How to reward and recognise employee performance

How to reward and recognise employee performance

Employee Performance: How To Conduct Performance Reviews

How to reward and recognise employee performance

Inspire employee motivation with annual performance reviews

Everyone likes to feel valued, and that their work is recognised – and that’s why employee performance reviews are so important. To this end, each person in your team should be very clear about his or her individual performance goals, so they know what’s expected of them.

Regular communication during the year should reduce or eliminate misunderstandings on expectations.  Rewarding employees is key to their future motivation, engagement and performance.  Most people try hard to achieve. How you go about evaluating employee performance will have a major impact on how engaged in your business employees will be for the remainder of the year – often to a greater degree than any monetary reward.

Universal common factors in setting you and your staff up for success through performance appraisals are:

  • People you employee need to feel valued, which means you must focus on the positives.
  • Communication must be crystal clear on what measures the achievement.
  • Where improvement is required, feedback must be positive and constructive.

The Performance Review is the time to celebrate successes, evaluate blocks & obstacles encountered and build training programmes to elevate future successes to a new level.  

Your employees should know exactly what to expect from you in terms of the employment review process. They will have a view on how much progress they made toward their goal and will need the opportunity to express this.

The three most important things you should include in a Performance Review

  • Achievements for the employee during the year need to be discussed and credit given for all achievements. Always start with positives and remember your employee may be feeling anxious. Positive feedback at the outset will help relax him or her.
  • Areas where full achievement was not reached but progress was made – review any restricting factors or blocks that the employee encountered. It is your job as the business owner to remove all roadblocks hindering success. Sometimes constructive feedback may be required in terms of results but often additional support is also required for the employee.
  • Future training and development plans. All employees must have a training and development plan resultant from the Performance Review.

A lot of an employee’s performance relies on you or Managers in your business performing their jobs well in providing resources and removing road blocks.

It is important you are open to all aspects of performance hindrance and look for positive solutions. The most common reason behind lack of performance tends to be lack of training or confidence.

Moving forward from the conducting of the Performance Review itself, remember the goal is to have a working plan for the year ahead that both you and your employee are engaged in and committed to.

Writing clear and specific goals with defined outcomes is your goal, inclusive of improvement in areas where performance was less than expected plus a training and development programme to overcome any confidence or skill based restrictions on performance.

The Employee that you invest time and training in will be the employee who stays with your business and adds increasing value year after year. Performance Reviews when conducted with a positive spirit and an open mind will result in engaged employees who know where their immediate and long term focus lies – and that you value them as part of your business vision for the future.

Are there any tools that can help with employee performance reviews?

One of the major challenges around employee performance reviews is that it’s all too easy to forget about them, or keep pushing them out, because there’s something more urgent going on in your business.

However, if you keep postponing, your staff are likely to feel that they’re not valued, and over time their performance could slide – or they may seek employment elsewhere. So getting performance (and pay) reviews completed on time is critical.

That’s where the People Management Toolkit in  EMS Hub, our HRIS software, can help you. It has everything you need for performance evaluations:The People Management Toolkit is an all-in-one solution for employee performance reviews, including:
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  • Annual performance reviews
  • Employee self reviews
  • Manager reviews
  • End of year scoring
  • Goal setting
  • KPIs
  • Action plans.

Tasks can be automated and delegated, with reminders set for HR, managers, and employees, so that the reviews are timely. Plus built-in reporting tools let you check on the completion rate of your employee performance reviews. What’s more, you can run departmental and organisational rating reports, giving you solid data for decision making like never before.

That’s just a small snapshot of what the People Management Toolkit can do…

The People Management Toolkit can also help you with staff training records, learning management, skills matrix development, managing 90-day trials, employee pulse checks, and more.

Next step

If you need hands-on help with employee performance reviews – or would like a software demo – please book a time with us to meet online to see how we can help you.

Contact us to find out how we can help your business.

How to develop a training matrix – Employee development

How to develop a training matrix – Employee development

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Our 2020 blog on the Employee Skill Matrix covered the role of the Employee Skill Matrix, particularly in terms of ensuring change management processes are undertaken fairly and carefully. It also described how a skill / training matrix can be useful in providing a structure for a variety of other important business processes that require sensible well thought out moves, whether they be temporary or permanent.

