Simple Performance Management Techniques for SMBs


Businesses of all sizes depend on the performance of their workforce. If an employee is not performing to expectations, the organization is essentially wasting its resources and failing to meet its goals. For small businesses, a single underperformer can have devastating effects — so business leaders in small and medium-sized businesses need to know how to manage the performance of their teams to foster success.

Fortunately, performance management does not need to be complex. Here are three simple and straightforward techniques that give SMB leaders the tools they need to achieve a high-performing workforce.

Performance Planning

It is impossible to know whether workers are performing highly or poorly if there is no metric against which to measure them. Performance plans offer structure to help business leaders and workers alike understand and meet (or exceed) expectations.

Performance planning can be intensive, with systematic objectives mapped out years in advance — but it does not need to be. Smaller organizations that rely on flexibility and agility might benefit by a performance plan that projects only a few months in advance and requires regular review from business leaders to ensure the workforce’s goals align with overarching business strategy.

Still, the most essential component of performance planning, goal setting, cannot be ignored by any level of business. To ensure that workers are guided by the right goals, business leaders should take full advantage of the SMART system for goal setting:

  • S: Specific. Goals should be well-defined, explaining the who, what, when, where and why.
  • M: Measurable. There should be criteria for measuring the progress and success of goals.
  • A: Achievable. Unrealistic goals are not beneficial, so it is essential that goals align with workers’ knowledge and skill.
  • R: Relevant. All goals should interrelate and appropriately reflect the needs of the organization and the realities of the market.
  • T: Time-bound. Goals should have built-in deadlines to generate gravity and urgency.

Generally, it is wise for business leaders to develop goals with help from staff. Employees have important insight into processes and trends that can affect business outcomes, so utilizing their knowledge in goal creation can help drive success.

Performance Evaluating

At least once per year — but ideally once per quarter — business leaders should review employee performance in one-on-one meetings. During these conversations, workers can receive advice for improving performance, and workers can offer their perspective on business operations.

Some managers and employees view performance reviews as a waste of time, but that is likely because they have not participated in an effective performance meeting. Business leaders need to ensure that they use specific examples to evaluate an employee’s performance over the previous period, and they should talk with their workers about the most important aspects of their present and prospective roles. These one-on-one meetings are excellent opportunities to deepen an employee’s relationship with the company, so SMBs should not allow performance evaluations to be boring or futile.

Performance Coaching

Performance reviews are important — but they should not be the only source of feedback that employees receive from business leaders. SMB managers should strive to take on a coaching role within their organizations, helping workers improve their strengths and develop the skills and knowledge they need to boost performance even higher.

There are plenty of marked differences between managing a staff and coaching a business team. Managing typically involves overseeing business concerns to give workers the resources to achieve an intended outcome. In contrast, coaching is focused on helping workers learn and become independent. There are a few different programs for effective coaching in business, to include:

  • The GROW model. Establish a goal, examine the current reality, explore options and cultivate a will to succeed.
  • The OSKAR framework. Identify the desired outcome, determine the scale of success, understand the know-how required, affirm positive processes and set course of action, then review the entire process.
  • The micro-learning method. Create short, daily activities that are repeatable to ensure learning through experience.

Performance matters, especially in small and medium-sized businesses. By focusing on a few simple techniques, business leaders in SMBs can develop effective performance management systems that keep everyone in the company working toward success.