“Start the retention process when the person is still open to staying, not after they’ve already told you they’re leaving.” -Jeff Weiner, Executive Chairman, LinkedIn

Employee retention is increasingly becoming a top priority for growing organizations across the globe. With talent becoming the greatest asset and great resignation becoming a reality in the VUCA world, organizations can no longer afford employee attrition if they seek to scale and sustain business growth, making employee retention strategies a critical part of organizational goals.

In this article, we will discuss:

• Reasons why employees leave focusing on alarming data points
• What factors contribute to employee retention
• Top 20 strategies for employee retention

Why employee leave: Top 5 reasons

Before jumping on to the top employee retention strategies for growing organizations, let’s quickly understand why employees leave. These reasons will eventually become the basis for writing your employee retention plan:

1. Work relationships

Employees tend to leave when they don’t have healthy working relationships with their bosses and coworkers. We have often heard the employees don’t quit jobs, they quit managers. Thus, the lack of an empowering, feedback oriented relationship with clear communication with the manager as well as coworkers pushes employees looking for a way out.

2. Lack of appreciation

When employees don’t receive due credit and appreciation for their work and contribution, they crave validation. They are unable to see their value add for the organization, which impacts their engagement and commitment, leading to employees leaving.

3. Limited development opportunities

As a part of their job, employees expect opportunities for growth in their career with learning and development interventions in the form of training as well as greater responsibility. However, in the absence of growth opportunities, employees feel they are stagnant and leave an organization.

4. Lack of flexibility and autonomy

In the VUCA world, employees leave organizations that have a very rigid structure with little or no flexibility and autonomy. If your organization is unable to address flexible work expectations, including remote work and provide space and autonomy to employees to unleash the creativity in them, you are likely to see higher levels of turnover.

5. Low levels of engagement and management 

Finally, when employees are unhappy with the engagement and performance management efforts, they are likely to leave an organization. In the absence of a sense of belongingness, employees lose the motivation to work, which results in attrition. 

10 shocking statistics for employee retention

Here’s a quick snapshot of the current employee retention and attrition landscape across a diverse workforce. These statistics clearly indicate the need for carefully planned and diligently executed employee retention strategies. 

1. The average employee exit costs 16% to 213% of their annual salary depending on their pay (Source)
2. 1 in 3 professionals cite boredom as their main reason to leave their jobs (Source)
3. 3 in 4 current workers are actively thinking of leaving their jobs (Source)
4. 70% of staff members would leave their current organizations for a job with one known for investing in employee development and learning (Source)
5. 76% millennials would leave their jobs if they’re unappreciated (Source)
6. Companies that provide the option for remote work have 25% lower employee turnover (Source)
7. 54% of Gen Zs, respectively, are thinking about quitting their job (Source)
8. 70% of millennials have considered leaving a job, to one boasting flexible work options (Source)
9. 79% employees consider bad leadership as a factor in deciding to quit (Source)
10. 16% of Gen Z and Millennial employees have quit a job because they felt the technology provided by their employer was inadequate (Source)

5 reasons that make employees stay with an organization

Based on our experience of working with growing organizations as well as years of research expertise, we have been able to identify 5 factors or reasons which encourage employees to stay with an organization. In your attempt to reduce employee turnover, you can capitalize on these factors to build your employee retention strategies. 

1. Employee centric engagement and performance management

Employees tend to stay with an organization when they feel they belong there. Therefore, high levels of engagement and commitment to the organization is one major reason that employees stay. Furthermore, continuous performance management with an employee focus, addressing their development needs and ensuring their growth is what will encourage them to stay. 

2. Growth oriented culture with employee participation

Taking cue from growth above, employees stay with organizations which have a positive and growth oriented and empowering culture. Opportunities for mentorship, coaching, leadership development as well as high levels of employee participation are critical. This suggests a major reason for employees to stay is because they feel they are heard, valued and included in all or most organizational decisions. Be it setting of OKRs or creating a new business plan, employee participation, feedback and gauging their pulse is important. 

3. Focus on appreciation and recognition

Employees will be more sticky and loyal to an organization where their efforts are appreciated and recognized. As a part of human nature, they will stay longer with an organization that gives them credit along with appropriate rewards for their contribution. On one hand, employees feel valued. On the other hand, it brings a sense of credibility and pride for employees, both of which contribute to a longer tenure. 

Read: Best practices for employee recognition to learn how to create a culture of recognition

4. Alignment with purpose and values

Your workforce will stay longer if it aligns with your purpose and values. Since each person has a particular vision and goals for their professional and personal growth, unless they align with what your organization stands for, retention for a long period becomes difficult. Similarly, if your organizational values align with what your employees believe, they will stay with you for longer.

5. Meaningful work 

Finally, employees stay when they feel their work is meaningful, purpose driven and is able to create an impact. Here, getting the opportunity to work on challenging tasks as well as work that is satisfying makes a difference. When people see results because of what they are doing, they are bound to stay longer. 

20 top employee retention strategies you must know

Now that we have an understanding of why employees leave and some reasons of what can make them stay, let’s take a look at the top 20 employee retention strategies that you can implement to reduce turnover significantly. 

1. Make recruitment effective

Provide employees with a clear and realistic picture of what working at your organization will look like. Don’t paint unrealistic pictures as a tool to attract employees with stark different on-ground realities.

• Be clear on what you need
• Revisit your job descriptions
• Look at the right places
• Try to seek referrals

2. Focus on smooth onboarding

Provide adequate support to your employees during the onboarding process. Help them socialize with their team members, encourage them to reach out to you for anything without hesitance, and create a resource document for information they might need. Having a buddy program along with an engaging induction can be useful.

• Follow a structured process
• Be realistic with the new joinee and don’t promise the moon
• Explain any internal codes or acronyms that you use
• Make connections for initial days

3. Facilitate regular check-ins in the first few months

Connect with new employees every few days to understand how things are going for them and whether they need any additional support. Make it a practice with clear objectives and questions for each check-in.

Download our 1:1 meeting’s template for managers to run smooth check-ins with new joinees

4. Promote right training and development

Facilitate learning and development opportunities based on the specific requirements for each employee. Help them chart out a career growth plan and customize learning opportunities based on it. 

• Undertake surveys to identify training needs
• Use performance snapshots to understand performance trends over years
• Invest in both hard and soft skills development

5. Ensure manager development

Focus on developing the right leadership skills for your managers when it comes to engaging with their team members. Development on providing feedback, mentorship, conducting 1-o-1 conversations, leveraging employee insights should be undertaken. 

• Focus on coaching and leadership training
• Invest in tools that offer guided templates
• Promote skills of delegation, recognition and appreciation

6. Provide adequate feedback

Ensure a steady stream of constructive feedback goes to each employee. Use feedback as a tool to facilitate better performance and reduce feedback anxiety by using it appropriately. 

7. Get compensation and benefits right

Reassess your compensations and benefits strategy. Align it with market standards and offer the right benefits to your employees for the value they add to your organization. Consider market correction for specific roles, if needed. 

• Don’t focus only on year-on-year increments
• Provide rewards and incentives on the go
• Gauge the benefits your employees demand

8. Encourage high levels of engagement

Facilitate employee engagement by focusing on diverse initiatives including work management, appreciation, meaningful work, etc. Here’s a full list of employee engagement activities for you to try. 

9. Create a culture of acknowledgment

Celebrate all milestones for your employees, whether big or small. Ensure that even efforts are celebrated and acknowledged with public/private appreciation. 

• Create a monthly appreciation day
• Have social media shout outs for top performers
• Recognize in real time with small gestures or goodies

10. Focus on rewards and recognition

Relook at your rewards and recognition strategy. Create a compelling rewards program to facilitate new ideas and greater participation which will result in higher engagement and retention. 

11. Promote work-life balance

Give employees adequate time to focus on their personal and family life. Set clear boundaries and respect them. 

• Provide compulsory time off 
• Offer benefits like maternity and paternity leaves, etc. 
• Offer flexible and remote working

12. Prioritize employee health and wellbeing

Make health and wellbeing a priority. Offer both tangible and intangible support. On one hand, have proper insurance and professionals on board to provide immediate support. On the other hand, eliminate instances of burn out or being overworked by ensuring fair delegation of work and hiring according to need. 

• Facilitate wellness sessions
• Offer monetary support for any health and wellness requirement
• Boost physical wellbeing 

13. Provide a growth ecosystem

Offer the right ecosystem of mentors, coaches and leaders who not only help your employees perform well in their tasks and goals, but also enable them to grow professionally. Help them navigate the personal and professional challenges with adequate resources and formal programs.

14. Increase employee participation

Encourage employee participation across all avenues. Involve them in setting OKRs and goals as well as in other organizational initiatives. Make them a part of decision making wherever possible. 

• Engage employees in most discussions
• Involve them in goal setting as well as performance reviews
• Offer incentives for participation 

15. Gauge employee pulse

Ensure that employee sentiments and opinions are captured, analyzed and reflected upon on a regular basis. Send out pulse surveys frequently to gauge employee feedback on different aspects of their experience and preempt attrition risks to address them.

16. Reinvent performance management

Focus on knowing the strengths of all your team members and delegating work accordingly. Facilitate effective 1-o-1 conversations on different aspects of performance and track performance over time. (Get more insights on all things performance, here)

17. Promote collaboration and co-creation

Create opportunities for teamwork, collaboration and co-creation. Encourage employees to create a network with their colleagues to foster strong workplace relationships to promote greater belongingness and a positive culture. 

• Create cross-functional teams for certain projects
• Create a buddy program in the beginning
• Promote cross-team mentorship programs

18. Ensure clarity in communication

Make clear communication across all aspects a priority. Right from communicating values and vision to daily tasks and goals, ensure that there is no misunderstanding of expectation mismatch to prevent dissatisfaction in the end. 

