You experience what you incentivize. A new year is coming, plan for those new goals and objectives now to bring out the best in your team!
This is a top 5 problem for executives, leaders, and employees alike: how to manage the best performance. They rarely look at how they are incentivizing behavior though.
Individuals, including executives, look to their bonus goals to drive their behavior. Whatever drives up their incomes or benefits gets the most attention and the most time spent. You tie bonuses and benefits to the right behaviors and you’ll usually experience the productivity you desire.
Take a tech services sales person who’s incentivized to sell services. She will do whatever it takes to get that sale. Instead, you should incentivize her to sell a successful services project with measurement on profitability, on-time schedule completion, and future business. This will encourage her to ensure the quote/bid is realistic and that the delivery team has what they need to succeed too. Encourage success, not just the sale.
People management is tricky and goals need to be measurable and objective. This requires long-term planning, goal articulation, the break-down into tasks and milestones, and how each person fits into its success. As you can see, this is somewhat complex and forward thinking… most people are too focused on “fighting fires”, or the daily grind, than being innovative and articulate. And yes, you can’t simply have grand innovative ideas, you have to be able to articulate the path to get there.
Either you have someone, or a few someones, in the company that can do this (they are your strategy and innovation experts), or you hire them… now. You may continue to truck along without them, but stop reading this (or any leadership article) if this is your plan. Without experts in strategy and innovation you will continue to have talent issues, and growth plateaus. Ideally they reside within your leadership team.
Let’s assume you have this expert, and have articulated your long-term goals. You’ve broken them down into milestones and assigned those milestones to groups for action. How you use these to incentivize individual goals is the most important aspect for team and individual performance management.
Creating goals and objectives:
- Consider quarterly goals with monthly milestones. You can have weekly or bi-weekly milestones for certain items, but only consider this when you need to task manage an entry-level employee.
- A goal will be a specific piece towards completion of a team/group goal, or the company goal directly. The goal does not include the “how” unless that “how” is regulated or a piece of a compliance mechanism.
- Milestones allow for reflection on the “how” part… meaning, if the employee chose HowPath#1 and the milestone fails, then they can change paths to HowPath#2 in order to succeed in the quarterly goal as a whole. Milestones can also tie into other employee goals if they are requirements for forward movement.
- Objectives allow for the change in goals. You create a goal based on information you know today, and speculate on for tomorrow. If data changes, as it always does, the objective may change. Articulating objectives as they relate to goals allows everyone to have ownership in stating “this no longer applies” when data does change. If an objective changes, it’s a trigger for goals to change.
- Goals completed to date “count” in an employees evaluation. However, future goals are always subject to change based on current objectives.
- Companies love adding “corporate objectives” as a line-item for an employee to make their bonus. These are fine if they’re 1) Objective and expressed, and 2) Across the board for everyone, and counted equally, for all employees (including founders, executives, leadership). If it’s meant to measure the group as a whole, it should do so equally. Great way to build animosity is to make this apply to sub-leadership one way, and leadership another.
- Monthly review of goals and milestones are a must for everyone. For entry-level employees, or new managers, weekly or bi-weekly catch-ups encourage communication and trust. Your goal as a leader is not to task or micromanage (unless you’re guiding a very new entry-level employee). It is to review and brainstorm ideas for successful completion.
- Remember that goals, objectives, and milestones need to be measurable, expressed, and objective. Goals around feel-good team stuff will create cliques, build animosity, and segregate introverts. Most people want to work in harmony. If they don’t, consider “soft-skill” goals around communication and emotional maturity. Working with a coach can help you articulate those goals and make them measurable and objective.
What to reward your employees with… their incentives:
- Salary, and salary increases. Everyone wants more money in their pocket. And although the Fed seems to think the cost of living is under 2%, employees are expressing how food, housing, and utilities have skyrocketed. Be as generous as you can with your talent, especially your top talent.
- Bonus. Did you know most people spend their bonus on either paying off/up bills or buying stuff for their family? Be generous with bonuses too, but I’d also recommend inviting a financial coach in for a holiday/new year talk on how to best use that bonus. Your employees should be as educated as possible when it comes to money management.
- Stock/ownership. They work towards making the company successful, they would love a piece of that success. Stock is a sticky subject, for sure, but look into ways to reward top talent with ownership.
- Benefits. This is the reward that requires you to talk to, to know, your employees. What do they want? If you have performance management clearly defined, you’ve mitigated the risk of abuse.
- Vacation time. Many companies are moving towards the unlimited vacation time. Executives have had this options for decades. With a properly written policy and performance goals management, unlimited vacation is possible. Either way, look to out-do your competitors on vacation time.
- Unpaid leave. Some employees would like to take a few months off and no lose their job. Look for ways to make this happen for your top talent.
- Working from home. Remote employees are just as productive, and often more so, than on-site ones. Most roles, not all, can fully function from a remote location. Face-to-face meetings are common now with applications like Skype and Zoom. With globalization being more mainstream, it’s in your best interest to create your remote location process.
- Flexible schedule. So many things happen between 9am and 5pm. Giving your team the flexibility to work around other needs is a benefit that doesn’t cost you but brings less stress to the team.
- Free breakfast or lunch. Free meals are something everyone talks about. No, doughnuts or bagels aren’t enough. Think curry, baked salmon, mini-burgers, etc. This doesn’t have to be daily, but often enough that it’s recognized as a regular benefit.
- Discounts on special items, or to get coveted items for free (iPads, the new iPhone or Watch, a gift from a catalog. Large companies offer this in spades… and why they attract top talent. It’s easy to get business accounts almost anywhere. Even small discounts are appreciated.
- Paid volunteering time. We want to encourage giving back, but many cannot afford taking time off to do so. Make it easy, give them a day a month to volunteer. Benefits your company, your employee, and your neighborhood.
- Training. Both hard and soft skills are important areas of employee training. Offer reimbursement for continued education, and coaching. The team that develops their technical skills, along with communication and emotional maturity, will be a higher performance team. You’ll also encourage “stickiness”. When your employees learn to communicate better, and see others doing the same, they’re inclined to stick around and develop a deeper relationship.
- And? Ask. They’re your team, find out what they’d like!
Need some help in creating a progressive and successful performance management process? A quick 15-minute conversation will help you decide if you can benefit from our services: