Learning & Development

[How to] Create a Performance Plan (9 Proven Steps)

Performance planning in business is vital to both the success of the employees and the company overall. Without proper preparation, your operation won't run smoothly.

Performance planning is a structured approach consisting of several steps to achieve outlined goals either for an individual team member or a team within the organization. But before you formulate a plan, it's essential to understand why performance planning is needed.

Here's the proven 9-step process for developing a performance plan.

Creating a performance plan

Now that you understand the objectives of proper performance planning let's look at the steps in the process. Before you sit down with an employee or a team, it's important for you and the employees to prepare for this meeting.

1. Automate the process

Gathering all the data from both employees and managers, this information should be stored in a centralized system like an Intranet or, even better, a learning management system. For example, you could create templates for managers and employees to fill in the planning questions. Plus, past reviews could be stored in this system as well, so it makes for easy referencing by managers. And by using a system like an LMS, you can assign these questionnaires to both managers and employees as well as give deadlines for filling everything out. That way, everyone is prepared for the performance review process, and everything is documented in one central location. This step will save time and help keep everyone organized for the pending review.

2. Explain performance reviews

While regular sit-down reviews should be part of performance planning, they should not be a formality nor take the place of ongoing communication. It's important during the onboarding process for employees to understand your company offers open communication that is open-ended. In other words, problems should not be saved for review time but handled before they become larger issues. This goes for both managers and team members. And it's important to reiterate this come performance review time. If employees voice concerns about company culture during their reviews, there may be a larger company issue that should be addressed.

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3. Align goals

Next, you'll want to look at the company goals and compare these with the goals of the department as well as those of the employees. If everyone did their performance planning properly, this step should be easy. Just make sure managers outline what the company is expecting of the employee so that any individual goals can be adjusted if need be. This is also a great opportunity to see how the employee feels about the goals outlined and to ask for any positive or negative feedback.

4. Define tactics

After the goals have been set, how will employees meet these goals? What resources will they need to do their jobs properly? Again, this is a great opportunity to utilize a learning management system. See what documents, training materials, and manuals are stored and assign each employee to the necessary tools. While it's not necessary to walk employees through each tool, it's important to discuss what learning tracks they will be taking, any major deadlines, and walk through the overall process. By discussing the tactics with employees, holes can be discovered, and concerns can be raised to help streamline the process better.

5. Connect employees to the bigger picture

No matter what size your company is, employees and even teams can feel disconnected from one another. While it's vital to focus on individual and department goals, it's necessary to keep the big picture in mind. So during performance planning, discuss how an employee's role directly impacts the company. Also, discuss which individuals and departments an employee should be interacting with to reach their goals. And if they have questions along the way, who is the best contact for which questions may arise. Not only will this help with company communication, but it gives purpose to each employee's job within an organization.

6. Discuss performance

Once you set the tone for the meeting, it's time to tie each employee to the set objectives. Make sure to start this conversation on a positive note. Point out what each employee excels at and how their job is directly tied to current company success. The more challenging part of the conversation is areas of improvement. No one likes to be lectured, so choose a few points you would like to discuss. Then show how making these corrections will benefit the employee directly. For example, if an employee is not completing tasks on time because of limited software knowledge, explain how further training will help them to boost productivity.

7. Create an ongoing communication plan

After discussing any issues throughout the performance process, create a communication plan in the future. While you've already established open communication lines, this takes the process one step deeper. By creating a concrete process, employees will understand what they are expected to achieve, how well they are meeting the set goals, and how their managers can help them better meet these before the next performance review.

8. Set regular performance reviews

Once your meeting is concluded, you'll want to set a schedule with each employee as to when your next meeting will take place. While it varies how often companies hold these meetings, there is an overall shift away from the yearly performance review. In fact, more than 90 percent of employees would prefer their manager to address mistakes and learning opportunities in real-time, according to a study done by Wakefield Research. So scheduling frequent conversations throughout the year or even the lifecycle of a large project is important.

9. Analyze the performance process

Performance planning can always be improved. Take the feedback from each employee and create a post-write-up for each review. Then before the next review period, go back and analyze this feedback. If there were patterns mentioned by employees, consider tweaking the process. You want the most productive teams possible, and you also want to empower your employees to evoke change when needed. So by taking these comments and applying them in the future, you'll show that everyone has a true voice in further shaping the company.

Objectives of performance planning

1. Clearly defined business goals

Before you can develop a team or individuals within your organization, you must first have vital business goals in place. In other words, what are your short-term and long-term objectives for your organization? If there are areas marked for improvement, make sure you have goals in place to resolve these. Corporate communication is key to successful organizations, and having these goals in place will give you the foundation to build employee success. Plus, strong goals provide employees with a road map. And once they know they understand the company's direction, it will be easier to create goals on an individual or team level. Finally, without employees, you can't achieve your company goals. So by aligning the company and employees' goals, it acts as checks and balances on your goal creation.

2. Set expectations

Another objective of performance management is to define expectations both for employees and managers. For example, looking at the company's goals, what is reasonable regarding job duties and timeframes to complete these? Managers should work to get these goals achieved but not overload employees in the process. Plus, team leaders need to look at the skills of each team member to determine what workload is appropriate for each person. In return, senior management needs to set expectations for managers.

3. Open communication

The overall point of performance planning is to lay out a plan, but what looks good on paper may not translate once put into action. That's why there needs to be open communication between senior management, team leaders, and employees. Everyone should feel free to voice concerns, suggest changes, or suggest a shift in direction. So keeping an open mind and fluidity in project management is essential. Managers should check in regularly throughout the performance planning process to see how it's working. And vice versa, employees should communicate with each other and their managers.

4. Performance standards

How will you judge your performance planning? Before beginning your plan, figure out how you will analyze its success or failure. Every team member must pull their weight to achieve the goals. If they don't, the plan fails. So checking in at regular intervals with each employee is key for managers. On the flip side, employees should not wait until a problem snowballs to speak up.

5. Training needed

Most importantly, what training will your teams and employees need to meet this plan? Training not only benefits the company, but it promotes personal growth for employees, which increases their skills.

What's your goal with performance planning?

Proper planning is the key to success in any business. Take time to set business goals and then sit down with employees to align their goals with those of the organization. The more open and honest you can be with your employees, the more receptive they will be to change and constructive advice. And when everyone works together, it will propel the business forward with a workforce that values a cohesive culture.

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