A training plan is an essential business tool for businesses of all sizes

The training plan can be used for many purposes. For example, when analysing organisational processes and comparing with the existing team’s capabilities, it is advantageous to know what skills, qualifications & competencies your employees have.

This type of analysis allows you to quickly identify gaps in training or weaknesses in skills, also to know who has the required skill sets to carry out certain roles or tasks within the business. From a health and safety perspective, you can keep track of team member’s training records and the status of qualifications/certificates i.e., whether they are valid, expiring, or expired & ensuring your business’s compliance.

Situations when a skills / training matrix is valuable:

  • visually showing the tasks and skills required for specific roles and the current competency and skill level of each employee for each task;
  • knowing who can be re-deployed during periods of peak in demand or if a person is off sick;
  • when planning the implementation of a new project or technology, identifying employees: who have the skillset required; who could train others; and who needed training on what and when;
  • gathering important information for proposed restructures, and changes to employee roles;
    undertaking succession planning;
  • ensuring compliance by managing essential regulatory training and certificate updates e.g., fork-lift training and first aid certificates;
  • working with team members on their personal development plans;
  • setting staff training and development budgets; and
  • demonstrating that the business is actively training and upskilling New Zealanders when applying for Employer Accreditation with Immigration New Zealand.
A skill / training matrix is an essential tool for organising the information gathered in these activities and displaying it in an organised and easily read way.
 
The matrix itself can be prepared on a simple Excel spreadsheet or electronically via an online system.

Irrespective of what method selected, steps involved in building a training matrix include:

  • Listing all roles within the business (i.e., the positions);
  • Nominating the key skills required for each of the positions, the relative level of experience or competence required, and the relative importance of the skill to your business (NB: key roles require a robust succession plan to be in place);
  • Looking at each individual and working through the list of training requirements, recording whether it is a requirement for their job role or not. Where there is a requirement, record if the person holds the necessary certificate or qualification and where possible, the expiry date. If there is a requirement and their certificate is missing, record this also.
  • Rating each employee against each of the required skills for each role (regardless of the role they are presently in, taking into account the level of skill and level of experience.

This process should give you the crucial data you need to determine your training and development needs and to develop a training plan and budget.

Another important step in the overall process that goes hand in hand with this is having a relevant Learning and Development Policy and Performance Appraisal Process as this is where managers identify learning needs jointly with employees.

 

                    Below is an example of a simple skills/training matrix template.

Example of training matrix

Technological and societal changes are coming at us thick and fast, and we need to keep up with the various skill and training requirements associated with change.

Your employees are a core and valued resource in your business and as such, there is a real need to have a continued focus and investment on growing staff capability. This approach also helps them to achieve their career goals and aspirations while at the same time contributing to your business success.

A skill / training matrix approach is an important business tool to assist you with this.

If you have any questions about setting up a skill / training matrix, a Learning and Development Policy, performance appraisal processes or you would just like some general HR guidance and expert advice, please give us a call, we would be very happy to assist you.

Contact us to find out how we can help your business.

Salary reviews 2021

Salary reviews 2021

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Start planning for salary reviews now!

June 2021 economic data indicates that the New Zealand and Australian economies are performing at least as well as pre-pandemic levels, and far better than expected.

The better-than-forecast figures can be largely attributed to both countries keeping Covid-19 in check as well as the large and timely monetary and fiscal stimulus from the Government. As a result, both countries have been able to reopen their domestic economies before other advanced nations, boosting employment and consumer spending.

Newshub reports that Australian recruiters are traveling to New Zealand to poach Kiwi employees, and due to skill shortages in Australia, are offering salaries that are double on present earnings in some cases.

It seems Aussie firms are willing to pay high salaries to fill their labour shortages and it is not just lawyers and other professionals they want – they are reportedly also targeting people with skills in other industries e.g. construction and engineering.

With this in mind, to retain skilled employees employers need to start planning for salary reviews earlier than usual.

