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Claire Merritt and Tabytha Cunningham | 26th May 2021

Performance management process: How to get it right in your business


Claire Merritt and Tabytha Cunningham | 26th May 2021

Performance management process: How to get it right in your business

Many managers and business owners struggle with managing poor performance in the workplace. Having a robust, consistent and realistic performance management process in place is key in order for managers to tackle issues early.

Why it is important to have a good performance management process in place

Having a good performance management process in place will ensure that employees who may be struggling get the right support and are enabled to demonstrate improvement in their role.

There are so many reasons why performance management is important. Some of the key reasons are:

  1. You can identify problems before they escalate –  Part of a good performance management process involves managers regularly checking in with employees and ensuring they have a clear understanding of where they are doing well and where they are struggling. This regular and open communication allows managers to tackle problems early, before they become serious and detrimental to the business.
  2. Increased productivity and team morale – Employees that feel that their managers are monitoring performance can be more motivated to succeed because they know their achievements are valued. Effective team management can boost morale, creating a common sense of purpose.
  3. It can improve staff retention – Good performance management means that managers are more likely to know their employees longer term goals and motivations. This allows you to work with staff to achieve their goals, reducing the risk of good employees seeking opportunities elsewhere.
  4. Reduced risk of negative effects on other employees – The risk of failing to manage performance is that good employees can be demotivated if they feel they are picking up additional work due to colleagues not pulling their weight and bad performance may rub off on other employees.

What are the key components of performance management?

We often see performance management processes that are focused on annual or 6 monthly formal appraisals. Whilst these have their place, performance management has to be much more than this to be truly effective.

As the pandemic has demonstrated, employees are now expected to quickly adapt, work independently and be more responsive then ever in their day to day roles, with technology meaning people expect an almost instantaneous response.

Similarly, performance management techniques now need to be much more responsive and built in to the day to day relationship between manager and employee, rather than something that is reserved for formal meetings.

There are 3 key components of the performance management process you should be considering:

  1. Regularity: Performance management should be a regular and ongoing dialogue. In addition to a formal appraisal, managers need to aim for a daily, weekly or at least monthly recap. Nothing said in an appraisal should be a surprise and if there has been a problem it should have been brought up at the time. The review process should be an integral part of a manager’s day job.
  2. Clear communication: Your performance management process should facilitate good open communication. Employees should be expected and encouraged to bring up concerns and to ask for help. Managers should make it clear that they are available to provide support. The dialogue should be continuous and feedback should be given when employees complete tasks.
  3. Specificity: We see time and time again employers focused on performance criteria that apply across the business. While this may be helpful to ensure parity it’s really important that managers focus on specific issues and targets for each role. Managers should set individual goals with employees that offer development opportunities and that they will feel proud to achieve. Doing this is an excellent performance management technique because employees are focused on goals unique to them, their skills and their career ambitions.

How do you set up a performance management framework?

Every performance management framework will be different. As a business you need to consider how often you can realistically hold formal appraisals.

You should set up simple forms and reminders that managers can use to minimise the time it takes to set up meetings and create a standard approach.

If your business is moving to more remote working this is a great opportunity to hold more regular meetings as they are so important.

Meetings should ideally be scheduled in advance, with managers perhaps setting aside a day a month to sit down with their employees for half an hour, and a weekly reminder to check in with their teams, ideally individually.

These performance management tools should be a key part of managers’ own targets. You need to ensure that they are given the time to invest in the staff they manage.

One of the best things you can do to improve your performance management process is to invest in your managers and provide them with regular training.

Best practice for setting goals and targets

At the start of each review year, managers should discuss key goals and objectives with employees. These should tie in with team objectives and the aims for the company as a whole. Targets should always be SMART if possible – specific, measured, achievable, relevant and time bound. The trick is to set goals at the right level. If they are too challenging and demotivating employees will burn themselves out trying to reach them. If they are too easy employees will not feel satisfied.

Regular meetings can then be used to review these. Targets can be adapted and any issues with workload or support should be discussed. A good performance management technique is to set prompts such as diary reminders at set intervals through the year. This ensures meetings are not forgotten.

Managers should ensure that they are giving regular feedback to employees. They should also encourage feedback from employees.

Managing poor performance

The focus on the performance process is always to assist the employee to improve. Ignoring poor performance and avoiding issues can be extremely detrimental.

Poor performance issues rarely improve on their own. As soon as you become aware an employee is not performing, start to address it.

Often managers or business owners come to us for help with managing poor performance with the aim of dismissing the employee, and it transpires that the issues have never been raised and the employee has never been given any negative feedback in an appraisal or informally. Often the manager has not wanted to upset the employee.

If you notice an employee is making mistakes, is not delivering on targets or seems to be struggling, you should start to help with this. Immediate feedback is a crucial performance management technique. It allows employees to be far more receptive to feedback and motivated to improve.

If the employee is not taking on board feedback or issues continue to occur, you should then move to an informal meeting with the employee to discuss concerns and agree informal targets with a short review period. We would advise 1 month as a minimum review period in most costs.

What can managers do if an employee’s performance does not improve?

If the informal performance management techniques are being utilised, but you have an employee who is still not improving as you would like, you can escalate to a more formal performance management process.

This usually starts with an investigation into the performance issues. You should then invite the employee to a formal meeting to discuss the concerns, which can result in a first written warning and timeframe to improve.

This timeframe should be fair and reasonable and give the employee enough time to demonstrate improvement. This is a lengthy process. Often 3 months or more is required to allow the employee to properly demonstrate improvement. This will of course depend on your business and the role in question. A final written warning and ultimately dismissal may be considered if you still do not see improvement from the employee.

Throughout the performance management process the focus should be on the employer supporting the employee to improve during each review period. Managers will be expected to help the employee to meet their targets and provide any further support and training.

Ultimately, to fairly dismiss someone you will need to demonstrate that you have put the employee on notice of their poor performance, have given them an opportunity to improve and are satisfied that they have failed to do so, and that you have followed a fair process.


Ultimately a good performance management process should include:

  1. regular communication and immediate feedback;
  2. good opportunity for the employee to demonstrate improvement and support from their manager; and
  3. genuine effort to make improvements, not a road to dismissal!

For further help and advice, please contact a member of our Employment team. We also run regular training sessions for line managers on performance management, as well as many other topics.

You can also listen to Claire Merritt and Tabytha Cunningham’s podcast.

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