Four Steps to Effective Performance Management

Performance management is not just about dealing with the poor performers. Instead, it is a holistic process that begins with getting the right people, setting employee expectations, and coaching employees to do the best work they can, not only to benefit the credit union but also to develop the employee along his or her career path. Successful implementation of these three steps will help you avoid the last step: terminating poor performers or employees who do not fit your credit union.

Step 1: Getting the Right People

In sports, the coaches with the best records are usually the best recruiters. The same thing applies to the workplace. If you get the best talent, you have to spend less time “coaching” their performance. Getting the right personnel starts with your recruiting efforts. It continues through the screening and in-person interviewing stages. This part of the process involves using criminal, credit, motor vehicle, education or other background checks that are legal and appropriate for the position you are seeking to fill. These background checks are especially important for employers in the financial services industry. It also continues through the introductory period of employment where you are trying to figure out whether you made a good decision to hire the new employee.

Step 2: Setting Expectations

Once a selected applicant becomes your employee, you provide that person with a thorough orientation to your credit union and how that person will fit into your organization. Tell the person about your members, values, culture, benefits, rules and expectations for successful performance. The more precisely you articulate these expectations, the more likely the person is to meet and hopefully exceed them and those of your members. This orientation stage is important in getting the new employee excited and positive about the opportunity to work with you.  As the saying goes: “you never get a second chance to make a first impression.”

As part of the orientation process, you will need to complete all the basic employment forms and to provide the new employee with a detailed employee handbook. That is also the time to execute any employment agreements or restrictive covenants that may contain confidentiality or non-competition provisions. Having these documents in place will convey the image that you operate your credit union in a professional manner and that you expect the employee to act professionally, too. The orientation process is also the time to educate credit union employees about the various rules, regulations and procedures unique to the industry.

During the course of an employee’s employment, you will also issue policies or directives relating to different matters of significance. Clearly articulating your expectations in writing will help to make sure employees are aligned with your expectations and, hopefully, prevent employees from straying outside the bounds of acceptable performance and conduct. Having these written policies in place will also become important if litigation arises.

In addition to just issuing policies, credit union employers need to train employees and managers about their policies. Any training should be documented by requiring attendees to complete sign-in rosters and/or individual “acknowledgement of training” forms to be retained in the employees’ personnel files.

You should also provide employees with on-the-job training opportunities to work with peers so they can learn to do their jobs better. Again, as with clear policy direction, on-the-job training can help employees succeed in their jobs and minimize the need for negative performance counseling, discipline or even termination.

Step 3: Performance Coaching

If you get the first two steps right, then your job of performance “coaching” becomes easier. But even with high performers, you need to have pre-existing mechanisms in place to periodically review and “tune-up” performance. Of course, these same mechanisms need to be in place so you can deal with improving the performance of mediocre or poor performers, as well. The most basic mechanisms for performance coaching are progressive discipline procedures and periodic performance evaluations.

Although progressive discipline is not required and should not be promised, most employers want to try to rehabilitate employees before terminating their employment in part because of the high cost of recruiting, selecting and onboarding new staff. To be effective, discipline needs to be timely, objective, impartial, consistent, and appropriate for the circumstances. Progressive discipline may also help to avoid legal liability. In an ideal world, employees do not engage in misconduct or poor performance and therefore you do not have to invoke discipline or even discharge to correct their behaviors.

Where discipline has not been necessary, formal performance evaluation systems can help you fine-tune employee performance. Employees want the feedback and having such a system in place allows you to offer constructive input without the employee feeling threatened. The process can also provide an opportunity for you to offer additional training, guidance and other types of support to help the employee perform better. Additionally, performance evaluation allows employers to more effectively gauge the morale of the workforce and identify areas to make changes. Finally, a good performance evaluation system will allow you to assess your bench strength and plan for orderly succession of roles.

Other more sophisticated systems for performance coaching can include, among other things, 360 degree reviews, individual coaching either from within or outside the organization and even professional interventions.

Step 4: Getting Rid of Poor Performers

If all your attempts to set expectations and rehabilitate poor performers fail, the last resort is transitioning poor performers out of the credit union. When done correctly, termination of poor performers or those who engage in misconduct may also help a credit union avoid legal claims for negligence, breach of fiduciary duty or other causes of action. Termination of employment is the most negative of the performance management tools but its utility cannot be denied.

Conclusion

Rather than reacting and finding ways to get a poor performer to do a better job after a problem surfaces, you should look at performance management as beginning when a job opening is created. Invest in the preliminary activities of recruiting, screening, orienting, training, setting expectations and creating effective performance evaluation systems. The ultimate goal is to get high performing employees and to avoid disciplining and discharging poor performers. Achieving this lofty goal will be best for your business and help to avoid or at least minimize your exposure to expensive employment litigation.

D. Albert “Bert” Brannen and Ted N. Boehm Jr. are attorneys in the Atlanta office of Fisher & Phillips LLP, a national law firm which represents employers in labor, employment, employee benefits, business immigration, workplace safety and civil rights matters. They can be reached at dabrannen@laborlawyers.com or 404.240.4235 for Brannen and tboehm@laborlawyers.com or 404.240.4286 for Boehm.

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