According to the Hays Salary Guide FY21/22 while 50% of employers surveyed kept salaries steady in 2020, 67% were planning to increase salaries in their next review, with 12% expecting to award increases of 3% or more. But, 67% of employees who were surveyed said they thought a raise of 3% or more would better reflect their, individual performance, so, there is quite a considerable difference in expectations between employee and their managers who were surveyed. Employers will need to carefully manage expectations if they wish to attract and retain employees in the current skills short market.

How frequently should salary reviews be carried out?

Because of the fast-changing environment in which businesses are operating today, employers would be wise to consider carrying out twice-yearly salary reviews to make sure salaries remain competitive with the market, as well as keeping up with internal changes.

Although a salary review does not always result in an increase, it does ensure that the business keeps up to date with its competitors and that employees remain motivated because they know they are being fairly compensated. Conducting a regular, structured salary review for all positions ensures that employees are appropriately paid and understand the logic and opportunity of the wage range assigned to their position. It also gives the employer the opportunity to adjust for changes in responsibility or duties that should be reflected in a salary change, as well as making adjustments for external factors such as changes in the cost of living or changes in industry standards.

Currently, disruptions to markets from Covid-19 are far from over and salary budgets remain tight. Therefore, it remains as important as ever for employers to ensure they are paying the right amount, which can be achieved by knowing what jobs are worth in the (external) job market, as well as the value internally. Although many employers kept salaries steady in 2020, some had to reduce salaries and hours, and these cases should be revisited as soon as possible.

In terms of external comparison, salary benchmarking is a process by which you match internal jobs and their descriptions to similar jobs and descriptions in a salary survey or other source of market pay data, so that you can identify a range that the market is paying for each position. Below are some examples of when a company may benefit from this information:

  • To provide data for the regular salary review process
  • An individual has been promoted into a newly created role or transferred
  • Ensuring top performers are satisfied with their remuneration and not a potential flight risk
  • A merger or company sale/acquisition has taken place
  • A restructure
  • Pay equity checks
  • Hot skills/geographic pay differentials

What other factors should be considered when carrying out salary reviews?

  • Remuneration strategies must be aligned with your organisational culture e.g. if you talk about the importance of being a team player and of achieving quality standards, but you assess performance based only on individual quantitative results, you can’t expect the remuneration to support these goals.
  • Total rewards – don’t forget that people are motivated by more than money and that rewards from work include both tangible (monetary) rewards as well as intangible (nonmonetary) rewards such as training, career development opportunities, work culture, flexible working hours and a biggie is recognition.
  • NZ minimum wage – are you aware there are three different types of minimum wage rates i.e., adult, starting out and training? And do you know when a person on the starting out wage or training wage needs to progress to the adult minimum wage? These rates can be found on Employment New Zealand’s website.

There are no silver bullets for a successful compensation programme, however at ConsultingHQ we believe that the key to a successful programme doesn’t have to be complicated and is more about making sure that it fits with your company’s business strategy and work culture and makes sense to your people.

We can assist you with all remuneration related matters e.g. the review process, job descriptions (so that you can get an accurate analysis of market comparison data), review spreadsheet templates, incentive plan structures, and advice on some of those tricky compensation challenges, such as:

  • You have high-performing employees who are currently paid above the market. You would like to give them an increase, but you are aware that you should slow down their pay increases.
  • How do you manage this situation without demotivating them?
  • You only have a small percentage salary review budget this year, say 2%, how can you differentiate pay and performance with such a small budget?
  • A team member has given me salary data from a recruiter or the internet that suggests they are underpaid – how do I manage this?
  • We are currently recruiting and find that candidates are asking for a higher level of pay than people who are proven performers in the same job are getting – what should we do about this?

Contact us to find out how we can help your business.

KPIs – Key Performance Indicators

KPIs – Key Performance Indicators

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What are KPIs or Key Performance Indicators?

Key Performance Indicators or KPIs give you an objective way to understand how well your business is meeting its objectives or goals – or not.

KPIs can also be described as performance metrics, performance ratios, or business indicators. They are used by teams and leaders to keep track of and evaluate the performance of business processes and individuals across all departments and have proven to be highly effective.

