Performance Management Essentials for Construction Companies
Much has been made in the construction industry about the need to improve performance management to help combat the tight labor market. The problem with the most common resources is that they rely almost solely on measuring, modeling and data collection. While some key performance indicators must be identified and tracked, it’s essential to remember that performance management is all about PEOPLE – not data! Because of this, it’s vital to start with the foundation of team development – who your leaders are, how they communicate and what methods are in place to help your workforce succeed. To help our construction clients, prospects and others, Barnes Dennig has offered some insights regarding performance management.
Performance Management 101
Performance management is the process of creating a work environment in which team members are empowered to perform to the best of their abilities. This often includes (or should include) outlining a job description and duties, training, setting expectations, monitoring performance, performance reviews to rate progress, correcting as needed and rewarding stellar performance. Consider the following methods to ensure your performance management strategies are on track:
- Who’s on First? – First thing’s first: who is responsible for performance management and development in your company? This question is often met with some finger pointing and shoulder shrugs. Assigning one manager or mentor to each employee and contractor is vital for effective performance management. This individual will be the go-to for day-to-day assistance, goal setting and issues as they arise and the one running review meetings. Finding people with the innate ability to lead and manage can be a challenge, but if no one is clearly responsible for an individual’s career development and performance, there is little accountability to long-term success.
- Set Expectations Upfront – Ambiguity is the enemy of accountability. When your team doesn’t know what is expected of them, they have no choice but to “make up” the rules. Communicate things like the employee’s work plan, schedule and budget clearly and precisely (not “soon” but “by Tuesday”). You can’t really expect someone to just “do a good job on X” if they haven’t properly been told what a “good job” looks like to you. If employees aren’t meeting your expectations in a certain area or areas, have a gut check first to discern whether or not you made your expectations clear to them. If so, and things still aren’t measuring up, have a straight performance conversation (see the “communicate” section below).
- Set Goals – Individual roles and responsibilities and both short- and long-term goals should be clearly documented to help you and your team understand what is expected and to hold employees accountable. Ask each staff member to set their own goals (perhaps by project or competency) and then discuss and refine them as needed to match the company’s overall goals. The manager or mentor should be available to help push through any roadblocks and, when goals are met, celebrate success. As more responsibilities are added, be sure to update position descriptions to match.
- Monitor Progress – Any commitments, goals and expectations won’t be very effective if no one ever refers back to them. Holding regular meetings to discuss progress and provide meaningful feedback will make it much more likely that the defined commitments will be met, especially for younger generations who tend to prefer more frequent feedback in general. Use meeting recaps for regular check-ins and refer back to them in the next meeting for another layer of accountability. Staying in touch also helps develop rapport and allows you to discuss how the various jobs are going so you can remove any roadblocks the individual is experiencing. In the same way, a semi-annual or annual review can be an effective motivator for those who know what is expected of them. When it is clear what must be done to, say, earn a raise or gain new responsibilities, the review process is simplified. The employee and manager can easily understand when goals have been met or even exceeded.
- Communicate – the Good, the Bad and the “Less Good” – Having straight (but empathetic) conversations about specific areas for improvement is a must for performance management. Good people managers must be neither conflict avoidant nor unnecessarily harsh. This fine balance is a tough one to navigate for many, so invest in training as needed. To get the most out of your team, it’s important to be honest and have those difficult conversations – beginning with an “I expected X but observed Y” statement. Then listen carefully to the response and see if some part of the job or expectation was not clearly defined. If it was and was simply missed, articulate the follow-up actions required (e.g. repairing the issue themselves, speaking directly to the customer about a solution, etc.). Then define what you expect moving forward and any related consequences for a repeat offense.
- Evolve – Be willing to make changes to how you handle performance management based on feedback from supervisors and employees, the results you are seeing and individual progress or personalities. You may need to adjust what you are measuring or adapt to the company’s changing priorities. Be flexible with yourself and your employees as you explore new ways of developing your team.
In very general terms, performance management is closely related to leadership and effective communication. If you have the right people, managers and a system in place to set and track goals and either reward or correct performance, you have the basic ingredients for effective performance management. If you have questions or need assistance with an audit, tax or compliance issue for your construction company, Barnes Dennig can help. For additional information, please call us at 513-241-8313 or click here to contact us. We look forward to speaking with you soon.