Four Elements of Effective Performance Management

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Four Elements of Effective Performance Management

Cassie Whitlock
Director of HR
BambooHR
Jack Altman
CEO and Co-Founder
Lattice

Start with your goals
1. Are you trying to evaluate employees so you can make
compensation and promotion decisions?
2. Are you trying to increase employee engagement and happiness?
3. Are you trying to make managers give feedback more often?
4. Are you looking to give employees more recognition?
5. Are you trying to make goal-setting a core practice at your company?

Performance Management Includes
Four Key Elements

Design the system that’s
right for your business

Performance Reviews
Implementation Tips

Review Structure
• Run performance review cycles (at least) twice per year.
• Grouped review cycles vs. start dates
• Do 360 degree reviews which include feedback from everyone’s
manager, self, direct reports, and peers. For peers, ask employees to
suggest 3–5 people they have worked with and have their managers
approve those peer selections.
• Ask 3–5 straightforward questions. Find a balance between guiding the
conversation and allowing people to share whatever is on their minds,
and keep the total number of questions low to reduce review fatigue.
• Make sure managers sit down with their direct reports and discuss the
feedback together after it’s all done. This conversation is the most
important part of performance reviews.

Compensation vs. Development
• Tie one of your performance review cycles per year to compensation.
Everyone should know this is coming so they don’t have to ask you
about raises throughout the year (if you want to make off-cycle
compensation changes that’s of course fine). This review cycle
should have some form of ratings or designations so you can have
a quantitative basis to compare performance.
• Your other review cycles should be exclusively for the benefit of
employees. It’s an opportunity for employees to receive and give
feedback with nothing on the line other than to be heard, be
recognized, and learn what they can improve upon.

One-on-Ones
Implementation Tips

Mentoring Relationships
• 63% of Millennials say their leadership skills are not being fully developed
• Millennials who intend to stay with their organization for more than five
years are twice as likely to have a mentor (68%) than not (32%)
• “Your boss doesn’t appear to trust or empower you”: 72% of employees
rated “not at all acceptable” or a “deal breaker”

Three Keys to Building Trust
1. RepeatInteractions
2. Win-WinSituations
3. EffectiveCommunication&Execution

Is It About Performance?
• Four out of five employees prefer feedback in the moment,
rather than an aggregate report of several months of work
• 60% of employees value qualitative feedback over numerical feedback
• Performance conversations show how the organization helps
employees and how employees matter to the organization

Epiphany Moments
• 6% increase on the anniversary of a hire date
• 9% increase on the anniversary of a promotion
• 12% increase after birthdays, especially milestone birthdays
• 16% increase after attending a high school reunion
Job-hunting activity jumps when employees make comparisons.

One-on-One Topics
• Current Performance vs. Organizational Expectations:
Provide regular conversations during and after training,
make expectations clear to increase accountability
• Career Aspirations: Uncover employee expectations for
new duties or the desire to advance in the organization

One-on-One Topics
• Wins: Emphasize how your employees’ efforts make an
impact on their team and working toward your overall mission
• Prioritization: Managers help employees work through the
good uses of their time to find the best use of their time
• Roadblocks: Employees let managers know what resources
they need to accomplish their priorities, including coordination
with other teams

Goals
Implementation Tips

Set goals to drive performance
Use OKRs or SMART goals to help employees reach
goals by connecting them to measurable results.
Why set goals?
Focus
Alignment
Purpose
Philosophy
• Ambitious: Objectives are set just beyond the threshold
of what seems possible
• Measurable: Key Results are tied to tangible milestones
• Transparent: OKRs are viewable across the organization
from the CEO down to the Intern
• Performance: OKRs are not synonymous with employee
performance evaluations

Goal setting is for the
employee’s benefit
• Ask employees to set 2–4 goals per quarter. These defines what
an employee should focus on and how they’re able to make an
impact on the company
• Managers and reports discuss goals at the end of each quarter.
Talk about what caused goals to be met or not, whether the goals
turned out to be worthwhile to pursue, and how you might be able
to set better goals next cycle.
• Don’t tie goals directly to compensation. You can and should discuss
goals during performance reviews as part of an overall assessment of
an employee’s performance, but there should not a one to one
correlation here. (Revenue generating roles are a possible exception.)

Real-Time Feedback
Implementation Tips

54
24
12
40
63
58
50
33
6
13
30
47
65
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
5 4 3 2 1
I can approach my manager with
any type of question
Actively Disengaged
Not Engaged
Engaged
Strongly
Agree
Strongly
Disagree

Bad Boss Fears
Our managers may fear becoming bad bosses through feedback. Here are the
actual top bad boss behaviors:
• Taking credit for your work: 75 percent (Managers: 52%)
• Not appearing to trust or empower employees: 72 percent (Managers: 53%)
• Not appearing to care if employees are overworked: 68 percent (Managers: 48%)

Emotional Intelligence
• Self-Awareness: Making decisions independently, not blaming
other people for challenges
• Self-Regulation: Thinking of the future and the importance
of continuing relationships and keeping trust
• Motivation: A passion for work that goes beyond money and status,
in other words, recognizing the full value of employer and employee
• Appropriate Empathy: the other half of developing win-win scenarios
• Social Skills: managing relationships with low miscommunication

Key Takeaways
1. Performance Management includes four key elements:
a. Performance Reviews
b. Manager 1:1s
c. Employees’ Goals
d. Real-Time Feedback
2. Design the system that’s right for your business
3. Performance management is for the employees’ benefit

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Thank you!

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Performance Management for Growing Companies
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Four Elements of Effective Performance Management

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