At the employee level, KPIs can be used to measure performance and manage underperforming staff members, structure incentive payments such as bonuses, and also identify training and career development opportunities for team members. Job descriptions can include KPIs to express what the role is expected to achieve. This helps set the expectation between employer and employee right from the start.

What type of KPIs are there and how important is it to get them right?

Depending on your business’s objectives and goals you can track many different KPIs. It is very important to choose the right KPIs from the outset, otherwise, you may end up measuring something that is not aligned to your business strategy and goals.

The main types of KPIs include business KPIs, financial KPIs, sales KPIs, marketing KPIs, and project management KPIs. Each department within a business measures different KPIs because they all have different focus and goals.

Common examples of KPIs

Below are some common examples of KPIs relating to Sales and Project Management:

Sales KPIs

  • New sales – the total number of new sales made, or deals closed in a specific timeframe
  • Sales growth – the percentage increase in total sales compared with a previous period
  • New customers – the total number of new customers achieved from the sales prospects
  • New leads of prospects – the total number of potential new customers obtained
  • Lead-to-sale conversion rate – how many qualified leads turn into closed sales
  • Level of customer engagement – obtained from customer satisfaction surveys

Project management KPIs

  • Budgeted cost of work scheduled – the estimated, planned, or budgeted value of the project tasks at the time of reporting
  • Actual cost – how much money has been spent on the project to date. Actual cost is compared against budgeted cost to see if a project has stayed on budget
  • Cost variance – the difference between budgeted cost and the actual cost
  • Schedule variance – the difference between the scheduled timeline and actual, indicating how far ahead or behind schedule and budget your project is.
  • Missed milestones – number of milestones not completed on time. It’s used to track larger schedule trends rather than micromanage each milestone.
  • Tasks completed – a percentage of total project tasks that are finished at any given time, indicating progress toward completion.

For employees, here are some other examples of KPIs:

  • Provide input and contribution to ideas at team meetings
  • Undertake and complete additional training or professional development to upgrade skills, competency and knowledge
  • Develop and practice coaching skills to enable direct reports to perform at higher levels

Set SMART Performance Indicators

The key to setting KPIs is to identify desired outcomes for the company then cascade these down to specific business and team goals and then to individuals. This ensures the right work is done at the right time by the right people and ensures everyone is on the ‘same page’.

Employee goals should align with business and team goals which of course need to be constantly re-assessed in light of the changing business environment. Changes should be clearly communicated to employees and put into context. Whether it be increasing profit, reducing costs or acquiring a certain number of new customers, the KPIs must relate to a specific desired business outcome.

Good KPIs should be objective, measurable, and able to show a trend or comparison over time. The KPI should measure the performance necessary to reach the desired outcome but is not a goal in itself e.g., in the case of employee sales calls the KPI should not be the number of sales calls made to prospects, but the number of sales calls to prospects that are converted to a sale.

It is better to focus on a few key metrics instead of many irrelevant ones.

SMART is a simple tool designed to assist in drafting performance measures that are clear and will be instrumental in achieving business objectives.

SMART KPIs are:

  • Specific – specific KPIs avoid any confusion about what’s going to happen. They define what results are expected.
  • Measurable – measurable KPIs can be assessed objectively; they define quantity, cost or quality. For example: ‘respond to all customer requests’ or achieve an average quota of 70’.
  • Attainable – attainable KPIs are those that the individual has influence over within their role. They are challenging, but achievable.
  • Relevant – relevant KPIs make sense within the individual’s role and scope of influence. They may be solely responsible for the achievement of the KPI, or contribute to its achievements along with others.
  • Time-Bound – time-bound KPIs ensure required results are delivered. If the results are to happen by a certain date the goal must have a deadline. If results need to occur on an ongoing basis the goal should specify how often, for example: ‘per day’, ‘once a month’, ‘within 24 hours’ or ‘quarterly’.

Review KPIs regularly

Project and business goals and requirements can shift unexpectedly and the metrics you measure will also change as your company grows and scales. Therefore, it is recommended that you review your KPIs on a regular basis to make sure they’re still tracking progress in a meaningful way. If you find they aren’t, find new KPIs that more effectively help you communicate your goals, and make sure everyone in your business knows how they contribute to success.

