For a manager, few things are more difficult than delivering honest performance feedback to an employee. And far too many managers don’t give feedback at all. Fortunately, there are ways to address performance review problems. Success lies in the execution of these simple ideas.
Define the culture of your organization, i.e., the behaviors
that lead to success. Recruit people who demonstrate those
behaviors. Hire only people who fit your culture. Most employee
performance problems are hiring problems. Managers hire people who
don’t fit their culture and then waste valuable time trying to “fix”
them.
Update your organization’s job descriptions. There
should be no disagreement over what successful performance looks like
at your company. Managers need to set clear employee expectations that
are tied to organizational priorities. For instance, if your firm has
a new CFO, replace the typical, generic job description jargon with
something more specific: Cut operational expenses by 5% by the
beginning of the next fiscal year. Within six months, select and
integrate financial reporting software that reduces the monthly
closing cycle time by one-third. Expand the finance department’s
staff by 10% in the coming year. Renegotiate the company’s senior
credit facility within nine months to reduce borrowing costs by
4%. It’s much easier to measure performance and deliver feedback
once you’ve established objectives such as those with each employee in
your organization. Without such specificity, the responsibility rests
on each manager to subjectively determine if someone’s performance is
satisfactory. And that is a very uncomfortable place to be.
Conduct regular check-ins—at least monthly—with employees to
review their performance. One good technique is called
“five by five.” When using this technique, the manager prepares a
sheet with the employee’s four to six performance goals for the year,
as well as the employee’s development goals. Below those goals, the
employee lists five activities he or she plans to work on over the
next month to accomplish the annual goals. At the next monthly
meeting, the employee reports his or her progress on those activities.
Then the employee sets five activities for the next month. The manager
provides feedback and input. This process is repeated monthly. For
this system to work, the manager must make it clear that the employees
own their performance, which is another tenet of effective performance
management.
Pick an appropriate review process and stick to it.
Otherwise, you’re just wasting everyone’s time with changes that won’t
improve your workers’ performance. That’s because performance
management isn’t about the form, it’s about the conversation. Many
employers constantly tweak their performance review form—with poor
results. A five-by-five system—i.e., regular structured
conversations—and no performance review form can get you closer to
optimum performance than most appraisal processes. In fact, some
companies have abandoned the annual performance review for a check-in
system similar to the five-by-five technique.
Focus on the behavior, not the person, when providing
feedback. What you ultimately want is more good behavior and
less bad behavior. Managers can learn how to provide appropriate
performance feedback. These tips can help, as can additional training
for managers. Success in this area leads directly to improved employee
performance, and that translates into improved financial performance …
which, as financial managers, should be somewhere on your annual
success profile.
Editor’s note: This checklist is adapted from the article “Secrets to Effective Performance Management,” CPA Insider, May 27, 2014, available at tinyurl.com/p6wo2st.
—By Doug Blizzard (
doug.blizzard@capital.org
), vice president of membership at CAI Inc.