19. Foster respect, fairness and transparency

Ensure that there is respect, fairness and transparency across all levels of the organization. Don’t let your employees feel that they are treated differently or are subjected to any form of bias. Practice fairness in rewards, recognition, appraisals and promotions and be transparent about all such processes. 

20. Leverage technology across all aspects

Focus on capitalizing tools like SuperBeings to get real time insights into key drivers that impact engagement and hence attrition. Leverage automation and the power of artificial intelligence to create heatmaps and identify areas for intervention to reduce attrition preemptively. 

To see how SuperBeings can help you solve your specific issue in just 15 minutes, book a quick call with one of our experts.

We have talked about OKRs and their importance for different teams as well as individuals. However, an equally important theme that needs due attention includes company OKRs. For a moment, you might think that different team OKRs together are what will form company OKRs. While this is true, however, you will not get a complete and impactful picture this way. Therefore, you need to specifically focus on company OKRs or high level OKRs which will be overarching for anyone who is a part of your organization.

Setting company OKRs: Why and how

Let’s start by answering one of the first questions you are likely to have, why should you be setting high level/ company OKRs. Well, have you ever felt that a lot was discussed during a business strategy or brainstorming session, but when the final tasks and outcomes came to you, it wasn’t even close to what you discussed? If the answer is yes, it’s mostly because the discussion got left on the whiteboard. Setting company OKRs wisely can help prevent exactly that. Here’s what company OKRs can help you achieve:

• Ensure that everyone is rowing in the same direction: Without company OKRs, different departments might push diverse agenda in different directions, leading to chaos in the organization
• Communicate the organizational priorities actively: Ensure that everyone understands what is of priority to the organization at that moment
• Prevent out of sight out of mind syndrome: Ensure that what is discussed is actioned, implemented and driven to results 

Once you and your team are aligned on the need for company OKRs, it is important to follow an effective process to set them. The following steps/ practices will guide your journey and answer the question of how to set company OKRs:

• Understand needs and priorities at the organization level, across diverse domains, including, business, finance, marketing, human resources, etc.
• Create a collaborative group with representation from all teams to ensure no voice gets left behind
• Develop a guide of sorts to help everyone understand the importance and purpose of company OKRs
• Substantiate each objective with 2-3 key results as well as initiatives or projects to achieve the same

How to turn business strategy into measurable metrics with company OKRs?

Your business strategy is generally an overarching statement or goal that you aspire to reach. However, by its nature, business strategy talks about the actions and steps you need to take to reach that goal, but seldom talks about associated metrics which will signify whether or not you have been able to achieve the goal. Company OKRs can help bridge this gap. This can be used as a tool to translate your business strategy into measurable metrics that can help create clarity for results. 

For instance, as a part of increasing customer lifetime value, your business strategy can be to improve customer experience by reducing complaint resolution time, better responses, etc. However, if you add a layer of OKRs to this business strategy, you will get measurable metrics to translate your strategy into results. Here, key results such as increasing customer NPS by 20% or recurring customers by 45% can be used as metrics as a part of company OKRs.

How to prioritize company OKRs?

With a wide array of goals to achieve, you are likely to come across conflicting OKRs when you try to set company OKRs. You will find yourself wondering which ones to choose over others. While each one of them has its merit, trying to boil the ocean by implementing all of them together will not yield any impact. It will only result in you being too stretched for resources with little or no progress. 

Hence, it is very important that you prioritize company OKRs based on the follow parameters, especially if you are setting company OKRs for the first time:

• Impact on the bottom line: If an OKR has a direct impact on the profit/revenue of your organization and that is a business need, you need to prioritize it up front
• Ease of implementation and achievement: Some company OKRs can be easier to implement than others, you can start with a couple of those to facilitate initial wins and promote team confidence and morale
• Degree of interdependencies: As company OKRs, they will likely require collaboration between different teams, starting with OKRs which do not require a very high degree of interdependency can help set the path for others
• Level of acceptance: Finally, some company OKRs will be accepted more easily by everyone in the team than others, it’s best to commence with them to secure organization-wide buy-in

Company OKR planning

Before you start putting down the OKRs on paper and implementing them, you need to have a series of company OKR planning and brainstorming sessions. Company OKR planning will help you in not only writing great and effective OKRs but also facilitate smooth implementation. Below are some questions you need to answer as you plan your company OKRs:

Question 1: Who will be a part of the OKR process?

Your company OKR planning should begin with deciding who will be a part of the entire process which starts from planning and ends with evaluation and realignment, thus, bringing the circle back to planning. Ideally, if you have several departments within the team, it is best to have at least one representative from the team to be a part of the OKR planning. Generally, senior leaders who have both functional understanding and institutional knowledge about the organization are ideal for being a part of the company OKR planning process. Once you have the initial planning committee in place, you can start by considering the following parameters for effective planning and implementation:

Question 2: Who will be the OKR champions or OKR masters?

During company OKR planning, you need to decide who will be the OKR masters or who will ensure that once put on paper, the OKRs don’t end up as a part of yet another folder that doesn’t see the light of day. OKR champions can be the same professionals who are a part of the planning committee or can be selected based on consensus. Ultimately, the OKR masters will be responsible to ensure progress for each key result. Adoption of tools, regular stand ups, etc. can help OKR champions track progress. 

Question 3: How will the OKRs be decided?

As they are expected to impact the entire organization, company OKRs are best set by the CEO. However, in most cases, the overarching objective will have key results that will be dependent on different departments. For instance, if the objective is to increase revenue, there will be a key result for the sales team, one will be there for marketing to help build a pipeline for sales and similarly, for product and design to innovate and create better products that either cost less or sell more. Thus, during the company OKR planning phase, it is best to get opinions from everyone to prevent a disconnect later and ensure ambitious but realistic key results. 

Question 4: How will the OKRs be cascaded across the organization?

The next important consideration for company OKRs is how they will be cascaded or trickled down across the organization. While the focus of cascading will be in a top-down manner, considering the company OKRs are set by the top leadership, it is important to ensure that they are not perceived as orders or performance review parameters for employees. Therefore, cascading of the OKRs should happen in a manner that while everyone in the organization is aware of what the company OKRs are, they are not burdened or limited by achieving only those as a part of their performance. 

Question 5: How will you ensure team alignment on the company OKRs?

Unless different teams are aligned on what the company OKRs advocate, it will be very difficult to ensure achievement of results. Again, the goal here is to not achieve alignment by means of force or order but to facilitate genuine acceptance and alignment with what has been set as company OKRs. Here, the OKR masters for each team will have a key role to play. We will discuss more about this in the following sections. You can also check our exclusive article on how to align teams using OKRs.

Question 6: How will you communicate OKRs to the teams?

A linked idea that arises from cascading of company OKRs as a part of OKR planning is communicating the same. Here, the idea is to ensure that everyone has the same idea of what the OKR seeks to achieve and don’t have differing views of what is expected. Therefore, the communication needs to be extremely clear. Thus, when you are in the OKR planning phase, you need to build a robust communication strategy to ensure everyone gets the same and right message about the company OKRs. You can follow some of the steps mentioned in the sections below to create an effective strategy. 

Question 7: What will be the cadence for company OKR review?

Finally, during OKR planning, you also need to set a cadence for subsequent meetings/ sessions that you will conduct to ensure the efficacy of the set company OKRs. One of the most important ones here is to set a cadence for OKR review and evaluation of progress. Here, you need to collaboratively decide on how often or frequently you would like to connect to gauge the level of progress for each OKR and discuss any challenges, opportunities, etc. that may have come to your notice. Furthermore, you will need to decide how often you want to create new OKRs and relook at the old ones. 

How to drive company OKR adoption within teams?

Picture yourself in a situation where you have set forward-looking and aspirational company OKRs which have the potential to take your organization to the next level of growth. However, your team members refuse to accept and adopt them. What do you do? 

To avoid landing yourself in such a situation, it is important to have an effective process in place that will help you drive company OKR adoption within team members. Here are a few ways you can achieve the same:

1. Ensure team representation

Make sure at least one member of each team is a part of company OKRs planning and writing. This will facilitate a feeling of engagement, belongingness and ownership, leading to greater acceptance and adoption. 

2. Have an OKR discussion with the team

Once you have set the company OKRs, as the CEO, have a discussion with each team not only to share what the OKRs are, but also the rationale behind each one and the potential impact on the organization as well as the individual. 

3. Give freedom and autonomy

At a strategic level, you may set broad company OKRs that involve every team. However, you should try to focus on just setting the objective/key result for the team and not how to achieve the same. Give team members the freedom to innovate ways in which they want to achieve it. It will lead to greater relatability with the OKR resulting in higher adoption.

4. Encourage them to set their own OKRs

Finally, while you set the company OKRs, encourage teams to set their own OKRs which align with the high level ones. Again, this freedom to set their own OKRs will encourage them to adopt the company OKRs even more deeply.  

OKR communication strategies

An important part of implementing company OKRs is to communicate them to everyone across the organization in the most effective manner. However, one time communication will not be enough. Ensure sufficient follow through. Here are a few tips to start your company OKR communication:

• Host an open house where you, as the CEO, will share the company OKRs
• Add the OKRs to spreadsheets or preferably an OKR tool that can help everyone see not only the OKRs, but also deadlines, progress tracking, etc.
• Make OKR communication a part of your onboarding process
• Conduct frequent meetings in smaller groups to share progress on company OKRs and reinforce them 
• Seek feedback on the OKRs in closed groups and pay heed to the same
• Encourage managers and team leads to communicate OKRs on a regular basis

Top 5 company OKR examples

Let’s quickly glance at some of the top examples of company OKRs that you can take reference from to set OKRs for your organization. 