Contact us to find out how we can help your business.

360 Degree reviews

360 Degree reviews

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All employers need to do 360 Degree reviews

Firstly, what is 360 degree feedback?

A 360 degree feedback survey is a system or process designed to give a wider perspective of the performance of an individual (or group) within an organisation by taking into account various perspectives from key stakeholders within the employee’s work environment.

Feedback is gathered from sources such as peers, direct reports, managers, and on occasion key customers may be involved.

Anonymous feedback gathered in a 360 degree review is provided to the employee concerned in an aggregated or summarised format (as a feedback report) and should provide a wide range of information about their skills, performance, and working relationships.

Who should 360 degree reviews be conducted for?

Given the time, cost & effort involved in conducting 360-degree feedback surveys, these processes are often reserved for those in management and leadership roles within an organisation. Some organisations use 360-degree feedback as a form of performance appraisal. The most successful outcomes in utilising these reviews are when they are used for training and development, as well as succession planning purposes.

A word of warning – although it sounds like a good idea to ask a wide range of sources for feedback to help evaluate the effectiveness of an individual, HR experts caution there are pitfalls in doing so. Companies need to carefully consider the design of their 360-degree feedback survey system to ensure it achieves the purpose for which it was intended. The process most definitely requires senior management support and a strong culture of communication and trust.

Purpose of the 360 degree feedback

In most cases, the purpose of doing a 360-degree feedback survey is to provide timely and useful feedback to help individuals (and their managers) identify where they can develop further to improve their skills, performance, working relationships and enhance their career development potential.

There is no doubt that detailed qualitative feedback gathered from a wide range of sources accompanied by coaching and supportive counseling from a manager can be very effective.

In some situations, a manager may not even work in the same location as the employee so is unable to observe their direct report’s behaviour which is where the perspectives of peers, direct reports & customers is invaluable – it can be an eye-opener to see what others see. A 360-degree review can also identify situations where a strong performance in one area – customer service, for example – may offset a not-so-flash performance in another area.

Occasionally, 360-degree surveys are used to improve ties between groups – perhaps when they are not working well together as a group, and there is conflict. In these cases, managers would focus the appraisal effort on the entire group rather than on particular members. Handled well, this process can form an ongoing channel of communication to identify and resolve conflicts between groups.

Tips for successfully executing a 360-degree feedback process

To ensure the best possible results from the 360-degree feedback process, it is important to ensure that:

  • questions are short, clear and relevant to the person’s job;
  • respondents are credible to the person being appraised (i.e., they are deemed as being in a position where they can credibly provide input);
  • both the employee and those who will complete the questionnaires are adequately briefed on the process;
  • feedback is never attributed to an individual respondent;
  • it is clearly stated how feedback will be given and by whom;
  • training is provided to those individuals who will provide the feedback and results;
  • issues of confidentiality are clearly communicated detailing who has access to the data and for what purpose;
  • feedback is concise, simple to understand, and provides guidance on how the information can be used;
  • the process is constantly monitored and evaluated.

Using survey feedback results

Once completed, the results from a 360-degree feedback survey are collated into an in-depth report of the findings and are provided to the employee by a person trained to provide feedback (e.g. the employee’s manager who has had coaching on how to deliver feedback or an external HR partner). This report usually summarises the responses, actual scores and average scores for each question as well as any comments offered by raters.

A discussion of the results allows the employee and their manager (or the HR partner) to identify areas where the self-appraisal responses are in alignment with the perceptions of their peers, direct reports & managers, and where they are not. An examination of this provides the opportunity to take on areas in the employee’s work behaviour, skills and performance that may need training and development to bring about a desired result.

Done well – the 360-degree feedback process has the potential to be a real motivator for change.

Contact us to find out how we can help your business.

Leadership style matters

Leadership style matters

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Leadership skills can make a difference to your business

Leadership qualities are the very cornerstone of success

Almost every great accomplishment has at its core, solid leadership. When everything is going well it is leadership that keeps people from getting complacent. When things are going poorly it is leadership that guides and encourages people, it is leadership that sets the new course, and it is leadership that provides hope for positive future outcomes.

