Performance Management – 海角社区 /blog/performance-management/ The operating system for businesses Fri, 20 Dec 2024 12:36:58 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 /wp-content/uploads/2017/05/cropped-air-icon-32x32.png Performance Management – 海角社区 /blog/performance-management/ 32 32 Key Documents for HR Professionals /blog/hr-best-practice/key-documents-for-hr-professionals/ Tue, 22 Oct 2024 19:49:32 +0000 /?p=10476 Getting the right contracts in place to manage employee relationships effectively is crucial. Finding reliable, legally sound templates can however be time-consuming and costly. That鈥檚 where GitLaw steps in鈥攁n open repository for legal contracts designed to empower HR teams, startups, and legal professionals with access to essential legal documents, all free of charge. At its […]

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Getting the right contracts in place to manage employee relationships effectively is crucial. Finding reliable, legally sound templates can however be time-consuming and costly. That鈥檚 where steps in鈥攁n open repository for legal contracts designed to empower HR teams, startups, and legal professionals with access to , all free of charge.

At its core, GitLaw provides an open platform where contributors share and improve legal templates, creating a valuable resource that grows over time. The community of users up-rank documents based on their quality / usefulness. Many of the templates on GitLaw are existing market-standard templates published by a variety of teams across the word.听

The GitLaw team have published a specific collection of .听

The following are some example documents included:聽

1.

This document is the foundation of the employer-employee relationship, outlining job responsibilities, compensation, benefits, and the terms of employment. It鈥檚 a must-have for formalizing any new hire鈥檚 role and protecting both parties legally.

2.

The Job Offer Template formalizes the initial offer made to a candidate. This document outlines the key terms of employment, such as job title, start date, salary, benefits, and any special conditions. A well-structured job offer ensures clarity from the outset, preventing misunderstandings before the employment contract is signed.听

3.

A Settlement Agreement is used to amicably resolve disputes between an employer and an employee, typically related to the end of the employment relationship. This agreement sets out the terms under which the parties agree to settle potential claims, including compensation, confidentiality clauses, and the waiving of legal rights. It鈥檚 a critical tool for ensuring that both the employer and employee can part ways without lingering legal disputes, offering legal protection to both sides.

4.

When an employee leaves your company, it鈥檚 common for future employers to request a reference. The Reference Request Template streamlines this process, ensuring consistency in how references are provided. This template can help HR teams quickly respond to requests, offering standardized information about the employee鈥檚 role, performance, and tenure, while ensuring compliance with company policy and legal regulations related to references.

5.

When an employee submits their resignation, it’s important to formally acknowledge and accept it. The Resignation Acceptance Letter Template confirms receipt of the employee鈥檚 resignation and outlines any next steps, such as the final working day, the return of company property, and details about their final pay check. This letter ensures a professional and documented end to the employment relationship, setting clear expectations during the transition period.

6.

The Self Appraisal Form allows employees to reflect on their performance over a defined period, providing a structured format for them to evaluate their achievements, challenges, and areas for growth. This form is a valuable tool in performance reviews, encouraging employees to take ownership of their development and providing managers with insight into how employees view their own contributions. It鈥檚 also an effective way to foster open, two-way communication during appraisals.

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If only I’d known that! (the keys to how people tick) /blog/hr-best-practice/if-only-id-known-that-the-keys-to-how-people-tick/ Tue, 20 Sep 2016 16:17:27 +0000 https://www.joinair.com/?p=7599 With experience and hindsight comes wisdom. But don’t you wish there was a way to shortcut the often painful experiences you have while building your company? What we wish we had known At 海角社区 we are always learning and thought it would be fun to have a round up of聽the things we and others wish […]

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With experience and hindsight comes wisdom. But don’t you wish there was a way to shortcut the often painful experiences you have while building your company?

What we wish we had known

At 海角社区 we are always learning and thought it would be fun to have a round up of聽the things we and others wish we had known when it comes to looking after people.