Objective 1: Achieve high revenue 

• Key result 1: Increase overall sales by 25%
• Key result 2: Reduce production cost by 5%
• Key result 3: Expand presence by establishing operations in 2 global centers

Objective 2: Create an engaging work culture

• Key result 1: Reduce absenteeism by 20%
• Key result 2: Bring voluntary turnover rate to 5%
• Key result 3: Achieve e-NPS score of 9 or above

‍

Objective 3: Augment customer experience

• Key result 1: Increase customer stickiness by 25%
• Key result 2: Increase customer lifetime value by 30%
• Key result 3: Achieve NPS of 8 or higher

Objective 4: Raise funds for the next stage of growth

• Key result 1: Convert at least 35% first meetings with VCs to second meetings
• Key result 2: Secure a reinvestment of xx from old investors
• Key result 3: Secure yy from new investors in the next 6 months

Objective 5: Create a better company culture

• Key result 1: Increase employee satisfaction by 35%
• Key result 2: Acknowledge and appreciate work and effort at least once every month
• Key result 3: Conduct open houses with senior leadership once a quarter 

Final Thoughts

Are you looking to automate all the processes we mentioned above? An Excel sheet will only get you so far. Using an OKR software will not only help you set, cascade, and communicate your company OKRs, but will also help you keep track of day-to-day progress on each of them across the organization with just a few clicks. 

 If you have got 15 minutes, see all these in action on this quick call with one of our experts. It will be worth your time, we promise!

Suggested Readings

Learn from the CEO: How Chargebee built a $3 billion SaaS unicorn with their efficient PMS

Should your business invest in OKR software: Calculate the ROI

When it comes to performance review, there are several aspects you need to focus on, including when to conduct, how to conduct, etc. One important aspect that deserves due recognition is the use of performance rating scales. There are schools of thoughts on both sides of the discussion on using vs not using it. However, if used strategically, a performance rating scale can effectively make the employee performance review process smoother. Through this article we will cover:

• When to/ when not to use a performance rating scale
• How to select the right employee rating scale for your organization
• Common pitfalls of using a rating scale to be aware of
• Top performance rating scale questions you must use

Performance rating scale: Top use cases

While preparing your organization for a performance review, you might find yourself conflicted about whether or not you should use a rating scale. A performance rating scale is highly effective in gauging an employee’s performance from a quantitative perspective, but has limited scope when it comes to evaluating performance qualitatively. 

Therefore, we have identified the top situations and advantages of using a performance rating scale as well as when you should not be using them.

When to use a performance rating scale

You should use a performance rating scale when you need to:

• Capture quantitative evaluation of the performance to study trends over time
• Compare performance of two or more employee on similar parameters
• Focus on a particular behavior or attribute of performance and don’t want the respondents to digress
• Gauge concrete data points on performance to decide on appraisals and increments
• Eliminate the ambiguity from interpretation of subjective responses
• Get quick responses to your performance feedback

Advantages of a performance rating scale

Based on the use case above, here are a few advantages of using a performance rating scale:

• Quantitative performance analysis which is easy to comprehend
• Clear alignment of performance and compensation, leading to reinforcement of high performance
• Ability to gauge a shared understanding of performance expectations and achievements
• Ability to clearly identify areas of improvement and strengths

When not to use a performance rating scale

Despite the diverse use cases above, a performance rating scale doesn’t have universal applicability. In fact, using a rating scale in situations it doesn’t fit may lead to a poor performance review for employees. Therefore, you should refrain from using a performance rating scale when:

• The job roles and responsibilities between employees are not consistent and cannot be compared
• The role is relatively new and the expectations from performance are ambiguous
• You want to personally evaluate the performance of each employee
• You need a detailed report on the developmental areas and remedial actions for an employee
• You want to offer constructive feedback on the way forward for performance improvement

Disadvantages of a performance rating scale

Here are a few disadvantages of using a performance rating scale:

• The objective responses might be interpreted differently by different raters based on inherent biases (keep reading to learn more about these biases and how to avoid them)
• Managers may over/under rate an employee based on few perceptions
• Performance ratings might label a person without enough context, leading to low motivation and other challenges
• Focus shifts from development in performance to rationale behind the rating
• Getting a good rating becomes important over performing well

Types of performance rating scales

‍Depending on the nature of responses to the scope and intent, there are several types of performance rating scales that you can choose from. Focusing solely on performance, in this section,  we will discuss the top 4 types for rating scales that you can use for different situations. 

1. The Point Scale

The point scale is one of the most commonly used employee rating scales used by organizations. It involves rating employee performance on a pre-decided scale across a spectrum of responses. It can range from a 3-point scale to a 10-point scale depending on the scope and the need. 

For a long time, the 5-point scale was the one that most organizations relied upon. While the 3-point scale gave only a macro level view, the 10-point performance rating scale became too comprehensive. Thus, the 5-point scale maintained a balance of being detailed but not overwhelming, where identifying differences between the points was difficult. 

The points on your point scale can be numbers or numerals with each number having a corresponding meaning. Alternatively, it could be words like Average, Above Average, Exceptional, etc. to indicate performance levels. 

In the most recent times, there has been a rise of the 4-point scale which focuses on eliminating the neutral or the middle option which is often seen as an easy way out that requires no further explanation. 

4-point scale example

2. The Likert Scale

Another common performance rating scale that many organizations use is the Likert scale. Like the point scale, it generally has 5 parameters on the scale. However, the difference lies in the value of the parameters. They are always written and the same for all questions. 

The five options on the Likert scale include

Strongly Disagree-Disagree-Neither Agree Nor Disagree-Agree-Strongly Agree

While the normal range is five options, it can range from 3 to 7 depending on the context and performance parameters. 

The Likert scale can be used as a matrix with statements on one side and the scale options on the other and can run like a list for performance review. An effective Likert rating scale generally has an equal number of positive and negative outcomes with a neutral option in between. 

Likert scale example

3. A scale to improve above average spread

This is a reinvention of the point scale which changes the balance of the positive versus the negative options. Generally, a point scale has an equal number of options that indicate that performance needs improvement and for a job well done. However, many organizations claim that a limited number of options on the positive side make it difficult for them to distinguish between good performers and top performers. 

In most cases, if there are 5 options, with one neutral in the center, there are only two options indicating good performance. Generally, these two options are unable to capture the performance rating for those 1-2% employees who set new expectations and a bar for performance. Invariably, their exceptional performance fails to get noticed and rewarded and is equated with the good performance of other employees.

To bridge this gap, many organizations are using a performance rating scale which increases the above average performance spread. The scale for below average performance is limited to one, which can be substantiated with qualitative feedback. On the other hand, the scale focuses on more above average performance options.

Example

4. The Frequency Scale for interpersonal skills

Finally, when it comes to a performance rating scale for interpersonal skills, the frequency scale is most sought after. Like most scales, it consists of a statement, followed by a few options. However, the nature and scope of the statement and options is what makes a difference. 

On the statement front, instead of directly asking whether an employee manifests a particular skill or quality, it focuses on a behavior that comes as a result of personalizing that skill. For instance, instead of inquiring if the person has good communication skills, the focus should be on behavioral aspects like display of active listening, ability to articulate thoughts, confidence of presenting in front of a group, etc. 

The options, on the other hand, seek to understand how frequently that behavior has been observed.

The idea is to gauge whether the employee has been consistently displaying the desired behaviors or is there a particular pattern to it or if it has just been observed as an off chance. 

Frequency scale example

The employee starts and ends meetings on time and runs them with a concrete agenda

• Not at all
• Seldom (20% of the times)
• Sometimes (40% of the times)
• Most of the times (70% of the times)
• Always (90-100% of the times)

This question can help gauge the time management, organization and planning skills for an employee, without directly asking the question. 

When to use numbers vs words performance rating scale?

As you have seen above, your performance rating scale can have options in the form of words or numbers. However, choosing which way to go can have an impact on the overall efficacy of the performance review process. It is best to use a rating scale with words over numbers because it is:

• More explanatory as numbers can have different meanings for different raters
• More personal as being associated with a number label can be a little dehumanizing
• Better accepted as numbers are generally absolute and can sound harsh

However, you can still use the number rating scales to review performance in situations where you need an absolute rating or when there is a clear and uniform understanding of what each number represents.  

How to choose the best performance rating scale? 

Working with multiple growing organizations over the years, we have been able to identify a few tips and tricks that can help you select the right employee rating scale for your next performance review. 

1. Go for a 4 or a 5-point scale

As a growing organization, choosing a 4 or 5-point performance rating scale makes sense because, it: 

• Is neither too abstract nor too cumbersome and detail oriented
• Will ensure that while your managers have enough options to choose from to rate employee performance, they don’t get lost in the sea of options 
• Can help eliminate the risk of managers going safe with the neutral middle option, by removing the same and going for a 4-point scale with only positive and negative options

2. Choose description over number

To augment the efficacy of your performance review rating scale, choose one which provides options in words or a description over numbers to:

• Ensure that your managers are able to give constructive feedback without an absolute label
• Prevent employees from being demotivated or left with a feeling of condemnation in case they receive rating in the low half of the spectrum
• Prevent any confusion of what the numbers means, which may lead to a skewed analysis

3. Be aware of the biases

Almost all performance rating scales are vulnerable to biases both in their scope and nature as well as for the rater themselves. Thus, when you pick a rating scale, you need to be aware about the potential biases and have remedial actions in place to ensure that they don’t give you an unauthentic picture of the overall performance. We will talk about some of the common pitfalls and biases in the next section for greater clarity. 

