USING PERFORMANCE INDICATORS AND A STRUCTURED PERFORMANCE MANAGEMENT SYSTEM TO RETAIN EMPLOYEES

By Erika Osmundson,
AgCareers.com Marketing & Communications Manager

Within an operation there are so many data points to collect, collate and analyze to improve performance and profitability. From conception rates to feed efficiency and rate of gain to mortality rates, producers are inundated with performance measurements. However, a crucial factor to the profitability equation is often overlooked – employee performance measurements.

The definition of employee performance management includes planning work and setting expectations for team members and continually monitoring performance. It is also important to benchmark performance and in most definitions it is strongly recommended to reward good or solid performance.

According to the AgCareers.com 2011 U.S. Agribusiness HR Review, 94% of participating organizations had a structured staff performance system in place. Of those, 72% link a reward to staff performance. Eighty-six percent of those organizations implement their reward system on an annual basis.

WHY PERFORMANCE EVALUATIONS ARE IMPORTANT

Performance evaluations allow senior leadership and managers an actual mechanism for planning, monitoring, and evaluating employee performance and development. It also ensures that job expectations and goals are focused and directly aligned with the operation’s goals.

Quite possibly the most important factor, employees want to know how they are doing and they want to hear it from their managers. They want feedback on how to improve and to be recognized and appreciated for the things that they’ve done well.

In a recent AgCareers.com webinar, guest presenter Dr. Sara Mann of the University of Guelph, also shared that while it is hard to estimate the ROI for effective performance management, research shows that it leads to higher levels of employee motivation, job performance and commitment, and lowers the level of costly turnover.

TIPS FOR SUCCESSFUL PERFORMANCE EVALUATIONS

There are a number of performance review tools and documentation available to choose from. It is important to use a standard tool/document so that there is consistency in the process. This will help alleviate bias and create a sense of fairness among employees. Select a tool that is functional, applicable, fair, and encompassing of the benchmarks you’d like to evaluate.

Preparation is an important step that needs attention. This step sets the stage for a productive discussion with the employee. Complete the assessment documentation noting specific examples for both positive performance and areas of improvement. Keep in mind that there should be NO surprises during the evaluation process. Effective managers provide performance counseling throughout the year. The formal evaluation is to review those identified areas for improvement, assess progress, and discuss next steps. Ask the employee to submit a self- assessment in advance of the meeting. This will allow for sharing during the meeting and a more open dialogue.

During the performance evaluation discussion, the focus should be on two-way dialogue. Allow the employee to share their thoughts and self-assessment. Be sure to listen and acknowledge those areas of consensus. You will also want to highlight where you have a differing perspective. Allow for questions and again, try to provide specific examples to support your comments.

To wrap up the discussion, review the key points, discuss any further concerns, and talk about next steps. It can also be beneficial to ask for feedback on your management style. If you do this, be sure to listen attentively and do not become defensive. It is also very important to implement as much of the feedback as possible.

Benchmarking employee performance can be in the form of ratings. A standard rating system, such as a metric system (a 1 through 5 scale), is needed. Be sure that team members understand the scale and have descriptions for ratings. For example, a 3 is a solid performer – performance consistently met expectations in all essential areas of responsibility. These ratings give the employee something tangible to reflect on, and also assist with streamlining the reward process. Bonus tip: If you have multiple people evaluating employees within your operation, have the evaluators briefly connect before assigning ratings to calibrate or check that there is a consistent level of performance by employees from one department to another.

Many organizations use a pay for performance strategy and link performance ratings to merit or base pay increases. To do so, compile salary recommendations, for assistance with this consider AgCareers.com’s Compensation Benchmark Review, an agribusiness salary survey. The structured rating system will assist managers in communicating performance-based increases and again provide a consistency across the organization that conveys fairness to staff.

While there are critical production measurements needed, it is just as critical to measure employee performance. By standardizing and providing a systematic approach to performance management, operations can enhance their employee retention, employee morale, profitability and overall production. For more information on employee performance management, email AgCareers.com at agcareers@agcareers.com.

To further explore this concept, you may also be interested in reading the article Simple Math Can Miss Opportunities.

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Erika Osmundson is the Marketing and Communications Manager for AgCareers.com, the leading online job board and human resources service provider for agriculture. For more information on how on Benchmarking Employee Performance, visit AgCareers.com.

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