. And it will probably be able to pitch easier to the executives if you do it in steps. Rather than getting a whole new system, use the technology you already have. You can use Microsoft Forms, Excel, and Word to accomplish a pretty efficient program. There are free programs too, as well as low-fee subscription programs like SurveyMonkey and DocuSign that you can also use to help deliver performance reviews, get signatures, and have a streamlined way to save all the performance documents. So that was a lot of information, but I thank you so much for your guys' attention today. I really appreciate it. Now, if you have not done so already, feel free to type any questions in the question box, and we are going to answer any that have been coming in during the presentation.

Speaker 2: Brianna, you have one right now, and it's Rebecca asking, does the pay entry system offer any of these performance review methods that are being presented? Do you want me to answer that, or do you want to?

Speaker 1: Sure. Go for it, Kathy.

Speaker 2: By the way, this is Kathy Graham. We are currently at pay entry looking into adding performance review software to our current offering. However, right now our system does allow you to create dates for performance appraisals, meetings, and track those times and timeframes in our system. If you need help with that, please reach out to your client advocate, and they can show you where that is in the system. But know that it is on our wish list for the future to have a full-blown performance review system in ours. And really, that's the only question that we came up with, so I'll give it back to you, Brianna.

Speaker 1: Awesome. Thank you, Kathy. Well, thank you all again for your attention today. I know that was a lot of information. Like I said, I did make the slides available to you via PDF if you want to take a look at them, and this webinar was recorded, so you can always go back and listen to it when and if you get ready to design a performance program. But that is it for today. Thank you so much, guys, for joining, and have a great rest of your week.