  • You are probably a bad manager. Unfortunately. Because, most people generally are. Its not something that comes naturally. It is a skill just like computer programming, engineering, speaking a language. Being good at your job or starting companies doesn’t automatically translate into management excellence. It can be taught – and you should seek support when you start employing people. We have loads of useful tried and tested real world advice here if you haven’t managed anyone before.
  • People don’t expect you to know the answer to everything or to be always right. Its OK (good, in fact) to admit you have messed up, or don’t know the answer. What is bad, is to pretend to know, lie, or retreat into a hole when you don’t know what to do (this is tempting sometimes, we know)
  • People don’t listen to everything you say or understand what you are telling them. What? You’ve told them 5 times? And they still don’t get it? What’s wrong with these people? There is nothing wrong with them, but there is something wrong with your communication. You聽have not followed the number one rule – people need to know “WIIFM” (“what’s in it for me”). If they don’t hear or see聽this, they switch off, no matter how much noise you make.
  • People don’t work harder just because you increase their salary. They really don’t! You need to articulate the mission, provide interesting jobs, give them control over their work and ensure they understand how what they are doing fits into the big picture, and give them regular feedback. Oh, and say thank you for their efforts. Read more here on performance management.
  • The thing that matters most out of recognition聽(a simple “thank you” or “well done”) OR a financial bonus, is the recognition. So why wouldn’t you do it? It doesn’t cost you anything!
  • Kindness is very important in business. We’d go to so far as to say the number one thing you should do as a leader. Understand . People are humans. They didn’t leave their emotions or feelings at the office door. Being considerate is one of the most powerful things you can do. We talked to a friend recently聽who is leaving a very well paid job at a large organisation simply because in the year she has worked there, her manager never once said good morning to her when she arrived for work, and ignored the greeting she gave him. Imagine! How simply this could have been avoided!
  • Your employees notice everything you do. Yes, everything. And they take their cue and model themselves on you. In this world, you are MUCH more important than you think. Everything you say or do sends a powerful message about the way that people should behave. Even the things you don’t notice or think are important. Think it didn’t matter that you didn’t make your colleagues a cup of tea? Or that you didn’t send them a Christmas or birthday card? That you didn’t wash up your dirty coffee cup and left it in the sink yet you just sent an ranty聽email reminding everyone to keep the kitchen clean? That that you helped yourself first to the office pizza?聽聽Think again. Here’s our guide to very simple and inexpensive ways to improve your company culture.
  • People don’t always tell you how they really feel, no matter how friendly you are with them or how long you have worked with them. We have talked to countless CEOs who tell me that all their people are very happy working at their company. How do they know? They “asked” them. Now, just think for a moment. You are a junior employee, and your boss or boss’s boss says, “do you enjoy working here?” Hmm….great to be asked, but are you really going to reveal that you think your co-workers are lazy, you are fed up that you did not get asked to contribute to the new project, or that you think you deserved the promotion not your colleague? And just before she stopped by your desk you were updating your LinkedIn profile? I wonder. Read our guide for more effective ways to take the temperature in your workplace and get real, actionable employee feedback.
  • People understand that starting companies is incredibly hard and that sometimes things don’t work out. They are adults and they can handle bad news. The worst thing you can do is to try to sugar coat it. They will see through you instantly.
  • People don’t leave your company for better pay. They leave because YOU were a bad manager.

If you are starting on your management journey we’re here for you. Take your pick of our favourite reads which will inspire and inform.

 

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Three myths about motivation /blog/fashion/three-myths-about-motivation/ Mon, 19 Sep 2016 13:04:23 +0000 https://www.joinair.com/?p=7577 As a business leader, chances are you are constantly worrying about your staff. Are they motivated? Will they go that extra mile for you? Low motivation is everywhere And you’d be right to worry, with statistics on this topic making grim reading. Depending on the industry, up to 75% of staff report feeling low to […]

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As a business leader, chances are you are constantly worrying about your staff. Are they motivated? Will they go that extra mile for you?

