Is your performance appraisal process preparing your company for success now and in the future? Are you evaluating employees from a “team vs. individual performance” perspective?
The rise of technology and an ever-changing marketplace mean that an employee’s ability to work well in a high-performing team environment grows in importance by the day. Your company is tasked with aligning itself with customer needs and staying agile enough to adapt as those needs evolve.
No matter what your industry, in today’s business environment that usually means developing a well-oiled team model to compete for the future.
Problem is, a lot of companies still measure employee performance based on individual goals alone. Appraisals built around team performance are still relatively rare.
So, how does your business go about motivating and inspiring exceptional teamwork while still rewarding individuals?
This question brings up an interesting dilemma: Individual employees naturally want and need recognition for a job well done. If your company restructures its appraisal process to focus on team performance, how will you provide feedback and mentor individuals?
Can the two performance measurements exist together – or does one take priority over the other?
Consider the following points to help you decide whether it’s time for your company to re-evaluate how you evaluate your employees.
Before changing your performance appraisal process
Before revamping your performance review process, there are some important questions you’ll need to put some thought into:
- Is there a company benefit to measuring team performance in addition to individual performance?
- Will measuring group performance actually promote better teamwork?
- How will you reward team performance while still recognizing your stellar performers?
- Is your company already good at setting objectives, milestones and checkpoints that can later be measured, or will you need to implement such a system?
- How will your team performance measurements acknowledge the various skills and experience levels within your teams?
- Will you tie compensation and bonuses to team performance? If you do, how will that impact individual compensation?
- Can you structure teams so that they make decisions in the best interest of the company rather than for their own benefit?
If you do decide to transition your performance appraisals from an individual focus to a team-oriented one, you’ll want to communicate the change clearly and thoroughly to your workforce before implementing it. Employees will need to understand the whys behind the decision, how you hope it will benefit the company, and how this will affect their compensation.
You should also have an explanation for how team appraisals will help individuals with their own career agendas. You don’t want to create a situation where ambitious workers feel frustrated or stymied.
Understanding how it all fits together
When building a team performance review system, it’s important to structure it to avoid some common pitfalls and ensure continuous improvement.
Let’s use a cable company as our example. That company’s customer satisfaction rating is dependent upon the efficiency and professionalism of an entire team or group of teams. The customer service representative (CSR) on the phone (or online chat) must sell the right package – or, hopefully, upsell the new customer on a more premium service. Then, they must collect the correct information, including address and payment details, so the installation may proceed.
The installer must arrive on time, install equipment neatly and efficiently, demonstrate how to use the new equipment, and answer any in-person questions the customer may have. Both the CSR and installer likely need support of their management to perform well individually.
So, if improved customer satisfaction and retention are the team’s goals, how do you parse out who is responsible for various portions of client interaction and reward them for client happiness? Is improved customer satisfaction or retention within these employees’ ability to impact?
A similar scenario might occur within any organization where sales, marketing, customer service and implementation teams collectively contribute to overall growth and revenue goals. Even science- and technology-driven businesses will likely have teams interacting to create the full customer experience, such as engineers who design a project that’s then implemented by a construction team.
Rewarding both the team and the individual
For team appraisals to work, you must be able to establish a direct correlation between the work someone does and the outcome. Usually this requires an appraisal that includes a combination of team goals and two to three personal goals.
This approach allows your company to acknowledge not only when team goals are met, but also when individual performers within a team make various levels of contribution. It lets you reward more experienced team members who are mentoring or training less experienced workers, and provide feedback to individuals who may need to improve their performance.
Without some sort of recognition for the extra effort some team members make, you run the risk of alienating your stars and making them feel like their extra work is unappreciated or unrecognized.
Defining team performance
While it may seem complicated to gauge team performance, some typical measurements of a project-based team may include easily definable metrics. For instance:
- Were deadlines met or exceeded?
- Were sales goals met or exceeded?
- Were budgets met or reduced?
- Has the team upsold new product lines or services?
- Did customer satisfaction ratings or retention improve year-over-year?
As a business leader, perhaps one of your best measurements is turnover on individual teams. Say you spot one team that stays together and performs well, and another that doesn’t seem to mesh and has high turnover.
Try to identify why the “A” team performs well and replicate that equation. Perhaps the “B” team has the wrong mix of personalities, skills or experience. It could be that the high-performing team adopted a new online platform that facilitates their workload and collaboration. Or maybe they created a more efficient process that streamlines their workflow.
Identifying key team differences can help your business improve across the organization.
Making the transition
Like any new business idea, team performance appraisals require a deft hand and serious thought from management in order to be implemented successfully. Don’t expect the transition to be all rainbows and unicorns where everyone magically works well together just because you say so. Leadership must clearly identify ways to measure the optimal team size, authority levels and required skills, and then help with conflict and collaboration.
Employees are the engine that drives every business. Your performance appraisal process should represent all the moving parts that must work together for your organization to run well. Learn more ways you can help your employees perform at their best when you download our free e-book, How to develop a top-notch workforce that will accelerate your business.