4. Create clear differences

When you choose a performance rating scale, you need to ensure that the difference in options is very clear and not ambiguous for the raters to figure out on their own. There are several aspects to it:

• First, having one option as sometimes and the other as seldom can be difficult to differentiate between
• Second, ensure that two options are not poles apart, leaving room for several performance categories in between. For instance, you can’t have one option that never meets expectations and the other as often meets expectations. There needs to be a balanced spectrum

5. Use the right words

Next, it is very important to use the right words in the statements and options that you choose. When it comes to the options, make sure there is a clear index of what each option means, especially if it is numeric. This index must be shared with all the stakeholder, the raters, those analyzing the results as well as the employees. 

Similarly, the questions should be very specific on one performance aspect. For instance, if you combine performance on communication and punctuality, it might lead to a lot of confusion. An employee might have great communication skills, but may not be punctual and thus, addressing them in the same question will be difficult. Furthermore, even aspects within the same performance parameter like active listening and ability to present in a large group can be separate.  

Common biases in a performance rating scale

Now, let’s look at some of the common biases a performance rating scale might be vulnerable to that you need to be aware of and try to avoid to the maximum extent possible:

1. Definition bias

As discussed above as well, the definition for options can be significantly different even when they are descriptive. This is so because all of us have different notions for each term. For instance, a manager might award an exceptional rating to some of his/her employees because they have been performing consistently well and that’s how they define exceptional. On the other hand, the bar for perfectionism might be too high for another, leading to a lower incidence of being awarded exceptional. Similarly, in instances where the options talk about meets or exceeds expectations, bias on what the expectations are can set in.

How to prevent this: The easiest way to prevent the definition bias is to have very clear definitions for all options which are communicated time and again to all. 

2. Leniency bias

The leniency bias occurs when the rater tends to give a more lenient or positive rating to an employee than what the performance actually begets. This can be seen when the rating is more on the positive side. Mostly the reason is that managers don’t want to demotivate their employees with a lower rating and, thus, end up giving a higher rating, which may not be a true reflection of the performance.

How to prevent this: Leverage a performance rating scale which increases the above average spread and talks about different aspects like top performers, outstanding, etc. This will ensure that decent performance is ranged at above average while exceptional ones have a separate rating. 

3. Numeric bias

Numbers can have different meanings for different raters in a rating scale. While each number can have a different meaning, the entire spectrum can be also looked at from two lenses. For instance, on a scale of 1-10, both 1 and 10 can be perceived as the top or the bottom. 

How to prevent this: Similar to the definition bias, the numeric bias for a performance rating scale can be prevented by using a clear index which clearly illustrates how the spectrum works and a definition against each number. 

4. Centrality bias

This is a very common bias when it comes to using a performance rating scale. Here, the rater tends to select the neutral or the central option to avoid any conflict or external explanation. More often than not, poor performance needs to be substantiated with improvement actions while high performance needs to be supplemented with evidence and rewards. To avoid any such actions, some raters take the easy way out, which doesn’t help differentiating between high and low performers.

How to prevent this: The easiest way to prevent the centrality bias is to remove the center or the neutral option. As shared above, you can simply go for a 4-point scale which doesn’t have a neutral option and thus, the rater has to distinguish between high and low performers. 

If you are dealing with consistent poor performance issues within your team, this article on Performance Improvement Plan might help.

Performance rating scale questions 

Invariably, you will have a statement or a question which will become the basis of the ratings for your managers. This final section will focus on the different nuances around performance rating scale questions that you must be aware of. 

How to choose right rating scale questions

Let’s start with a basic understanding of how to choose the questions for your performance review rating scale which can help you yield the best responses. To make the right choice, you must ensure that your questions are:

• Relevant for a group of employees. This suggests that your questions should have a meaningful spread and should be able to capture diverse performance levels
• Valid for the critical parameters for your organization. Put simply, your questions should seek answers for factors that define success for your organization. Simply getting ratings on any parameters will yield no impact
• Crisp and to the point. Don’t use jargon or very fancy language. Keep the questions simple and easy to understand
• Concrete and not ambiguous. The meaning of your questions should not be left for interpretation by the rater, they should be very specific
• Supported by the right kind of options or responses. For instance, if your question/ statement is The employee takes interest in team building exercises and your options are likely, not likely, etc. it may not make a lot of sense. However, options like never, sometimes, often, always, etc. make sense 

Read: 150+ performance review phrases to find a diverse set of questions and statements for your rating scale across 17 employee qualities

Common questions for different types of performance rating scales

Before we conclude, here are some examples of common questions you can use for different types of performance rating scales. These questions can help you understand which scale is most appropriate for you depending on the situation. 

Point scale

1. How well is the employee able to communicate his ideas?
2. How often does the employee own up to her mistakes?
3. How well does the employee make an effort to go out of his way to help others?

Likert scale

4. The employee takes initiative without being asked to
5. The employee pays attention to detail
6. The employee delivers all the work before deadlines

Frequency scale

7. The employee respects the opinion of others
8. The employee is able to communicate his ideas clearly in front of others
9. The employee understands the project needs effectively

Wrapping Up

While there are different views on whether or not a performance rating scale is the best tool to measure employee performance, there is no doubt about the merits it brings along. Therefore, it is critical for organizations to leverage this potential. Here’s a quick revision of everything you need to know about performance rating scales:

• You should use rating scales to get concrete data points for quantitatively driven performances or when you wish to compare performance levels
• Rating scales are easy to administer and quick to get results for
• You may want to stay away from rating scales when you want to measure progress for roles which are different or are relatively new, with no benchmarks
• You must be cognizant of the rater biases and contexts while interpreting rating scales
• You must understand the different rating scales before choosing the right one based on the number and nature of responses for your needs
• When choosing a scale, aim for 4-5 point scale, which focuses more on numbers than description, be cautious about the words you use and have clear differences between different options
• Finally, make sure all your questions are relevant, valid, crisp, clear and supported by the right options

Now that you have a comprehensive understanding about performance rating scales, you should get started with applying the same to gauge performance levels in your organization. Follow the best practices and be aware of the pitfalls to make a dent in organizational success.

Suggested Reading

150+ performance review phrases to use in your next employee review

100+ most useful self appraisal comments 

How to address poor employee performance at work

“Coaching is unlocking a person's potential to maximize their own performance. It is helping them to learn, rather than teaching them.” - John Whitmore 

Employee coaching is the secret tool that high performing organizations use to develop and nurture talent they already have. It supports continuous  performance management by not only addressing challenges of today, but also preparing the employees to tackle what comes their way in the future. 

In this article we will discuss:

• How to provide coaching to employees at different levels of performance
• 16 tips for managers to use coaching to improve performance
• Top skills for managers to become better coaches

Importance of employee coaching

Before we discuss further about how coaching can be implemented to achieve performance improvement and how managers can support the same, let’s quickly look at a few reasons that illustrate the importance of employee coaching:

On a closer look, you will see that employee coaching not only enhances employee experience leading to greater engagement and retention, but also has direct business impact with better performance, productivity and revenue. 

Identify coaching needs for different levels of employee performance

Before we start with specific employee coaching tips, you need to understand that the same coaching approach may not work for performers across different levels in the organization. There are two sides to this understanding:

• First, coaching will be different for different vertical levels based on tenure and experience within an organization. The same employee coaching framework will not work for a fresher and for someone with 30+ years of work experience. 
• Second, coaching for high performers will be different from that for a sub-optimal performer. You can either get this understanding by looking for performance trends manually or use a tool. For example, the Performance Snapshot feature of SuperBeings helps managers with a 9 grid matrix to identify employees at different performance levels based on their performance history over time and their future potential. 

Once you have figured out different groups of performers, use this list of tips to support employee coaching at different performance levels:

1. The newbie

• Avoid micromanaging
• Give direction to ensure a culture fit
• Offer constructive feedback

2. The ones who have just started performing 

• Encourage desired behavior
• Appreciate a job well done
• Help understand the next level of responsibility

3. The ones performing well

• Help create a career trajectory
• Encourage greater responsibility
• Appreciate efforts and recognize initiative

4. The masters

• Focus on niche coaching
• Help navigate leadership journey
• Create a ripple effect by encouraging second generation coaching

5. The high performers

• Help chart out their high potential professional journey
• Encourage them to anticipate potential challenges and prepare them to deal with them
• Focus on building their leadership skills
• Present them with new challenges to innovate and use creativity
• Don’t let them off the hook because of halo effect
• Understand and expand their core motivation

5. The low performers

• Understand key challenges
• Promote avenues for continuous learning
• Involve them in creating a performance improvement plan
• Encourage them to identify right opportunities for growth
• Provide constructive feedback
• Reward incremental performance improvement 
• Read how to deal with poor performers to learn more specific tips for coaching the low performers

16 tips for managers to use employee coaching for performance improvement

When it comes to improving performance, employee coaching can help in many ways. Here are some actionable tips for you to implement easily.

1. Ask questions to enable employees to come to solutions on their own, guide the way instead of driving them to the finish line.
2. Have some questions ready in advance as an ice breaker to avoid any awkward silence
3. Refrain from jumping to solutions if the employee is taking a little time to think, offer a safe space for brainstorming
4. Promote open ended questions versus those with binary responses to encourage conversation
5. Make your phrasing empowering, instead of using terms like “you should”, say “how would you”
6. Try to make each conversation growth focused, instead of spending too much time on reflecting what has happened. Focus on the future
7. Focus on professional development, even beyond organizational goals
8. Show faith in the employee you are coaching and encourage them to believe in themselves
9. Focus on identifying performance problems for the employee and ensure they understand the same
10. Collectively with the employee, try to understand the underlying factors that can promote better performance outcomes
11. Understand common barriers to performance and categorize them as internal (specific to the employee) or external (like organizational support)
12. Reflect on your conversations to analyze when you are asking questions and when providing solutions
13. Create an action plan for long term performance goals and areas of improvement
14. Be consistent in following up the progress and address challenges that might come along the way
15. Offer constructive feedback at every step
16. Be open to feedback from the employees on what can be better

5 Must Have Coaching Skills for Managers

To undertake the practices mentioned above, managers need to have a certain set of skills that can enable them to unlock performance for their employees. Following is a list of top skills to hone and some best practices to master the same.