Low motivation is everywhere

And you’d be right to worry, with statistics on this topic making grim reading. Depending on the industry, up to 75% of staff report feeling low to average motivation at work in the UK.

Luckily, there are strategies you can put in place to ensure your people are feeling good about working for you. We’ve debunked these myths so you can learn from our experience.

Myth #1: Performance related bonus schemes are a useful tool for motivation

Unfortunately, the science on performance related bonus schemes indicates that the opposite might be true.听If people are feeling threatened by the risk of not earning their full bonus, this fear can hamper their engagement with work. Better to create a workplace and fulfilling roles that generate intrinsic motivation. When employees feel genuine intrinsic motivation for work, providing external rewards like increased pay can counter-intuitively decrease their motivation.

Support intrinsic motivation by focussing on three key areas:

  • Constant communication and feedback, enabling personal growth and development for each team member;
  • Meaningful recognition from their leader or manager, as well as their peers
  • Work that is well defined, has clear goals that are well understood and that contribute to the mission of the business as a whole.听Find out more about managing performance here.

Myth #2:聽If people perform better than their peers, they should be paid more.

Its tempting to shell out extra cash to compensate outstanding performance.听But the jury is out even on the convention聽of paying聽sales commission for top sales people. 聽And in other roles, linking results to variable pay is a minefield. There will inevitably be losers in this equation. The factor that demotivates employees more than any other is a sense of inequity. While rewarding top performers might make them feel good, the unhappiness and injustice that the others feel will infect the whole business atmosphere.

For how do you control for the myriad of factors outside one individual employee’s control? It could be that other team members let them down, that they lack resources or training, or simply that the goals were unrealistic. If you have ever tried to set up a plan that is “fair” you will know the challenge of trying to compare paying for different results in different roles. You also have the tricky questions of how do you reward those whose jobs don’t have obvious “results”. The bookkeeper. The HR Advisor. The company secretary. Going back to the salesman and her commission, is it fair that all the team supporting her on customer service, delivering the product or even collecting the overdue invoices don’t receive anything on her sales wins?

Myth #3:聽If people aren’t motivated, the answer is to increase their pay.

You should absolutely always pay what people are worth. But pay isn’t a two way street. Its a hygiene, not a motivator factor; meaning you’ll see a drop in motivation if you don’t pay the market rate, but once that need is met, motivation won’t increase exponentially with increased reward.

The key to motivation is to understand your people first and foremost. Individuals have different needs, so structure their reward to suit their lives.

A sense of purpose

Once this is taken care of, address the structural factors in their jobs. Do they feel a sense of purpose and mission about the聽business and their role in it? Do they think that what they are doing matters? Do they understand how their efforts contribute to the team and to the business as a whole? How clear are they about their objectives? How much feedback do they get? Do they feel rewarded and recognised for their work?

Intrinsic motivation in the workplace grows when employees feel challenged, capable, valued and have a general enjoyment of their jobs. Find out more about creating a company culture that promotes this here.

 

 

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Bonus schemes don’t work. /blog/hr-best-practice/bonus-schemes-dont-work/ Mon, 19 Sep 2016 09:18:48 +0000 https://www.joinair.com/?p=7573 Why we have got our approach to paying people all wrong Think you鈥檝e got your salary structure sorted? Do you believe that your performance related pay and bonus system is producing better performance? Recent insights from neuroscience suggest that most of us have been getting this wrong for decades. It鈥檚 been accepted wisdom for some […]

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Why we have got our approach to paying people all wrong

Think you鈥檝e got your salary structure sorted? Do you believe that your performance related pay and bonus system is producing better performance?

Recent insights from neuroscience suggest that most of us have been getting this wrong for decades.