Leadership style refers to a leader’s characteristic behaviours when directing, motivating, guiding, and managing groups of people. History has shown how great leaders can inspire political movements and social change.

Great leaders can also motivate others to perform, create, and innovate. In the past, managers used to operate with a rigid, bottom-line focussed, heavy into a command-and-control style of leadership. However, in most situations that style does not work now. Values have changed.

Research by psychologist Kurt Lewin in the 1930s identified three major leadership styles:

  • authoritarian (autocratic)
  • participative (democratic)
  • delegative (laissez-faire).

While subsequent research has identified other more defined types of leadership, this early work provided a catalyst for the identification of other characteristic patterns of leadership including the transformational leadership style which is often identified as the single most effective style.

Leaders adopting the transformational leadership style tend to be emotionally intelligent, energetic, and passionate.

They are not only committed to helping the organization achieve its goals, but also to helping group members fulfil their potential. Research shows that this style of leadership results in higher performance, more improved group satisfaction than other leadership styles as well as leading to improved well-being among group members.

However, it is not easy being a leader, especially these days when we are living in times of continual and, at times, exponential change.

The social and economic crisis caused by the current global pandemic is an extreme but relevant example of the types of challenges leaders face today.

Like any other crisis, the disruptive force and major social impacts were entirely unexpected and during the early days of the pandemic the most urgent objective of leaders would be to safeguard the future of the organisation and by adopting a more autocratic approach, making quick decisions for today while also considering what will be the “next normal” for tomorrow.

The “next normal” is the opportunity for organisations to emerge from this crisis stronger than before and in the post-pandemic world, smart leaders will need to adapt their leadership style.

Covid-19 has changed what business leadership looks like now, and for the foreseeable future. The more directive leadership style adopted in the early days of the pandemic would be perceived as an overly directive, actionist one-leader show during business as usual.

Leaders will need to be flexible enough to adapt leadership style to the situation as it evolves.

  • An article in Forbes Magazine describes the “7 Leadership Traits For The Post COVID-19 Workplace” required to restore and revive stressed and flailing supply chains, product lines even entire industries” as being:
  • Candour/openness/honesty – Possibly the best antidote for a workplace climate of anxiety and cynicism is openness and honesty. People respond so much better to the known (even if the news is not great) than the unknown (which tends to fuel more anxiety) or even worse misleading half-truths or irresponsible optimism (which can irreparably damage trust long term).
  • Regular, reliable fact-based communication – regular, reliable fact-based communication goes a long way to bringing people together and reducing workplace anxiety.
  • Empathy – some people are still feeling fragile and concerned about Covid-19. There has been a loss of sense of community and cohesion among staff from the isolation experienced e.g., loss of shared office space when working from home and ongoing concerns about things like job security and sick leave balances. Even just providing some heartfelt encouragement and recognition for a job well done goes a long way.
    Intergenerational and managing a remote and distributed workforce – Gen Zers and millennials require a different style of management (ethical).
  • Virtual and distributed teams also require a different style of leadership. You still need to bring these employees together regularly or work streams may fall apart.
  • Flexibility and adaptability – Covid-19 has taught us that businesses need to be flexible and adaptable to changing situations. Faced with unprecedented uncertainty, leaders need to avoid the temptation to “stick with the decision” and change course if necessary.
  • Humility / modesty – whether its knowledge related to public health, statistics, human resources or even legal issues, leaders will undoubtedly find themselves needing to rely on expertise that they do not themselves have to make the best decisions for the broader organisation. As a result, humility is a huge asset. It takes a strong leader to respond to a difficult question with “I don’t know, but I’ll find out”.
  • Active listening – while leaders certainly need to make hard decisions that will not, please everyone, making well informed decisions is still key. Indeed, there is a difference between listening and waiting to talk and for many leaders, their ability to shift gears into “listening to understand” versus “listening to respond” will be a key ingredient for their success.

Smart leaders need to adapt and be prepared to change their leadership style in the post-pandemic world and as Michael Dell (the founder of Dell Computers at age 20) said “I’ve learned that you have to take advantage of change and not let it take advantage of you”.

Contact us to find out how we can help your business.