Skill #1: Inquisitiveness

For employee coaching, managers need to move away from providing solutions and towards asking the right questions. The questions should be powerful enough to help the employees think in a growth oriented direction.

How to become inquisitive?

• Ask meaningful questions
• Focus on open ended questions 
• Keep your questions with a positive tone — don’t start a question with “don’t you think” or the like phrases
• Have follow up questions from within the conversation

Skill #2: Active listening

While coaching is about providing guidance, it seeks to ensure that guidance and support is offered to the situation of the employee. Hence, active listening is an important skill for managers if they want to become better coaches.

‍Active listening involves hearing, understanding, reflecting on and responding to what the employee has to say. 

How to become an active listener?

• Provide your undivided attention
• Use your facial gestures and body language to indicate you are listening
• Paraphrase and summarize to ensure your listening and understanding was accurate
• Don’t interrupt to force your point of view
• Don’t jump to conclusions

Skill #3: Growth mindset

Managers who seek to excel in employee coaching need to have a growth mindset with a commitment and belief for the development and success of their employees. 

How to adopt a growth mindset?

• Align organizational priorities with growth opportunities for the employees
• Encourage employees to see challenges as opportunities
• Help them in mastering the art of reflection and learning 
• Empower team members to come up with alternative solutions to the same problems
• Facilitate autonomy and flexibility to innovate and experiment

Skill $4: Empathy

As a coach, managers will be exposed to many sensitivities of an employee that might be holding them back. In such a situation, empathy as a skill is extremely important to create a high level of comfort and confidence.

How to become empathetic?

• Check your unconscious biases
• Be open to new perspectives and experiences
• Connect with your employees on a human and emotional level instead of just transactional
• Be genuinely interested in the employee’s growth

Skill #5: Consistency 

Finally, for managers to become a highly effective coach, the skill of consistency needs to be imbibed. The intent is to ensure that your efforts are not limited to a one off instance, rather are sustainable and scalable over time. 

How to become consistent?

• Create an action plan with a follow up schedule
• Calendarize your 1:1 meetings with employees you are coaching
• Constantly motivate the employees on their performance
• Don’t be too pushy or over burdening

Wrapping Up

Drawing this article to a close, it is quite clear that employee coaching has incredible potential to skyrocket performance for any organization. However, a few things need to be kept in mind.

• Clearly distinguish between coaching and other activities like managing and feedback
• Have different coaching frameworks and approaches for different levels of performance
• Coaching works in different ways for high and low performing employees
• Managers need to hone specific skills to facilitate effective employee coaching
• Focus on the above mentioned best practices is important to leverage coaching for improving performance

If you are interested in checking out more useful resources on managing employee performance, do check this out

Feedback is an integral part of creating a high performance culture. Research shows that 60% of employees reported wanting feedback on a daily or weekly basis. However, in addition to the frequency of the feedback, the content of the same is also very important. 

That’s where a Start Stop Continue feedback becomes important. Instead of simply stating how the performance has been, start stop continue feedback enables managers to highlight the desirable actions and behaviors for employees and simultaneously shed light on what needs to be changed. In this article, we will discuss:

• The meaning and importance of start stop and continue feedback 
• When to use this form of feedback 
• Start stop continue feedback best practices
• 15 examples of start stop and continue feedback 

What is start stop continue feedback?

Start stop continue feedback is a highly intuitive and easy to implement feedback framework for growing organizations. It can be used for and by anyone including teams and individuals for feedback by managers and peers as well as for self reflection. Essentially, the start stop and continue feedback has three aspects or components, including:

• Start: Focuses on actions or behaviors that an employee should commence for high levels of performance, generally around the areas of improvement
• Stop: Focuses on actions or behaviors that should be eliminated or significantly reduced because of their negative impact on the performance, mostly the weaknesses
• Continue: Focuses on actions or behaviors that must keep going based on their positive impact on the performance, often referring to the strengths

Thus, the start stop continue feedback enables employees to receive feedback on all aspects which is constructive, appreciative and sets a ground for improvement. 

Importance of start stop continue feedback

Now that you understand what this framework means, let’s quickly look at why you should use it for your organization:

1. Easy to implement

The start stop continue feedback is very easy to implement and does not require any specific training or upskilling. You can get started with a simple session introducing the framework. Furthermore, it can be implemented across the organization irrespective of the functional diversity, making it an all encompassing framework.

2. Easy to interpret

When you receive the start stop and continue feedback results, they are quite easy to interpret and put to action. Chances are seldom that you will have to read between the lines or require high level analysis, making it ideal for growing organizations with limited resources to easily improve employee performance.

3. Action focused

The start stop continue feedback delivers clear actions that an employee needs to take to facilitate high levels of performance, preventing it from being yet another form of feedback which is generic.

4. Encourages improvement and new ideas

Finally, the framework enables everyone to put on an analytical hat while providing feedback and come up with new and fresh ideas for better performance. 

When to use start stop continue feedback?

While the start stop and continue feedback framework has widespread relevance and adaptability, its impact increases in some specific situations, including:

• When you have a clear understanding of the opportunities and challenges
• When you want to cover all aspects of feedback (appreciation, areas of improvement and constructive criticism) together 
• When you want to deliver action oriented feedback, especially during OKR or goal progress review or while writing a performance improvement plan
• When you want to build a personal development plan

How to ask for start stop continue feedback from your manager?

As opposed to many other feedback frameworks, the start stop continue feedback can be sought by employees from managers and others to reach their goals in an effective manner. Here are a tips questions you can leverage while asking for start stop and continue feedback:

• Ask specific questions in areas which you consider integral for your growth
• Ensure that there are questions for all the three components to get a holistic picture
• Try to gauge different aspects in terms of actions, behaviors and support for each component
• Ascertain that answers to the questions are able to help you create a development plan with clear next steps
• Try to get answers from 2-3 managers/leaders/peers for a diverse understanding
• Focus on self reflection for the questions as well (Identify specific areas of improvements with the self assessment prompts)

How to give start stop continue feedback as a manager?

When it comes to giving start stop continue feedback, it is important to follow some best practices to maximize its effectiveness. At times, even when the intention is correct, managers might deliver the start stop and continue feedback in a manner that does not yield the intended impact. Use the following tips to bridge the gap from intention to impact.

1. Recommend specific actions 

As a practice, start stop continue feedback seeks to be action oriented. However, you have to make sure that the actions are specific and backed with supporting resources/ guidance on how to achieve them. 

For instance, if an employee doesn’t collaborate effectively, instead of using ‘Be more collaborative or be a better team player’ as a start action, you can use:

‘You should listen to what your team members have to say more often and build a relationship with them to facilitate meaningful synergies. I would recommend connecting with them over tea/coffee breaks, start asking for help instead of doing everything on your own and even lend a helping hand once in a while.’

2. Provide context and reasoning

If you simply mention an action that an employee should start, stop or continue doing, it might not have a large scale impact. However, if you back it up with examples and evidence, you are more likely to influence their behavior. 

For instance, if you tell an employee to continue upskilling himself/herself in digital marketing, it might be a good idea to illustrate why you are saying so with an example of how his/her skills have improved and the impact it has created for the organization as well as for the employee professionally. 

3. Maintain a balance

The start stop continue feedback framework seeks to motivate employees to take necessary action and improve their performance. However, if your feedback is skewed more towards start and stop actions, the employee is likely to get demotivated, considering himself/herself as a low performer. On the flip side, if your list of continue doing far exceeds the other two, it might set unrealistic expectations in the employee about his/her level of performance, potential appraisals and might lead to overconfidence. 

4. Be objective

Finally, when you give start stop continue feedback, you need to make sure you are objectively focused on the performance around a particular goal/ area in mind. If you are talking about the interpersonal skills of an individual and you mention continuing high levels of technical efficiency, it will dilute the whole purpose. Stick to the main theme and provide feedback for the same, without being deflected around other aspects of the employee. 

Top start stop continue feedback examples

As mentioned above, the start stop and continue feedback can be used for teams as well as individuals. Here are a few examples for each of the two segment groups that you can consider as a starting point. 