It鈥檚 been accepted wisdom for some time that incentive structures be they commissions, bonuses or performance related pay schemes drive workers to go the extra mile for the business. If people are just paid for turning up, the logic goes, well, that鈥檚 what they will do. They will go through the motions and when it comes to achieving results, they won鈥檛 care enough about them to put in the graft.

Death by spreadsheet

Many businesses are operating complicated spreadsheets with individual, team, or company bonus schemes, based on hitting targets. Often, these are created by the Finance Director based on what will make a difference to the bottom line.

But the surprising truth is that far from incentivizing the performance you want, schemes like this could be having the opposite effect.

We don’t know what we’ve got ’til its gone

To understand why, we need to know some basic neuroscience. We are hard wired as a species to seek rewards and avoid threats. This makes sense 鈥 and helped keep us alive when we ran away from predators and hunted our prey. It explains the foundations of how our society is organized. Trouble is, once we have the reward, we no longer value it. Think about the many, many times someone close to you or even yourself has suffered a serious or terminal illness. I鈥檒l bet that you鈥檝e said or thought that you only appreciated your fortune to enjoy good health when you risked losing it.

We take for granted those things we have recently acquired, and quickly look for the next 鈥渉it鈥. It鈥檚 the same for our employees. Once we have rewarded them for doing something extra, they expect that to be part of 鈥渂usiness as usual鈥.

On the other hand, the threat of losing something we already have (like our good health) causes us immense stress and anxiety, to an extent that outweighs any positive emotion associated with potentially gaining the same thing!

Planning pay reviews

For example, say that you are looking at the annual pay review. You can鈥檛 decide whether to increase salaries by 3% or 4%. Someone leaks that the pay rise this year is likely to be 4% and rumours fly around. However, the business can only afford 3% and that鈥檚 what the employees end up getting. Do you think they are happy with a 3% rise in their pay? Getting more pay should make people happy shouldn鈥檛 it? In fact no, in your employee鈥檚 eyes this represents a potential loss of 1% that they thought they were getting!

So think again about how you reward your employees. We recommend building intrinsic reward into your business, to create a truly high performing business.听Start by creating an engaging company culture, where your staff love to work – and the rest will follow!

Read more of our best ideas on managing performance, motivating your staff and building a great business on our blog.听

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Help. I need to change my company’s culture. /blog/people-and-culture/help-i-need-to-change-my-companys-culture/ Tue, 09 Aug 2016 13:03:06 +0000 https://www.joinair.com/?p=6645 Culture is one of the most important things to consider in your聽company, whether its just getting going or already a successful market leader. Why? Because people want to work for companies with positive strong cultures that are aligned with their personal values and beliefs. If yours isn’t, they will take their talents elsewhere, leaving you […]

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Culture is one of the most important things to consider in your聽company, whether its just getting going or already a successful market leader.

Why? Because people want to work for that are aligned with their personal values and beliefs. If yours isn’t, they will take their talents elsewhere, leaving you with critical skills gaps. Don’t forget, your failings are out there for all to see on sites such as Glassdoor.

First, assess where you are

If you are already aware that your company’s culture doesn’t attract new talent or motivate existing employees, then you are one step ahead. We’ve seen so many leaders聽fall into the trap of believing everything is great, because no-one has told them to their face that there is a problem! Even leaders who pride themselves on being open to feedback and learning, and may well be truly great leaders, need to go beyond day to day anecdotal evidence to measure their company’s culture.

Changing culture

So, how to go about changing culture? First, diagnose the problem with a simple employee survey. Don’t overcomplicate it, focus on the key questions you think are important to your employees, or the type of issues you have picked up from your regular feedback chats. Once you are armed with knowledge, you can start to take action.

Using the data, you can analyse what the key issues are. Don’t feel downhearted if your employees criticise or are negative about ideas or working practises close to your heart. If you have used anonymous feedback (which we recommend, to get a true picture of your employee’s feelings), it can leave you wondering who said what and why. Our advice is not to dwell on the negatives, but to address them constructively.

