INTERNAL USE ONLY A COMPLETE GUIDE TO PERFORMANCE MANAGEMENT The Lloyds Bank Foundation is committed...

INTERNAL USE ONLY

A COMPLETE GUIDE TO PERFORMANCE MANAGEMENT

The Lloyds Bank Foundation is committed to providing this information in a way that is accessible and useful for charities. This information, however, is not in any way intended to amount to authority or advice on which reliance should be placed. You should seek professional advice as appropriate and required

CONTENT

• What is Performance Management?

• Why is Performance Management Important?

• Roles and Responsibilities

• Performance Management: The Key Elements

1. Setting Expectations and Agreeing Objectives

2. Giving Regular Feedback

3. Measuring and Assessing Performance

4. Development Planning

5. Improving Performance Issues

The Lloyds Bank Foundation is committed to providing this information in a way that is accessible and useful for charities. This information, however, is not in any way intended to amount to authority or advice on which reliance should be placed. You should seek professional advice as appropriate and required.

WHAT IS PERFORMANCE MANAGEMENT?

Managing performance is a continuous process which involves making sure that the performance of employees contributes to the goals of their teams and the business. Good performance management helps everyone in the organisation to know:• what the business is trying to achieve • their role in helping the business achieve its goals • the skill and competencies they need to fulfil their role • the standards of performance required • how they can develop their performance and contribute to development of the

organisation • how they are doing • when there are performance problems and what to do about them


Helps us get the best out of employees

Which helps us achieve more as a team

Creates a fairer, consistent process where good performance is recognised

Employees feel happier and more motivated

Employees understand how their role matters

Employees behave in the right way

WHY IS PERFORMANCE MANAGEMENT IMPORTANT?


ROLES AND RESPONSIBILITIES

The Five Key Elements Line Manager Employee

1 Setting expectations and agreeing objectives

• Organise a meeting with each of your subordinates to agree a set of objectives. • Do not set too many objectives.• Make sure the objectives are achievable, but also stretching.• Ensure employees know how the objectives relate to the organisation and department’s goals

• Ensure objectives are set together with your line manager, to ensure both of you have the correct expectations of what needs to achieved by the end of the year.• Choose objective you are happy with and feel will challenge you throughout the year.

2 Measuring and assessing performance

• Organising monthly or more regular one-to-ones. • In these meetings discuss performance and give honest constructive feedback.• Make sure the employee knows how well they are performing in relation to their objectives throughout the year.

• Making sure you and your line manager have a monthly one-to-one in the diary.• Ask whether your performance is on target.• Ask how you can improve.

3 Giving regular feedback

•You need to ensure you give employees constructive feedback to help them improve.• This feedback should be positive as well as constructive.

• Make sure you ask for regular feedback from your line manager and other people you have produced work for. • Take the feedback on board and use it positively to improve your performance.

4 Development planning

•Ensure that each employee has a development plan.•Work with the individual to develop this plan with areas that could be improved to achieve their target that year.• Give advice and examples of what development objectives and plan could be in place to achieve to reach this target.

• You should think about what you want to achieve within the year and discuss this with your line manager•Lay out an achievable number of development objectives• You need to think of your greatest strengths and build on these as well as developing your weaknesses•In terms of activities, will you be learning on the job or will you need some learning options outside of your role?

5 Improving performance issues

•Identify why these performance issues are happening• Discuss them honestly with the employee and support them in combating these issues.

•You need to regularly ask for feedback • Make sure you listen to your line manager and use their advice to improve your performance.


What are objectives?

Objectives are the activities an employee is expected to perform in their role. They typically refer to outputs, such as:

• the number of new customers recruited by the end of the year • the time it takes to clear an invoice or process an application • the quality of a product, for example, improving customer satisfaction by 25% over

the coming year • the money that is generated in sales.

These objectives should be agreed with the employee, as this will make them more relevant. If you have several people doing the same job, it may be worth agreeing common objectives.

Please refer to the “Capturing Objectives Form Template” for further information.

PERFORMANCE MANAGEMENT – THE KEY ELEMENTS

1. SETTING EXPECTATIONS AND AGREEING OBJECTIVES


How do I set objectives?

Objectives should be based on an employee’s job description and form part of the wider aims of the team and business. They provide a link between the job of the individual and the business vision, giving an employee some wider context for the work they are doing.

The ‘SMART’ acronym is a useful way of getting objectives right. Objectives should be Specific, Measurable, Achievable, Relevant, Timebound: 1. Specific – objectives should state a desired outcome. What does the employee need

to achieve? 2. Measurable – how will you and the employee know when an objective has been

achieved? 3. Achievable – is the objective something the employee is capable of achieving but also

challenging? 4. Relevant – do objectives relate to those of the team/department/ business? 5. Timebound – when does the objective need to be achieved?