Pro tip: Start with a specific goal in mind for which you want to create the start stop continue feedback strategy

I) Start stop and continue feedback examples for teams

From a team perspective, here are the top 5 examples:

Example 1: Facilitate better team understanding

• What to start: Regular team meetings with high levels of attendance
• What to stop: Working in silos without informing the other person what’s going on
• What to continue: Team activities, lunches and get togethers

Example 2: Ensure better customer service

• What to start: Clear division of client responsibility and Robust customer service process with specific milestones
• What to stop: Delay in complaint resolution
• What to continue: Proactive customer service with regular check-ins

Example 3: Build an empathetic culture

• What to start: Regular sensitization activities on inclusion, empathy, compassion
• What to stop: Acceptance of casual offensive comments
• What to continue: Regular communication of empathy as a core company value

Example 4: Meet monthly targets

• What to start: Setting clear OKRs with distribution of responsibility
• What to stop: Putting accountability on only one person
• What to continue: Effective sales meetings leading to high levels of conversions and Marketing efforts resulting in brand recall

Example 5: Create an attractive place to work

• What to start: Focus on health and wellness by offering resources, support, insurances, time off
• What to stop: Unnecessary overtime and Skewed work-life balance
• What to continue: Regular team outings and Benefits and perks

II)Start stop and continue feedback examples for individuals

Here are the top examples you can use to set start stop and continue feedback specifically for individual employees based on their career trajectory and goals:

Example 1: Improve communication skills

• What to start: Take up a course on storytelling to improve the way you pitch and Prepare a script and practice it well before presenting
• What to stop: Using colloquial terms and slangs
• What to continue: Use body language and gestures to communicate

Example 2: Build technical knowledge

• What to start: Pick up courses on AI/ML and data science
• What to stop: Focus only on tech stack you are working in
• What to continue: Participation in hackathons and programming workshops

Example 3: Hone leadership qualities

• What to start: Delegating work to others based on their strengths and interests
• What to stop: Blaming everyone else for poor performance
• What to continue: High levels of clear communication and team understanding

Example 4: Focus on health and wellness

• What to start: 30 minutes of walk every day 
• What to stop: Ordering food in every day
• What to continue: 30 minutes of meditation and yoga

Example 5: Improve quality of work

• What to start: Proof reading of work at least 3 times before delivery
• What to stop: Multitasking between several projects at once rather than prioritizing
• What to continue: Maintenance of a checklist with all timelines

Example 6: Take more initiative

• What to start: Identify new areas where you can add value 
• What to stop: Staying away from new projects and responsibilities
• What to continue: Focus on picking up new skills and competencies

Example 7: Focus on interpersonal skills

• What to start: Practice empathy by listening to others 
• What to stop: Being disrespectful, even if unconsciously
• What to continue: Clear communication

Example 8: Improve attendance record

• What to start: Show up for meetings on time
• What to stop: Taking time off without prior notice
• What to continue: Adhering to timelines and being present at key discussions

Example 9: Facilitate better problem solving

• What to start: Come up with solutions for problems and not just take problems to the leadership
• What to stop: Hesitance to think outside the box
• What to continue: Comprehensive understanding of the problem

Example 10: Be agile and adaptable

• What to start: New courses and skills relevant for your functional domain
• What to stop: Focus on long processes and cycles‍
• What to continue: Willingness to change deadlines to adapt to changing priorities

Start stop continue feedback template

As we come to the end of our article, here is a quick template for you to help you get started with the right questions that you can add to your start stop and continue feedback strategy to ensure that all stakeholders get a fair understanding of what is expected of them.

Questions for start feedback

• What are a few new skills that Mr.A can pick up?
• As a part of Mr.B’s goal X, what additional responsibilities do you think he should take?
• What are some competencies that will help Ms.P take the next career leap?
• Ms.R sees herself as a Y in the next six months, how do you think she can reach there?

Questions for stop feedback

• What do you think are some factors limiting Mr.L’s growth?
• Ms.W is planning to take on these additional responsibilities, do you think she should refrain from any?
• What is the one thing that if Mr.I stopped doing will help the team perform better?
• Ms.O sees herself as a Y in the next six months, what do you think she should stop doing to reach there?

Questions for continue feedback

• What do you think are Mr.T’s key strengths?
• What do you think are some qualities and skills others can learn from Mr.K?
• What are some responsibilities Ms.U shouldn’t leave for picking up others?
• What do you think is Ms.D’s biggest contribution to the team?

While start stop continue feedback is the simplest way to provide actionable feedback, you need to make sure that the feedback you are giving is based on facts and not just mere opinions. Before you start your feedback session, analyze performance trends of the employee (it is even better to have it supplemented with behavioral data) as well as gather 360 degree feedback on the employee to have a qualitative understanding of the overall employee performance.

Wrapping Up (TL:DR)

In conclusion, it is quite evident that the Start Stop Continue framework is something any organization can implement to facilitate employee development and performance management in a structured manner. Here’s what you need to keep in mind:

• Use the framework to help your employees identify behaviors and actions that they should start based on their areas of improvement, stop which are hampering their performance and continue which are going well for them
• The greatest merit of this framework lies in the ease of implementation and interpretation as well as on being focused on action and helping employees understand what to do
• It is integral for managers who want to deliver a comprehensive feedback on strengths, weaknesses and areas of improvement all at once
• As a manager, when delivering this feedback, one needs to be objective and context driving, while providing action oriented suggestions
• Use the examples and use cases above to understand when and how to leverage this framework for maximum effectiveness

Once you implement the Start Stop Continue framework, you will realize that your employee development efforts have become more structured and are delivering results with performance improvement. The action bias of this framework is what makes it most effective and something that should be sacrosanct when you are implementing it.

When you analyze or study your employee performance review results, you will realize that not all employees fall in the top quadrant of performance. Many of them need guidance to bridge the gaps in their performance and improve the same. However, ad hoc or simple verbal suggestions may not always yield sustainable change. There comes the need to write and implement a Performance Improvement Plan or PIP to make a real impact. Through the course of this article, we will cover:

• What is a performance improvement plan and when should you use it
• The structure of an effective PIP and steps to write one
• Best practices to implement PIP and evaluate its impact
• Performance improvement plan examples
• Top questions on PIP that you have (general FAQs)

What is a Performance Improvement Plan (PIP)?

As the name suggests, a performance improvement plan is a plan or a document which enables an employee to identify and understand challenges in his/her performance and take steps and address them. 

PIP is an effective tool which you can use to encourage your employees to work on improving their performance from a skills training, behavior/ attitude or even goals/performance mismatch perspective 

Put simply, it contains the areas of improvement, actions/ solutions to address them and resources/ support to accelerate this journey.

When should you use a PIP?

Many growing organizations that are implementing PIP for the first time are confused about when it should be implemented and for how long. Significantly different from normal performance feedback, a performance improvement plan cannot be implemented for all employees. It is specifically meant for those who have been underperforming for a while and other practices have already been tried. You can use a performance improvement plan when:

1. The employee is not productive

You need to have a PIP if the employee is underperforming due to a decrease in productivity as opposed to what is expected from him/ her.

Signs to look out for:

• The employee is unable to meet the targets/ deadlines
• The employee is constantly complaining about the workload
• The employee does not possess the right skills for the job

Here, a PIP can help gauge the underlying reasons for reduced/ lack of productivity and facilitate appropriate measures for both skill enhancement and behavioral adjustments to promote high levels of productivity. 

2. The employee is disengaged

Another case for PIP comes when you feel that a lack of engagement is leading to reduced levels of performance for the employee. 

Signs to look out for:

• The employee doesn’t actively participate and illustrates a sense of withdrawal
• There has been an increase in absenteeism/ uninformed time off
• There has been a decline in the overall work quality

If you create the right PIP, it can help understand why the employee is feeling disengaged and a combination of mentorship, challenging work environment, and other practices can augment engagement leading to better performance. 

3. The overall work culture is suffering

You need a PIP if the overall culture is suffering because of the behavior of a particular employee which needs to be fixed to ensure better organizational performance. 

Signs to look out for:

• The employee is always late to work
• The employee has excuses for everything
• The employee is always complaining about the work delegated to him/ her

Here, a PIP can help the employee work on his/her overall attitude towards work and promote practices and behaviors which can create a positive and high performing culture. 

4. The problem can be fixed with a PIP

You need a PIP only in situations where the performance problems can be fixed with such a plan. Problems where there is a coherent disconnect like insubordination, lack of respect, etc. are quite challenging to be fixed with a PIP. 

Signs to look out for:

• There is a skills-role disconnect
• There is a behavior problem that can be fixed

Bonus tip

Read how to address poor employee performance at work to learn how to deal with performance issues when PIP is not required. This article will help you understand what are the early signs of poor performance and how to structure your performance conversations and feedback sessions effectively.

Duration of a Performance Improvement Plan

A performance management plan can go on for anywhere between 30-90 days or more depending on the situation. Since each PIP is very personal and specific to a particular employee, one fixed duration cannot be determined. However, there are some reference points you can consider:

• If it is a skills gap challenge, 30-60 days is a good duration depending on the nature of skills that need to be learnt. 
• If it is a behavioral challenge, 60-90 days of PIP may be needed to adjust the underlying attitude. 

Anything below 30 days will be too short a time to notice any change. However, anything beyond 90 days can be a waste of time if there is no change in sight. Therefore, it is best to track performance every few weeks and adjust the plan duration accordingly. 

Structure of a Performance Improvement Plan 

Now that you know what a performance improvement plan seeks to achieve and when you should use it, let’s quickly take a look at what you should be including in your PIP, i.e. its structure. Essentially, there are 5 components of an effective PIP

1. The problem

It covers the problem or the performance issue that needs to be worked upon. This involves highlighting the problem, identifying underlying causes and illustrating the impact of the poor performance. 

2. The goal

Second, the PIP should focus on what the end goal or objective is. This involves highlighting what the employee must be able to achieve once the plan comes to the end of its duration. 

3. The action plan

Third, the plan should illustrate how that goal has to be achieved, covering specific actions that need to be taken by the employee and the support that will be offered by the organizations and the managers. 

4. The metrics

Next, metrics for performance need to be clearly highlighted. Depending on the focus of the PIP, you must establish appropriate metrics to gauge whether or not the PIP has worked. 

5. The consequences

Finally, you must focus on including the consequences in your PIP of what to expect if the PIP is not taken into consideration or if the intended goal is not achieved. 

How to write a PIP? 

The natural next step here is to understand how you can write a performance improvement plan with this step-by-step process to ensure you don’t miss out on anything important. 

Step 1: List out the performance gaps

• Highlight the areas in which performance improvement is required like reducing absenteeism, better communication skills, inability to meet targets, etc. 
• Focus on providing an acceptable performance against each deficiency for reference.
• Include specific data such as when performance deficiency was observed, expectations.
• Attach as many credible sources as possible to ensure that performance gaps are evident. 