Fixing your culture

For example, say you have found out that people don’t have clear objectives and are not clear what they need to do to get a pay rise or get promoted. In that case, look at introducing development objectives into the performance review process. Find out more about setting up a performance management system that engages people聽here.

Spend time talking to your people. Make sure you communicate why you have done the engagement survey and what you hope to get out of it. More importantly, walk the walk. You can’t expect to do a couple of surveys and “fix” the problem. Nor can you “delegate” culture to your HR person, even if they have “culture” in their job title. (Although a good HR Director should be able to lead much of the communication and planning). You can use a beautiful and simple tool such as 海角社区 to automate many of the routine HR tasks聽connected with employee surveys and other administration, to help your HR lead focus on adding value.

If you as a leader don’t buy into the culture change you want, forget it. Nothing will change. If you want change, you need to change yourself first. Start by asking yourself why you are in business. , what do you really want to achieve in your life. From this all else will follow.

It takes time

A word of warning. One employee survey does not a fantastic culture make. It takes months, sometimes years, to change things that are the root cause of recurring issues. And very often, YOU will need to change first! This is hard, and you will need to be patient.

We have lots more fantastic ideas on our blog for easily introducing state of the art culture engagement practises from the top rated culture companies into your business, without the big company budget!

Find out more about our best ideas on building a fantastic company culture here.

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7 things you should know about coaching /blog/performance-management/6-things-you-should-know-about-coaching/ Tue, 09 Aug 2016 09:52:35 +0000 https://www.joinair.com/?p=6632 Coaching is everywhere Look around you – you’ll see people being coached every day. Parents who are building skills and confidence in their kids. Sports coaches, enhancing performance and drive. Wellness and fitness coaches in your local gym or on social media. What do they all have in common? And how can you become a […]

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Coaching is everywhere

Look around you – you’ll see people being coached every day. Parents who are building skills and confidence in their kids. Sports coaches, enhancing performance and drive. Wellness and fitness coaches in your local gym or on social media. What do they all have in common? And how can you become a great coach to your team聽and in your business?

Coaching depends on a growth mindset

When done well, coaching is the process of聽harnessing the power latent in the individual to achieve beyond what they thought possible. The philosophy behind coaching is based on the . This simple belief informs the best thinking behind how to drive engagement, motivation and performance.

Simply put, a growth mindset is the belief that everyone is capable of achieving more than they think, and potential is limited only by expectations put in place by others. The opposite of a growth mindset is a fixed mindset, which is the belief that people are the finished articles, and are only capable of doing what they have done in the past. How often do you hear managers complain that “she will never change”, “he has always been like that”, “you can’t change the way people are” and the like?

Key steps to effective coaching

1. That’s why our first learning point is that to be an effective coach, you have to believe in the power of coaching first! Get a good coach yourself (ask someone you respect in your field to mentor or coach you or ask for recommendations) and put yourself through the process. Engage with it and respect it. Notice what works and what doesn’t for you and commit to changing your own behaviours first.

2. Coaching isn’t a “magic bullet” (let’s face it, in people management nothing is a magic bullet). We have often listened to managers who have attended coaching training complaining that “I have tried coaching him, but he still doesn’t change”. 聽A good leader will understand when coaching is a useful tool and when other strategies are required. Get to know your people and what motivates them and what they need from you. If they aren’t feeling valued in other ways, their job is impossible, their team mates are making their life a misery, then asking them how they see their career progression is a non starter. Fix those things first.

3. Coaching starts from where the person is now. When you start to coach, use a tool like to identify how appropriate coaching is. A new employee or someone promoted into a new role may need instruction or guidance. Use your judgement to coach at the right level. Hone your skills at coaching people at different points in their career.

