Why growing businesses must measure employee performance

Many entrepreneurs I know have a common story to mine ? when they start out in business, the whole thing is this wild, manic expansion, the adrenaline rush carrying forward a small group of people on a constantly over-excited high. And then the rot sets in.

With only a handful of people, everyone knows everything that is going on; huge amounts of information are happily stored in individual?s heads.

With growth, systems have to be brought in and with the introduction of formalised systems, constraints to individuality creep in. With everyone only privy to certain bits of the company, paperwork and constraints it is all too easy to lose that common passion.

New and green entrepreneurs are stunned to find their staff no longer quite as passionate or interested in the business as they are themselves. Strength of communication can play a huge part here to keep cohesion, but it is all too easy to have interest and performance flag. HR will direct you to the glories of performance management

Now overall, I am a fan. I really believe that if you don?t have good measuring tools in place, you are running your business totally irresponsibly and if you are not measuring the performance of your most major asset, it is pretty well plain nuts. Yet introducing it over the years has truly been a nightmare.

Change is always a tricky time and certainly for us, the original core group did not unanimously embrace growth, structures or performance management.?

With fast growth, managers are often home grown and less than perfectly trained and, certainly in my case, I have made the odd howler of a choice of a manager over the years who have done more harm than good with performance management.

When it works, managers and staff should be working together to increase personal and company performance, but that doesn?t happen if communication is not truly two-way or if the traditional sandwich technique of good, bad, good isn?t used to best effect.

Some staff will perceive performance management as a way of getting at them personally rather than mutually assessing their performance. Any non conformity across all departments will only exacerbate this.

The clearer and fairer the measuring tools of performance, the less chance there is of any manager doing this and falling into the trap of being less subjective and more emotional of judgement.

Providing the measurements are fair, then only staff with issues of looking at themselves will have issues with the measuring.

Careful performance management enables people development, showing strengths and weaknesses, allowing problems to be averted from low performance and allowing development and utilization of strengths.

Strong two way communication should naturally and mutually align personal and company goals, giving the employee meaning and relevance to what they are doing and enabling them to set their own goals in line with both.

Good performance management is far fairer on the employee, as they know exactly what is expected of them and works best of all when they have set that expectation on themselves. Not to mention if it is working towards joint incentives.

Jan Cavelle is the founder of the Jan Cavelle Furniture Company

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