Good Employees are Premium Assets

Good Employees are Premium Assets

Good employees are the premium assets of every company and need to be managed and cared for as such. Everything else considered an asset is nothing more than plant, property and equipment. Developing and maintaining the employee asset base requires an effective performance management process.

As the economy teeters on improving for the medical device and equipment industry, companies will begin to add employees to meet the increased demand for products and services. If an effective performance management process isn’t in place, now would be a good time to begin the design and implementation of one. There is an abundance of employable talent on the market today at all skill levels. Having a rigorous recruiting and selection process—not just for the right employees for the company but for the best employees—provides a higher caliber of employee selected for employment, reduces the turnover rate and increases the selection for the right employee fit with the company. The recruiting and selection process is part of the performance management process. Having a robust performance management process is a requirement to maintain, develop and retain employee assets regardless if they’re from the baby boomer generation, generation X, generation Y or any other generation or culture of employable talent. When the economy is fully recovered and employee turnover begins to increase, having an effective performance management process is even more important for retaining employees.

The purpose of business is to serve customers, which cannot successfully be achieved without employees, and most businesses are not any better than the employees they develop. Regardless of their age, experience, education, intelligence, culture, heritage, motivation, leadership or compensation value they bring to the company when they are hired, how they use their skills and personally develop within the company is the defining factor of their work contribution and longer-term value to the company.

Therefore, employees should be managed as assets, from the recruiting and selection process through the development and performance management evaluation process, career development, promotion and advancement, long-term participation in the company, retainment and, if necessary, separation from the company. Not all employees are intent on building careers. Many employees see their employment as nothing more than a job they do for income to support themselves and their families. Other employees are building careers and see the company as a means to achieving career development. Most companies have a combination of employees that are building careers and those that have a job with the company.

The Performance Management Process

The development and implementation of a performance management process can be over-designed and made overly complex to execute and administer, causing it to be another ineffective, time-consuming, good-intentioned endeavor with no results. Designed and implemented properly, the performance management process is embedded in the everyday management practices of the company.
In its simplest design, the process has four components:

• Recruiting and Selection of Employees: Focuses on the recruiting process for talent, the interview process and setting the expectations of employment candidates before an offer of employment is made to the candidate;

• Performance Evaluation: Focuses on the employee’s performance by providing a fact-based evaluation of performance for the period, against defined evaluation criteria and comparison to actual performance;

• Personal Development: Focuses on defining the employee’s development needs in skills, capabilities, experience, education and training, and the determination of personal achievement goals for the employee to accomplish during the next performance management review cycle; and

• Management and Supervisory
Responsibility and Accountability: Focuses on management’s performance. Not to be left out, the performance management review includes a process for managers and supervisors to evaluate and improve their capabilities in the development of employees and to ensure employee assets are being developed.

Whether an employee is building a career or just holding a job with the company, five primary factors remain crucial for employees to provide their best work effort, and these factors have not changed from work generation to work generation. However, it is the obligation of the company to ensure the factors are embedded in the work environment.

These factors are:

• Providing meaningful and challenging work for the skill level, capability and education of the employee;

• Providing objective and fact-based performance feedback about their work and constructive recommendations about how to improve performance;

• Providing the opportunity to grow and expand skills, experience, knowledge and capabilities;

• Providing recognition and reward for good performance and achievements; and

• Establishing personal performance and development goals and proving guidance and assistance in achieving the goals.

Designing and Implementing the Process

The design and implementation of the performance management process doesn’t have to be complex but it does have to be executed consistently to be successful. As experience with the process increases, modifications and improvements can be added.

Starting with the candidate recruiting and selection process, the recruiting of employees should be defined and directed. They can be recruited from educational institutions, competitors, other industries, through search and employment firms or other areas, but where candidates can be recruited should be identified. The selection process should incorporate a series of in-depth interviews from various employees in the company to obtain different perspectives about the candidate’s experience, skills and fit with the company. A candidate evaluation and rating form document should be prepared and used by the interviewers to record their perceptions of the candidate’s skills. The evaluation criteria should assess technical skills needed for the position, interpersonal, communications and teamwork skills, initiative,leadership and ability to develop, to mention a few. References and education should be validated and candidates should be interviewed at the company’s location at least twice to validate consistency in interview ratings by various employees. The more effort expended up front in the recruiting and selection process, the higher the chances are the candidate will be successful in working for the company.

The performance evaluation process should occur at least annually and generally near the employment anniversary date. The evaluation process should be structured and documented. Evaluation criteria should be defined and performance rating definitions developed for the criteria. The performance evaluation should be a fact-based rating against the performance criteria. The evaluation should be summarized in a narrative form describing overall performance, accomplishments, areas for improvement and requirements to improve the rating performance.

Personal development should be conducted shortly after the performance evaluation process is completed. This activity focuses on the employee’s development needs to acquire new or expand skills, acquire training and education, increase responsibilities, move into leadership and supervisory positions or take new positions with the company. A development action plan should be created that documents the activities and responsibilities of the employee and the company to execute the plan.

To be effective, the performance management process must be applied consistently and executed without hesitation. Any delays and inconsistencies occurring in the process discredit the process and is a disservice to employees. To ensure the performance management process is executed, the evaluation criteria for management and supervisory employees should include evaluation and accountability of their performance management responsibilities, including their participation in recruiting and selection, conducting performance evaluations and assisting with development of employee personal development plans.

Employees are the premium assets of the company. Without them, customers cannot be served. The design and implementation of a formal performance management process is an investment in the employee asset base every company can afford to make because of the higher yield return it provides for the investment.

Bruce E. Jacobs is a Consulting Partner with BrokenGate Consulting and works with client executives to improve operating performance, design and implement improved business processes, value chain and supply chain performance improvement, performance measurements and optimize technology applications to enable improvements. Reach Bruce at (314) 704-0693 or ww.brokengateconsulting.com.