4. Coaching means believing in potential. Everyone has potential, the key question is, “potential for what?” How do you know what people can achieve? By talking to them. Get to know your people. Find out what motivates them and what gives their life meaning. Then you can help them map out a growth path. Don’t assume that your drivers are theirs. The process of coaching is about taking yourself and your own needs out of the conversation.

5. Coaching is a skill. Not everyone finds it easy. And it isn’t easy to do it properly. There is plenty of bad coaching around, coaching that is really “telling” in another guise, or coaching that skirts around true challenge. Work with skilled trainers to build your skill set, just as you would your skill set in your professional field or domain expertise.

6. Proper coaching is challenging for the coachee. He or she should sometimes be pushed outside their comfort zone and be able to safely challenge long held assumptions. Its not uncommon for it to unearth quite deep emotions. But it isn’t therapy and shouldn’t be substituted for it.

7. Coaching isn’t a substitute for poor management. Don’t send your people to be “coached” and expect it to fix poor performance that is really your problem because you haven’t managed them properly. Its not a pill or a medicine! Find out more about good performance management here.

鈥淎 leader鈥檚 job is not to do the work for others, it鈥檚 to help others figure out how to do it themselves, to get things done, and to succeed beyond what they thought possible.鈥 (Simon Sinek).

Read more about motivating your team here, and find our best ideas for creating a workplace culture your people will fall in love with here.

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The 6 things you need to know about performance management schemes /blog/hr-best-practice/the-6-things-you-need-to-know-about-performance-management-schemes/ Fri, 17 Jun 2016 09:11:49 +0000 https://www.joinair.com/?p=6475 With a wealth of options now for managing performance it can be tempting to pick a system that you鈥檝e read about or is used by the competition. Don鈥檛 implement a performance management scheme in your business without considering these 6 things. 1. What do you need the system to do? What is it that you […]

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With a wealth of options now for managing performance it can be tempting to pick a system that you鈥檝e read about or is used by the competition. Don鈥檛 implement a performance management scheme in your business without considering these 6 things.

1. What do you need the system to do?

What is it that you actually want to achieve with your system? Is it to identify top performers, create a talent pipeline, reward great performance, motivate and develop future managers, futureproof the business, allocate the rewards of your success equitably or something else? All of these are legitimate reasons to have a system. And the best systems can do all of these. But they all require very carefully thought through approaches so that you achieve your goals with the system.

One classic dichotomy is the tension between reward/motivation and employee development. If your system discriminates between great, average and poor performance as a tool for targeting training and development opportunities, this is highly motivational for all employees not just those at the top. By contrast, singling out only top performers for praise and reward, be it financial or an alternative, will have a radically different impact on company culture and performance.

2. How will you manage it?

Performance management systems involve quite a bit of work once you get beyond brief feedback conversations with employees around the coffee machine. Introducing any kind of ongoing system, with more than a dozen people, especially if management tiers are involved requires planning. You鈥檒l need to keep records, train your employees and supervisors, and keep on top of the data collection process. You can use a聽software platform such as 聽to help you with this task, so take the time to research carefully before investing time and effort.

3. How will you communicate the process to employees?

We鈥檝e seen systems introduced that failed because of lack of employee and management buy-in. If people are worried about what the system means for them, and if managers don鈥檛 follow through with commitment, the system will atrophy and die. One thing is for sure, your people will take their cue from the top. If the leaders don鈥檛 invest visible time and effort into their own development as leaders, and that of their immediate direct reports, nobody else will. It will be another example of 鈥渄o as I say, not as I do鈥. Get buy in by taking on feedback, consulting and 聽Use a beautiful and simple HR platform such as 海角社区’s onboarding tasks to quickly and easily automate the tasks of informing new employees about the system.