What’s the difference between objectives and competencies?

If objectives describe the output achieved by an employee – the ‘ends’, competencies describe the qualities an employee needs to reach these ends – ‘the means’. For example, a hotel receptionist clearly needs to look after guests as they arrive. The receptionist might have: • Objectives for checking in each guest within five minutes of arrival and answering

all calls within three rings, and • Competencies for ‘customer care’, setting out the standards of politeness and

appearance required to meet the objectives, and ‘communication’, setting out the oral and written clarity needed to avoid confusion or misunderstandings.

Many employers, particularly in smaller firms, combine objectives and competencies. For example, you might agree that ‘customer care’ is a quality that should be demonstrated by meeting objectives for answering the phone, smiling at guests on arrival, wearing the correct uniform etc. For other employees, particularly those who are not customer-facing, job performance is often measured purely by objectives met.




Giving regular feedback is an essential part of the performance management process. Feedback means that employees know if they are doing the right thing, how well they are doing and what they could be doing better.

Feedback should be two-way (i.e. colleagues should be able to feedback to their line managers too). Feedback can be:

• In the moment (i.e. Just after a piece of work is completed)• Given during scheduled one-to-ones (e.g. monthly)• Given at year end reviews • Collected from a number of sources (i.e. peers, managers, direct reports)• Discussed regularly

A good approach to take with performance management is ‘No Surprises’, in other words employees should know how they are performing and it shouldn’t be a surprise if they find out they have not been doing a good enough job all year.

Please refer to the “Monthly One to One Form Template” for further information.


2. GIVING REGULAR FEEDBACK


Sometimes giving feedback involves having difficult conversations. This word bank gives some suggested word patterns to use:

Positive Feedback

I was very impressed when you...You stepped out our comfort zone

to...which was impressiveThe way you handled...was excellent

You thought outside the box on...You’ve helped to improve....

You’ve worked very well with....You’ve really helped ... improve

Developmental Feedback

There were quite a few errors in...I’ve had feedback that you’ve not...

I thought you could have done more on...I don’t feel you have fully achieved this

objective...It would be good if you were taking more

ownership for...

Open QuestionsHow do you think this month/year has gone?

What would you do differently?What are your key achievements?

What do you think are your development areas?


2. GIVING REGULAR FEEDBACK


What are one-to-ones?

One-to-one meetings are part of a healthy, positive management process and are an essential process through which employees and line managers can communicate constructively about work matters and provide a valuable coaching opportunity. Discussions will include:• The employee’s work and wellbeing; • Their team involvement; learning and development; • The support provided by their line manager • Values and Behaviours observed

One-to-one meetings compliment the annual performance management cycle and specifically the end of year review. Effective one-to-one delivery throughout the year should result in motivation for employees and lead seamlessly to an annual review that is able to be a positive experience with no surprises focusing on development and future planning.


3. MEASURING AND ASSESSING PERFORMANCE


The Purpose of One-to-One Meetings (1)

• To ensure that the employee receives support and feedback on their performance and to check that objectives remain achievable yet stretching whilst still aligned to the needs of the business.

• A two way discussion to ensure that both line managers and employees are aware of each others views, ideas and feelings.

• To provide the time and space to build relationships that foster an open and trusting environment. This should promote two way feedback that is prompt and direct in order to identify potential opportunities and challenges quickly.

• An opportunity for line manager and employee to discuss individual performance and to evaluate achievements and highlight problems.

• A review of development / career planning should be undertaken and this should encompass developing skills, knowledge and ability.




The Purpose of One-to-One Meetings (2)

• An opportunity to raise and discuss any concerns around attendance, sickness and time keeping.

• An opportunity for coaching to take place with line managers helping employees develop decision-making capabilities and problem solving skills.

• To clarify an employee’s role, responsibilities, the standards required and their accountability.

• One-to-ones also provide an opportunity to undertake pre and post training briefings of any training during the period so that the learning can be embedded and further developed.

Please refer to the “Year End Appraisal Template” for further information.