Step 2: Highlight corrective measures

• Illustrate how the performance gaps can be bridged
• Highlight specific training or learning objectives/ initiatives that should be undertaken
• Focus on specific interventions for each improvement area

Step 3: Create SMART goals

• Highlight what success would look like
• Ensure the goals are Specific, Measurable, Achievable, Relevant, Time Bound
• Create precise timelines for results with an expiration date
• Create milestone goals as a part of the larger goals for the entire PIP duration

Step 4: Define the support and resources available

• Share the support you will provide to make it a collaborative effort
• Mention the training and other learning opportunities that the employee can leverage on the organization’s cost
• Illustrate the additional support in the form of mentorship, coaching, etc. that will be available

Step 5: Develop a check-in plan with metrics

• Be specific on when there will be check-ins to see improvement in performance
• Check-ins could be weekly or fortnightly, depending on the plan
• Establish metrics for each check-in

Step 6: Highlight the impact of lack of improvement

• Clearly illustrate what lack of improvement will lead to
• Focus on measures like demotion, termination, etc. that may be implemented
• Ensure that consequences don’t overwhelm the employee by making their wordings encouraging

How to implement a PIP? 

Once you have written a performance improvement plan, you need to implement it to achieve the desired goals. However, there are many misconceptions about PIPs that can overwhelm employees when you talk about putting them on one. They might see it as a sign of getting fired or it can further demotivate them for being labeled as a poor performer. Therefore, it is important to implement the PIP properly, following these simple practices.

1. Have an initial conversation

If you introduce the plan without any context, you are setting the PIP up for failure

Rather, you should:

• Start with an initial conversation about the performance challenges
• Understand the reasons for poor performance
• Give a subtle hint about the use case for a PIP to improve performance

2. Introduce the plan

After the initial conversation, you can relook at the PIP you have created to check if you would want to make any changes to make it more receptive for the employee based on your discussion. Following which you should introduce the plan by sharing:

• The various sections of the plan and the objective of each
• The rationale and your motivation behind the plan and how it is likely to impact the employee’s professional journey
• What end goals look like to you and how they can be achieved

3. Seek feedback and be open to changes

Don’t make implementation of a performance improvement plan a monologue. Give time to your employee to absorb the information presented and seek feedback by:

• Asking questions on what they feel about the plan
• Checking if there is any disconnect with what they feel and how the plan can be improved
• Being open to changes and suggestions and modifying the PIP on mutual agreement

4. Show support and commitment

Finally, once the PIP is ready, both you and the employee should sign it off to give it credibility. It is important that you make your employee feel comfortable and confident by:

• Showing your commitment with examples of how you will support him/her throughout the process
• Highlighting the additional resources that will be at his/her disposal
• Showing faith in their capabilities with words of encouragement

Review process for Performance Improvement Plan

Now that you have implemented the PIP for your employee, it is important to supplement your efforts with a review process to ensure that the PIP is actually creating an impact. Here are the top practices to ensure effective review:

• Follow a regular check-in based review process and monitor progress on a weekly/ fortnightly basis
• Have a clear agenda for each review meeting and ensure that you are prepared with a list of discussion items
• Focus on factors that go beyond the performance too, including showing up for the review meeting on time, attending the meeting regularly, coming prepared, etc. to gauge seriousness for the PIP
• Identify areas of performance improvement and acknowledge the practices that led to the same
• Focus on the gaps that still exist and go back to the PIP to continue the efforts
• Measure performance along the established metrics to gauge the impact
• Realign on corrective measures and support in case the expected improvement is not observed
• Encourage self reflection by the employee, focusing on what they have realized, what they seek to do next
• Document the progress on a regular basis to ensure a steady upward curve
• Close the PIP once the goals/objectives have been met
• In case the goals have not been met and the expiration date of the PIP has arrived, look at the consequences documented and follow a plan of action

Top examples of PIP 

Depending on your employees, there can be different situations or reasons for implementing a performance improvement plan. To give you a broad understanding, we have captured below some of the examples of performance improvement plans.

Example 1: Inability to meet deadlines

Performance problem: Mr. X has missed 5 deadlines over the past 2 months. Despite having a conversation on the same and sharing concern over the need to meet deadlines, there has been no improvement in the attitude or performance. The major problem lies in the inability to multitask and manage work properly, which leads to delay in work submission, impacting the sales of the organization. 

Objective: Meet all deadlines by augmenting efficiency at work and taking support wherever needed. Ensure that there is no delay in delivering work based on expected timelines

Action plan: 

• Leverage project management tools to keep a track of work and visualize the deadlines
• Set reminders and prioritize work by speaking with the managers to ensure deadlines are met
• Seek support from colleagues in case of time crunch or skill gap
• Undertake training on time management and upskilling for tasks that you are not trained for

Improved performance metrics: Reduced number of missed deadlines while maintaining the quality of work. 

Example 2: Lack of productivity

Performance problem: Ms. Y has been unable to meet the targets set for marketing every month. All her colleagues are able to generate the required traffic for their social media handles, except her. Even after several months, there has been no increase in the traffic and even maintaining the same engagement has been difficult for her. This has led to an impact on the organizational brand as a marketing agency.

Objective: Increase the traffic to the social media handle by xx% in the next 60 days and maintain it thereafter

Action plan:

• Undertake social media management training focused on increasing and retaining traffic
• Learn how to make your content more engaging for your target audience
• Create an acquisition and retention strategy by collaborating with your peers and manager

Improved performance metrics: Increased traffic on your social media handle with high levels of engagement

Example 3: Inaccuracies in work

Performance problem: Mr. Z has been constantly making errors in his work. He is responsible for managing the financial statements of the organization and has been unable to ensure correct data entry. These inaccuracies are leading to discrepancies in the organization’s balance sheet, impacting the business as a whole. 

Objective: Significantly reduce the number of errors and inaccuracies in work across the financial statements

Action plan:

• Undertake a training on advanced excel/ other accounting software to leverage the advances of automation in the field
• Spend at least 30 minutes every day to review your work before sharing it with the team
• Seek support from Ms. A to check your work before it reaches your superiors

Improved performance metrics: Reduced inaccuracies in work and an improved quality of output.

Use performance snapshots for PIP

While we have talked about some of the use cases when you may want to leverage a PIP, having additional support, data and understanding can help you go a long way. Here, relying on performance snapshot by SuperBeings can enable you to recognize constant low performers to adopt PIP for.

• Start with capturing performance feedback on regular intervals from managers on performance of your employees, using pre-built templates
• Capture performance trends over time through an automated 9-box grid which captures the progress in performance across the 9 boxes in a bias free manner
• Compare the progress for different team members and leverage data from previous snapshots to gauge development or low levels of performance
• Leverage these data points to identify employees who have shown little or no progress over time and who may need PIP to facilitate development

Frequently asked questions about Performance Improvement Plans

It is quite clear by now, that a performance improvement plan can significantly help you in creating a high performance culture by enabling underperforming employees with the right guidance, support and a structured plan to address the problems. However, before we end this article, we understand that several questions might be on your mind as you start your journey. Here are answers to a top few.

Who should write PIP: managers or HR?

A performance improvement plan should be written by the line managers or the direct reports of the employee in question. This would ensure that the performance problems and corrective measures are in line with functional needs. However, it is important that the PIP is reviewed by the HR team to ensure the language and the plan complies with the overall policies. 

Is PIP a development strategy or an exit route?

Many employees believe that a PIP is an indicator that they are going to be fired or an exit route. However, if used effectively, it is essentially a development strategy to help employees bridge the performance gaps. The onus of communicating the right meaning lies with the managers. Managers need to show it as a tool for empowerment and improvement and not as a last resort which will end up with firing the employee. 

Can a PIP be extended?

The general duration of a PIP ranges between 30-90 days and an extension within this range is normal. Depending on the performance metrics, the manager and the employee can extend the PIP from 30 to 60 days. However, an extension beyond 90 days is generally not observed, unless there are any special circumstances like a break due to some personal emergency, etc. 

When should a PIP be developed?

A PIP should be developed after a performance problem becomes apparent through due course of time. A PIP cannot be implemented when there is a slight dip in performance for the first time. Initial instances can be addressed with feedback and guidance. However, if the performance problem becomes a trend over time, a more structured and stricter course of action is needed and that’s when a PIP should be developed. 

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Poor work performance is the biggest concern for most companies as they not only affect the overall organizational productivity but also brings down employee engagement and morale. 

Many managers find it difficult and uncomfortable to deal with such employees, and they either try to ignore it or rush decisions that cause more harm than good. 

Tackling poor employee performance with caution and care is a crucial part of a manager's responsibility. In this article, we will discuss the following to help you get to the root of the problem and help your employees perform better.

• Common causes of poor performance
• Manager’s guide to addressing poor performers 
• 8 best practices to manage poor performance at work

What should you consider as poor employee performance?

Bad employee performance is often the indication of the employee’s inability to maintain the organization’s standard, quantity, and quality of work.  ‍

It shows that the employee is unable to meet their targets and/or engage effectively with the team.

Poor performance can be behavioral or contextual. 

• Performance can either be a result of lack of clarity about their job, responsibilities, and inadequate training. 
• Or it could be caused by the employee’s low sense of responsibility, unwillingness to learn, or habit of doing the bare minimum to just get by. 
• In some cases, performance at work can also be impacted by the employee’s life situation outside of work.

As a manager, your job is to understand the employee’s perspective and figure out ways to help and support them.

But as you already know, performance conversations can be tricky. Which brings us to our next section

Manager’s Guide to Addressing Poor Performance

It is important to remember that in most cases poor work performance is often unintentional. The role of a manager is to identify the exact reasons and causes behind below expectation performance. A manager needs to formulate action plans to understand the precise reasons and issues that trigger poor performance and treat the issues immediately. 

