Assess team employee performance management whitepaper

1. Bridge the gap between employee performance and profitability.

2. This whitepaper applies to the following AssessTEAM products: Basic, Premium, and Enterprise

3. Introduction Traditional performance management processes do exactly what they say on the tin: they evaluate and rate staff performance, usually using a symbolic rating system, e.g. 1-5. McKinsey showed that the main drivers of growth for the 30 largest companies in the world (between 1995 and 2005) was profit per employee. They argued that the best way for organizations to maximize market capitalization was to measure and optimize for profit-per-employee. They also need to ensure that their performance management systems are geared towards hiring and retaining profitable employees and improving or removing less profitable employees. However, they tend to be dangerously disconnected from the commercial process of a business. Because, how do we know whether a 5 star-rated worker is actually more profitable and valuable to the business than a 3 star rated worker? We don’t. In the worst case scenario an appraisal system based on symbolic performance ratings could be over-compensating less profitable workers and under-valuing highly profitable workers. It would be damaging to a business. HR and talent management processes need to become more commercially driven, and this starts with employee evaluation. It’s vital that HR teams select performance evaluation software that is designed to output team and employee productivity metrics. This will help to build a productivity-guided HR process in tune with the commercial strategy, able to cut through prejudice and give HR more credibility and influence in the boardroom. Appraisal systems and therefore HR staff can no longer afford to be so disconnected from the profitability imperative of the business. McKinsey was one of the first to recognize this a decade ago in their landmark white paper, ‘The new metrics of corporate performance: Profit-per-employee’ ? 1

4. Employee evaluation myths As a business leader or team manager, you should be aware that many myths about appraisals still persist. These myths can hold you and your team back, which is why it is vital that these myths are quickly debunked. Here are 3 top myths about appraisals and the reality. Myth 1: Performance appraisals should occur once a year. Reality Annual appraisals are an outdated way to manage employees. The staff doesn’t like having to wait a year for feedback, particularly negative feedback. Research shows that quarterly and monthly appraisals deliver the best returns and as a result more and more major companies are moving to quarterly appraisals/continuous feedback. Myth 2: Performance feedback should come only from the line manager. Reality While line-manager feedback is important, the key to organizational success in this modern age is collaboration. If organizations want to thrive, they need to go the way of companies like GE, Google, Cargill, Eli Lilly, Amazon, Adobe and Accenture, and adopt 360-degree feedback systems, where colleagues and internal clients share feedback as much as managers do. Myth 3: Performance appraisals must be linked to pay. Reality While it can often make sense to link performance goal realization to bonus/pay, this does not mean that the whole appraisal process should be linked to pay. 2

5. In fact, it can be damaging to personal development, because employees will be less willing to acknowledge weaknesses/learning opportunities if they think they will be financially penalized. That’s why some developmental areas of the performance appraisal should actually be separate from pay, and the main consequence of weaknesses in these areas should be an opportunity to do further training. AssessTEAM offers a simple and effective solution, which focuses on two steps: 1. Clarifying job duties and responsibilities, and 2. Using in-depth productivity reports to improve performance. Every step of this process is built into a single cloud-based platform. Research shows that employees are less willing to answer performance evaluations honestly if they think they’ll be penalized financially. And who can blame them? Organizations would do well to take this into account, and address weaknesses with further training, rather than financial penalties. One of the essential elements of a successful business is the employment of team members who love what they do and excel at their jobs. When asked about the success of a basketball team, Michael Jordan (one of the best basketball players of all time) noted that, “Talent wins games, but teamwork and intelligence win championships”. “The greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things.” The same principle applies to a company. Management can employ the most talented staff available in the marketplace; however, if they do not work together as a team, the chances of the company being successful is very small. It is vital for employees (and employers) to work together to ensure a profitable and successful business venture. After all, there is no point being in business unless you are meeting your goals. Ronald Reagan This is why our human resource management experts at AssessTEAM are always seeking to answer the question : “How do company managers and owners not only employ the right talent, but also manage this talent to the benefit of both the individual and the company?” The key to a successful business is the strategic management of human resources as well as monitoring and managing staff productivity. It is virtually impossible to run a successful business without keeping track of whether (and how) employees implement what is expected of them regarding their job duties and responsibilities. 3

6. The Four Pillars of Successful Performance Management 1. Clear and concise job descriptions The first step to the successful management of employee performance is to ensure that each employee has a definite (and clear) idea of what his job expectations are. This includes both a detailed description of each job, as well as clear, measurable outcomes and goals of each job. Once clear and concise job descriptions have been created (and measurable deliverables have been included), talent management is much more straight forward. Therefore, it is essential to utilize performance management software that prioritizes job description clarity. 2. Track performance by team Not all people can (and do) work together well. If two or more members of a team clash, projects can be derailed, clients lost and professional reputations hurt or even destroyed. In today’s world of instant communication, ubiquitous social media, and public reviews, it’s all too easy to publicize poor business practices. One bad review might very well cost you your business. Therefore, it is vital that your company’s mission is to prioritize service delivery and product excellence. Basically, a happy customer translates into a successful business. 3. Track performance by project Not only is it essential to track employee performance on an individual and team basis, but it is also equally important to monitor employee performance per project. Apart from all the reasons mentioned above, it is easy for project deadlines to slip and not be met. Every project will encounter curve balls and unforeseen challenges. A wise project manager will build in time to tackle these challenges. However, tracking projects per deliverable are not enough to ensure their successful completion. 4

7. It is equally important to track employee performance during the project. In this way, a project manager can address issues relating to reduced staff productivity as well as slippages in time due to unforeseen challenges and unrealistic deliverables. FINAL THOUGHT 4. Track project productivity Doing business in the post-modern, frenetic business world is not easy. The proper management of human resources and employee performance can make the diference between a struggling business headed for failure, or a successful business on their way to the top. AssessTEAM Enterprise enables managers to track timesheets by project, giving businesses a valuable insight into how much time each team and individual is investing into each project. Time investment is converted to actual measurable dollars (all currencies are supported) that is then compared with the project budget to ascertain profitability metrics. Productivity reports by team and person show a clear analysis of profitability metrics over a period of time. Business owners use this data not only for employee evaluation but also the evaluation of product lines, team investments and cost optimization. AssessTEAM subscriptions Basic subscription Basic subscription enables simple and quick competency based evaluations. This is our most popular plan that is loved by over 50,000 employees across 97 countries. Use real time feedback, scheduled evaluations and 360 feedback too. Most employees use the AssessTEAM mobile app that makes evaluations fun. Premium subscription Premium subscription includes all Basic features plus enables productivity tracking by collecting timesheets from employees on projects and cost centers, this plan is popular with service companies who evaluate employees on competencies as well as measure productivity. Enterprise subscription Enterprise subscription includes all Premium features plus enables profitability tracking on projects to deliver clear actionable intelligence on project successes and failures. Business intelligence reports show gross earnings by project types, projects, teams and persons. This plan is popular with companies that execute time and material projects for customers. All subscription plans include our free guided rollout service. Our rollout assistants can import your teams, design evaluation metrics and customize reports. TRY IT FREE FOR 30 DAYS ∠ STARTING AT $1 PER PERSON 5