4. How will you allocate performance related bonus earnings?

Many businesses use performance review systems to allocate a bonus pool among employees. Before rushing to one method consider carefully the unintended consequences of any decision. These decisions are more profound than you might think because they reflect deep assumptions about the and the culture of the business. For example, it can seem attractive to allocate all profits evenly across the business. This avoids any tough conversations, promotes fairness and equality and sends a strong message about teamwork. Nothing wrong with any of that, until you consider the question of how to deal with evident and clear differences in performance between individuals. Is it really fair, to give out big pay-outs to someone who is riding coattails on their higher performing colleague?

By contrast, linking earnings to individual鈥檚 performance is fraught with its own difficulties. Perhaps the low performing individuals are cursed with poor line management, or another external constraint in the business environment that they have no control over. Even something as cut and dried as a sales commission may be a proxy for the allocation of more promising accounts or territories in a biased way by managers.

Some businesses go the middle way and reward whole teams. Again, challenges arise. For example, should the accounts team get the same rewards as the facilities or marketing team? How to value their contribution over and above their colleagues?

5. How will you develop the leadership team to use the system?

If you aren鈥檛 doing all the feedback yourself, you鈥檒l need to ensure the leadership team are equipped. Without these skills, any can become at best a waste of time and at worst harmful.
We鈥檝e seen systems fail not because there was anything wrong with the system itself, but because the people who were using it didn鈥檛 use them well. When this happens, a consensus can develop very quickly that the system is useless, or even that 聽A well thought out system, such as , can really help you develop your employees skill set.

6. How does the system fit your business?

Every business is different. Your business culture will determine what system is right for you. As we鈥檝e seen above, if the emphasis is on equality and teamwork think about which behaviours will enhance better co-operation and communication and ensure your system helps people develop these. If you need to rapidly develop new hires, focus on the skills and capabilities needed to get them up to speed quickly and use the system to identify learning gaps. If you think that your business as a whole lacks capability in one critical area, for example responsiveness to change, then focus your efforts on replicating the behaviours of successful change-responsive organisations.

A successful performance management system is a key tool for any business leader. It enables you to be clear with people on the behaviours, skills and strengths they need to magnify and develop to be successful. A truly winning formula.

Read about how to use coaching to drive performance, and find out about OKRs, one of the simplest and most effective performance management tools,

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A guide to OKRs – and what they can do for your business /blog/hr-best-practice/guide-to-okr-objectives-and-key-results/ Mon, 04 Jan 2016 01:55:22 +0000 https://themenectar.com/demo/salient-corporate/?p=6144 Objectives and Key Results is a goal setting methodology that was originally developed at Intel and is now used by some of the world’s largest companies. You might have heard about OKRs. Although they are not that well known in the UK, they are credited with being the key to success for a number of […]

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Objectives and Key Results is a goal setting methodology that was originally developed at Intel and is now used by some of the world’s largest companies.

You might have heard about OKRs. Although they are not that well known in the UK, they are credited with being the key to success for a number of large companies and are widely used in the start up community. OKRs create focus and prioritization, aligning company, team and personal objectives to make sure everyone is working on the same goal.

Google鈥檚 John Doer is credited with popularizing OKRs after Google used them successfully to scale. A great way to get an overview of OKRs is to watch video.听

Companies using OKRs

The list of companies using OKRs is impressive; here’s a brief selection, there are many more!

google
intel-logo-small

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What are the advantages of using this system? And how does it differ from standard performance management?

The key to their success is transparency. Everyone from the CEO down has their own OKRs which are shared across the whole company. People in the teams reporting into the senior teams will have their own OKRs which feed into top team goals. In this way, even in a large company, everyone feels a strong sense of alignment with the direction of the company overall. This is a proven way of increasing motivation and engagement for all employees.

As in life, as in business. We recommend starting as you mean to go on. If you start from Day One with the OKR system, even if there are only a handful of employees, you will find it much easier to scale as you grow and the goal setting process becomes natural.

People crave structure and clarity, this system gives it to them. In essence, OKRs are no different to many other standard performance management systems that you may have seen in businesses. They follow a standard cycle and involve some element of grading and judgment. However, where they differ is in two key aspects.

