This document outlines key considerations for designing and implementing an effective performance management program for small businesses. It discusses setting organizational, team, and individual goals aligned with business strategy. It also covers benchmarking skills and tools for success, providing consistent feedback, and identifying top and poor performers. An effective program can improve employee engagement, performance, retention of top talent, and overall business success. The document compares development-driven and competitive assessment models and their benefits.

1. Designing and Implementing
Performance Management
Program for Small Businesses
Presented by Joanne Melanson
Director, Professional Services

2. What is Performance Management (PM)?
• Setting and achieving organizational goals that
produce desired business results
• Aligning individual and team goals with business
strategy - organizational change, growth, finance,
people
• Benchmarking; Determining and obtaining skills,
knowledge and tools required for success
• Staying on track with consistent, timely
communication & feedback (360 degrees)

3. Key Considerations for PM Program Design
• Corporate goals - short and long term plans
• Team goals - group contributions to company goals
• Individual goals - organizational, career, personal
• Management and Leadership skills - HR knowledge
• Job Descriptions - roles, relationships, accountability
• People - knowledge, skills, competencies, potential
• Actions - required to implement and follow-up

4. Business Performance Process / Key Indicators
ORGANIZATION
Business
Development TEAM
Productive aligned
Customer workforce
Service & INDIVIDUAL
Retention
Synergistic
Human collaborative teams
Satisfaction/ Training &
Resources
Strategy Engagement Development
Future Leaders /
Financial Succession Plan
Success / ROI / Career
Rewards &
Profit Progression
High Performance Recognition
/ Retention
Culture
Market Position
/ Branding

5. Benefits of Effective Performance Management
• Identify goals, challenges, strengths, gaps in
performance
• Identify gaps in knowledge & skills – Training &
Development / Recruiting
• Improve employee and team engagement /
performance
• Identify top performers – reward & retain
• Identify poor performers – correction or exit

6. Benefits of Effective Performance Management
...cont’d
• Determine & justify decisions and actions – merit,
bonus, compensation, promotion, succession,
discipline, termination
• Enhance success factors / Reduce risks and exposure
• Improve organization’s overall performance

7. HR Elements and Performance Management
• Business Plan; • Attract & hire best
Goal setting talent
• Succession • Job Descriptions
Planning • Orientation
• Communication; • Culture; Fit
360 Feedback HR Strategy Recruitment
Employee Training &
Engagement Development
• Performance • Align to
Reviews organization needs
• Reward & • Career progression
Retention • Coaching; Mentors

8. Development Driven PM Model
• Coaching and development improve employees’
performance and retain most talented.
• Identifies strengths and weaknesses at individual,
team and organization levels.
• Allows for input from all stakeholders.
• Consistent and thorough follow-up at regular
intervals for development plan effectiveness.
• Used by 64 % of companies (Bersin Research 2010)

9. Competitive Assessment PM Model
• Evaluates employees against goals and one another;
encourages competition / high performance.
• Aim is to reward top performers and weed out poor
performers; forced ranking / distribution.
• Viewed negatively due to adversarial culture
• Used by 36 % of companies (Bersin Research 2010)

10. Performance Potential Model
• Backbone (workhorses) • Stars (future leaders)
high performance / low potential high performance/ high potential
• Acknowledge effort and contribution. • Agree challenging work, projects,
• Utilize as coaches and mentors. responsibilities, or stars are likely to leave.
• Look for each person's hidden high potential, • Give appropriate coaching, mentoring,
undiscovered passions, etc., and offer new training and career development.
challenges and responsibilities as • Explore and encourage leadership and role-
appropriate, so these people too can be model opportunities, to set and raise
stars, to the extent they are comfortable. standards of other staff.
• Icebergs (deadwood) • Problem Children (renegades)
low performance / low potential low performance / high potential
• Counsel, build trust, understand issues. • Confirm and acknowledge potential.
• Identify hidden potential. • Counsel, build trust, understand issues.
• Facilitate better fitting roles; more direction, • Explore and agree ways to utilize and
purpose, opportunities, etc., linked with and develop identified potential via fitting tasks
perhaps dependent on performance and responsibilities, linked with and perhaps
improvement. dependent on performance improvement.
• Failing this, assist or enable move out of • Explore attachment to backbone or star
organization if best for all concerned. mentors and coaches.

11. Performance Management Program
Implementation
• Determine organization direction and HR strategy
• Create customized PM systems and processes
• Communication with managers and employees;
Change Management
• Implementation training for managers and staff
• Follow up at regular intervals, i.e. quarterly, semi-
annual, one year and each subsequent year
• Adjust/realign as required – goals, criteria, purpose

12. Armstrong & Associates services
• Human Resources Management
• Strategic Planning
• Training and Development
• Compensation and Benefits
• Health and Safety

13. Client benefits from Armstrong & Associates
services:
• Improved strategic focus
• Reduced overhead
• Increased efficiencies
• Enhanced staff productivity
• Increased profit
• Reduced risk and conflict
• Decreased employee turnover
• Improved time management for leadership and staff

14. Q&A
Thanks!
Joanne Melanson
Tel: 416.697.0707
joanne@armstrongandassociates.ca