Prepare Follow-up

• Schedule meeting – ensure employee has time to prepare

• Book meeting room

• Set aside time to prepare properly

• Review performance against objectives

• Review documentation e.g. self input

• Gather feedback from others

• Collate own observations and supporting evidence

• Review previous review actions

• Consider what you are going to say

• Get in the right frame of mind

• Document agreed actions

• Follow-up on tasks resulting from review meeting

• Monitor more closely particular areas of focus over next review period

• I felt supported• I came up with my own

actions• I took responsibility• I feel appropriately

stretched

Agree Actions & Next Steps

Agree Actions & Next Steps

Identify Strengths &

Areas for Development

Identify Strengths &

Areas for Development

Review Performance

& Rating

Review Performance

& RatingOpen &Outline

Open &Outline

• Purpose of session• Structure of session

and timescales• Describe preparation

activities

• Review objectives• Performance

against targets• Performance

against standards• Indicative

Performance rating

• Strengths based on evidence

• Areas for development based on evidence

• Identify and agree areas for focus

• Identify and agree actions

• Agree date for next review

• Be Open & Honest• Listen Actively• Question Effectively• Build Confidence &

Competence

• Build on Strengths• Be Collaborative• Be Supportive

• Use Positive Language

• Grab Attention with Evidence

• Deal with Situation not Person

• Be Warm & Friendly• Be Present

• The feedback felt objective rather than subjective

• I had time to think and a chance to respond

• I was listened to• I understood what

was being said• I was reassured /

encouraged• I learned something

about myself

• I had time to prepare• I felt important

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3. MEASURING AND ASSESSING PERFORMANCE – ONE-TO-ONE CRIB SHEET


Development Plans play a key role in providing employees with a framework that will help to build new skills, refine behaviours, and acquire different experiences. In turn, this will improve business performance year on year, as the employee develops both personally and professionally.

Getting started

A development plan should include:

• What is needed to develop in current role, increase knowledge and skills and improve on personal behaviours.

• Development for both job specific expertise and for overall competencies.

• Aspirations for long-term career and how to work towards them.

• Realistic timescales and deadlines for accomplishing activities.

• Timescales for meeting to discuss progress.


4. DEVELOPMENT PLANNING


What does a good development plan look like?

It should contain up to three development areas to focus on to address skills, behaviours or career aspirations.

An employee should ask the following questions:

• What do I want to achieve this year?

• What are my greatest strengths and how can I build on them?

• Do I have any development areas that make it difficult to do my job or prevent me from reaching my goals?

• Career discussions – where am I going, where do I want to get to?

• Do I need to consider feedback I’ve received from my manager, peers and their suggestions for being more effective?

• In terms of activities, will I be learning on the job or will you need some learning options outside of my role?




Hints and tips for employees.

• Think creatively about development activities. For example, move beyond training to consider work shadowing, mentoring, informal coaching, creating additional roles/responsibilities, team presentations etc.

• Remember that great development plans are: owned by YOU, focused on strengths and include a range of targeted activities.

• Development plans are about skills, personal behaviours and the realisation of career aspirations.

Example Development Plan



Development need Action Review

I wish to learn more about my leadership skills and how I can alter my style to be a more effective leader.

1. Ask for 360-degree feedback and identify 2-3 development areas.

2. Undertake a mentoring role for…3. Assess my personal style in meetings and

discuss key successes and areas for development with line manager.

1. By end Q12. By end Q23. By end Q3

I would like to undertake further training on Excel to facilitate the financial analysis undertaken within my current role.

Review available coursesSearch for online tutorials via GoogleAsk colleagues for support



5. IMPROVING PERFORMANCE ISSUES

Regular one-to-ones and the end of year performance review consider an employee's objectives; how well they have performed against these objectives; whether the employee was given the tools necessary to accomplish their tasks; performance areas to improve; and what the employee has not accomplished that was expected, and why. Where areas for improvement are identified and/or it is considered that an employee's performance is below expectation, this should be addressed. You must begin by finding out exactly why the employee is not meeting your expectations. Perhaps the employee is unclear about what you want them to do. Determine whether issues exist that limit the employee's ability to perform the task or accomplish the objective. Four common barriers are time, training, tools, and temperament. Hold a one-to-one with the employee to identify the cause for the poor performance. Once you understand the issues, put steps in place to help the employee succeed and overcome the barriers.

Please refer to the “Performance Improvement Plan Template” for further information.




Coaching Coaching should be non-judgmental and interactive. The line manager and employee create a performance plan focused on one or two performance areas. During the work day, the coach asks questions and listens to the employee, providing feedback and support on their performance as needed. A coach can help average performers perform better by determining their potential and understanding why they aren't meeting it, developing a plan to reach their potential and reinforcing their strengths. A Coach should:

• Show confidence in the employee's ability and willingness to solve the problem. Ask him or her for help in solving the problem.

• Describe the performance problem. Focus on the problem or behaviour that needs improvement, not the person. Ask for the employee's view of the situation.

• Discuss potential solutions to the problem or improvement actions to take. Ask the employee for ideas on how to correct the problem, or prevent it from happening again.




Coaching (continued)

• Agree on a written action plan that lists what the employee and the line manager will do to correct the problem or improve the situation.

• Set a date and time for follow-up. Determine if a critical feedback path is needed, so the line manager knows how the employee is progressing.

• Offer positive encouragement. Express confidence in the employee's ability to improve

If the employee’s performance does not improve after a reasonable amount of time, it should be considered whether the employment can continue or whether the employee could be dismissed on grounds of capability.


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