  1. They focus on business performance above all else. The development and evaluation of the individual employee, including most probably any variable remuneration will need to be dealt with in a separate conversation; but it will be strongly informed by the performance and what the employee needs to do to achieve great performance.
  2. The transparency. We’ve seen many businesses performance management systems over the years and its rare for the top team to share their goals and their gradings with all employees including junior ones. This may be a humbling experience for senior leaders, however, it sends a strong signal about the importance of learning together and the culture of your leadership.

OKRs are made up of two parts.

If you want to go ahead and get started with OKRs, its straightforward. Here’s what you need to know.

1) Objectives:
Objectives are goals. They tell everyone where to go and align with the vision and mission of a company. Its important to start from the top level goals of the business as a whole, then align each team’s OKRs with those top level goals. Depending on the size of your business, you may have several tiers of goals for each department and team, but these will all mesh with the ultimate objective of your main business goal whether that is profit, growth, or market share.

2) Key Results:
Each objective has about three Key Results. They indicate how the team will achieve the Objectives, and translate into actions.

This is where skill and judgment enters the picture. It is often delegated to individuals, teams or managers to set goals for their teams or themselves. Clearly there is a learning process, if the actions that the team were engaged in did not deliver the results in a period, it is up to the leaders to adjust their focus.

Here at joinair.com, we’ve been using this system聽since Day One and its聽a phenomenal tool to help us all keep on track and focussed.We really try to be objective, both in setting and grading OKRs. Its such a great discipline to get into! Even when we don’t hit our OKRs, which we often don’t, we are able to be honest about why not and strive to improve next time.

OKRs connect vision with actions

While OKRs drive activity, its important not to turn them聽into a To Do list or project management tool. Teams should develop their own processes for managing day to day priorities and tasks. is a great summary of the key differences between Objectives and Key Results.

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Setting a timeline for OKRs

From the mission and vision, you derive your annual objectives.

Annual objectives split into quarterly objectives.

Finally, set the time when OKRs will be graded, results shared and learning discussed.

Grade Key Results

Only Key Results get graded. An Objective’s grade is the average of its Key Results. A good Key Result always enables objective grading. Objective grading is necessary for learning, but grading is聽never used for employee evaluation. Looking back at Rick Klau’s , he explains where the interaction between key results and employee evaluation comes. Some key results are objectively harder than others, some are stretch and some are more akin to “business as usual”. Grading is an art not a science and it is the quality of the discussion between employee and their manager and the teams that enables the system to be used as a learning process.

Set objectives where 0.7 is good
Use a scale of 0 to 1 for grading. People should target 0.7 – 0.8 on average – if they are getting 1 consistently the objectives are not hard enough.

Some activities and businesses lend themselves more easily to the OKR system. Clearly in a growth or change environment it’s relatively simple to set and use OKRs. They may not be as suitable for process based or functional support activities, although, with skill, they can still be highly effective in these roles too.

Our Recommendations

1: Set OKRs quarterly or annually
A quarter and a year are timeframes in which you really can achieve something. The same timeframes are often used to evaluate companies.

2: Aim for 3 objectives with 3 KR each
5 objectives with 4 key results each is your maximum. Otherwise it鈥檚 hard to have focus on what really matters.

3: Make OKRs challenging
Research shows that people who set challenging targets achieve more. Expect to get 70% – 80% in the grading, not consistent 100%.

4: Make KR鈥檚 number based
Numbers create objective evaluation and a learning process.

5: Review regularly and transparently
Review the objectives monthly or weekly. Make objectives public for the whole business to see.

OKRs will without doubt help you lead and grow your business. And most importantly, they are a fantastic tool for motivating your employees. You will also need to talk to your teams about their individual development. For more on this, go to this article.

The post A guide to OKRs – and what they can do for your business appeared first on 海角社区.

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