However, when a person is underperforming intentionally, it becomes evident in his actions and attitude towards instructions, response, and collaboration within the team. It is mandatory to provide honest feedback and take strict disciplinary actions in such cases. 

Here’s an actionable guide that will help you address the issue in a structured way —

Before

As a manager, you must reflect and analyze the following factors before addressing poor performance issues of an employee.  

1. What are the factors that can spark unintentional bad performance at work?
2. Has the organization been transparent and honest in outlining the job role, responsibilities, workplace policies, and expectations to the employee?
3. Has the organization been lethargic and indifferent towards the employee’s demands and requests? Have we provided the right support when needed?
4. Has the organization been open to comments, honest feedback, and employee reviews?
5. Has the organization been deciding based on the manager’s emotions and instincts over the organizational policies and practices?
6. If the employee is deliberately performing below expectations? 

Before setting up a meeting with the employee, you need to have an open mind to discuss the concerns with transparency and honesty. Do not let emotions take control of the situation and make them worse. Discuss with the employee to review the assigned roles, responsibilities, targets, and expectations to create a master plan for improving performance. 

Also read: Top 10 performance review tips for managers  

During

A manager needs to address poor work performance with necessary data and facts to support his points of concern. Jumpstart a conversation with the employee’s view on his contributions and performance in the organization. It is critical that you bring clarity to your statements and communicate it to the employee. 

• Be specific with the issues
• Present the supporting facts of your statement
• Listen to employee
• Discuss action plans
• Set reassessment interval
• Set realistic performance improvement metrics and KPIs
• Support the employee with anything that he needs to perform
• Create strategies to track the performance consistently 
• Compare his performance against the assigned job role, responsibilities, and goals
• If you sense that the issue is deliberate, remind her of the disciplinary actions, company policies, and liabilities 

During the meeting, refrain from heated arguments. Instead, use a positive tone and language. The employee must feel motivated and revamped after each discussion, not frustrated and depressed. 

After

The basis of maintaining a healthy employee-manager relationship is to practice effective communication. Even a simple email to thank the employee for his time and contribution can go a long way. Feel free to reaffirm the points discussed and expectations set. 

As a general rule of thumb, after a discussion on poor work performance —

• Reassure the employee with all the necessary support and guidance
• Follow up with them regularly
• Examine the performance frequently
• Identify the positive outcomes, recognize and offer appreciations and rewards

Offering additional guidance and support to the employee after the tough appraisal meetings will spark positivity and optimism. Being consistent in following up with the employee and keeping him in the loop will make him involved and focused. 

Best practices for managing poor work performance

Below are some of the common practices to go deeper into employee performance issues and deal with them in a better and easier way.

#1 Identify the common causes

Poor performance is evident when the gap between expectations and realities increases, and there is a lack of productivity, consistency, and involvement. 

Let us look at some of the common causes of poor work performance —

• Lack of knowledge and training
• Lack of desired skills and ability
• Lack of necessary tools
• Lack of desire and motivation
• Poor communication
• Poor delegation and supervision
• Lack of appreciation and recognition
• Unrealistic target and employment conditions
• Unclear job roles and expectations
• Team issues due to ego, clashes, conflict, and harassment

Whether intentional or not, the root causes may point to some of the internal practices and policies of the organization. You must also initiate a formal discussion to identify the underperformance causes, and offer solutions at the earliest. 

#2 Address the issues immediately 

When you recognize poor performance, you must address it immediately. It helps to resolve the hinges quickly and easily. Some managers find it uncomfortable to have such discussions and delay feedback. Procrastination and delay will cause disengagement and negativity. 

A quarterly or monthly performance review cadence solves this issue well. You can use these review sessions to — 

• Review performance expectations vs. reality
• Set up a meeting for discussions
• Offer to counsel if needed 
• Offer constructive criticism
• Communicate the expectations clearly 
• Keep a record of the performance indicators 
• Provide them with the necessary tools, guidance, and support
• Implement formal measures to evaluate and publish performance metrics 

Also read: Top 10 performance review tips for managers

#3 Provide honest feedback 

Providing honest feedback to the employees during appraisals may seem strenuous; but it is vital that the manager discusses the issues with an open mind and points out the observations clearly.

The exemplary practice is to engage in constructive discussions during the performance review process — i.e. comparing reality against expectations and pinpointing the issues with solutions. 

Honest feedback will help employee self awareness and rectify the shortcomings. Having an open discussion platform with required feedback will prompt the employee to open up their part of the story, leaving room for suggestions, corrections, and improvement.

Also Read: 150+ performance phrases to use in your next review

#4 Encourage accountability 

Making employees accountable for their job is the best way to improve performance at work. A team fails when an employee underperforms and is disengaged from the team. Therefore, it is mandatory to set expectations and accountabilities in the early stage itself. 

An employee starts to work smart when he is held accountable for his actions. It helps build trust, reliability, and internal collaboration within the department. The group becomes more engaged and achieve when they feel comfortable and spirited to support each other to achieve a common goal. 

 #5 Recognize employee strengths

Another way to tackle poor performance at work is to recognize employee strength and reward them as and when needed. Timely recognition will boost the employee’s spirit and help him achieve more. When there is no proper recognition of talent and strengths, employees often feel demotivated and disengaged. Therefore, you need to acknowledge the accomplishments and good attitude of the employees at times. Not only that —

• Understanding and acknowledging the employee's strengths and interests will also help the manager reassign the employee to a better performing role. 
• Rewards and appreciation will help her reinforce self-assurance and positivity. 
• It is also ideal for the manager to offer add-on training sessions and workshops to enhance his skills and strengths at times.

#6 Develop a performance improvement plan

A performance improvement plan is needed to guide the employee after the appraisal. It is a documented workflow designed to improve the employee's performance and align him towards a new set of expectations and goals. It outlines the quality, quantity, and level of performance expected from an employee. 

An action plan outlines —

• the existing issues
• suggestions to overcome such troubles
• Checklists
• Expectations
• scheduled reviews and appraisals
• accountabilities and 
• performance improvement roadmaps

A documented plan allows you to review the action plans continually to evaluate their effectiveness and success. Evaluating employee progress once in a while and offering timely suggestions will keep them motivated and focused. It is also critical to provide emotional and professional support when needed. It boosts their confidence and prompts them to come to you when in need. 

 #7 Use a performance management software

Managers can use KPIs, appraisal forms, feedbacks, excel sheets, and PIP programs to track performance improvement to an extent. But having proper software to track the performance will be an added advantage. The software will automate the process with performance histories, review templates, check-in recommendations and other alerts.

Check out the 8 top performance management software in the market today (includes a buyer’s guide as well) 

#8 Having tough conversations and disciplinary actions. 

Clear organizational policies and practices will help the manager perform better. It will empower the manager to speak to the underperforming employees openly without emotional commotion.

A manager must convey criticism and dissatisfaction to the employees with honesty. It is your duty as a manager and your obligation to the company.

‍Honest opinions may trigger discomfort initially but will blend in gradually and open a platform for improvement. Strict disciplinary actions must be part of the policy that must be executed without discrimination or partiality.

Disciplinary actions may include oral warning, written warning, pay cuts, dismissal of incentives and perks, and termination of employment eventually.

The manager must not hesitate to take appropriate actions at the right time as it ultimately helps the organization improve its productivity and overall performance.

Wrapping Up

Each employee has a significant role in the success and failure of any organization. Therefore, it is the fundamental responsibility of a manager to identify underperformers without hesitation. Poor performance of an employee will bring failure to the team. Poor performance of the team will eventually add to the breakdown of the organization. Therefore, the sooner you deal with performance issues the better it is. 

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10 second summary

• OKRs are an effective goal setting practice to build an effective  performance management system
• A performance management system should focus on uncovering strengths as well as weaknesses
• Written feedback constitutes an important part of performance management, which the leaders must guide the managers to undertake
• An effective goal management system should focus on clearly communicating the top priorities
• Having a contribution-driven rating scale over expectation-driven rating scale is important
• It is important to de-link compensation and review conversations

Continuing our focus on performance management, we recently had a discussion with the Chargebee team to learn what performance management practices they followed to build a $3Bn SaaS unicorn. In our 3rd episode of The Talent Talks, we were thrilled to be joined by Rajaraman Santhanam, Co-Founder & COO and Lavanya Gopinath, Director, Ops, Chargebee. 

For those of you who aren’t aware of Chargebee’s name, it’s a financial services company that rose to unicorn status in record time. With 1300 employees and despite having a steady emphasis on high performance, Chargebee is known for its employee-centric people management practices. 

Let’s get into the details of how Chargebee creates a high performance culture all year round and see what we can adopt to scale faster.

Performance management system at Chargebee

What was the context when you designed your performance management system?

When we started in 2011, there were not a lot of startups and the biggest source of revenue was from Europe. Sitting in Chennai, India, the only way to acquire knowledge about selling to customers in Europe was by talking to people and learning. Thus, learning continuously and building a network to learn from became important, which overtime evolved into a culture of continuous learning. After 4-5 years, we decided to build the core values or tenets for Chargeebee, by gathering a lot of team members together and brainstorming on what values do they identify with Chargbee. Four core values came to the forefront, Curiosity, Customer Centricity, Empathy and Bias for Action. 

Four core values at Chargebee — Curiosity, Customer Centricity, Empathy and Bias for Action

Eventually, these have become the basis for how we operate across all verticals, including our  performance management system. 

What are the constituents of the performance management system at Chargebee?

With performance being at the center of the performance management system, we look at it from a team and an individual perspective. 

Components of team performance management system

• Adopted the OKR framework about 2 years ago, which became the big rock for team performance within the performance management system
• Each team has specific KPIs which add to their performance management

Components of individual performance management system

• Created our own evolution of the OKR framework, which we call Individual OKRs or IOKRs, which is still evolving
• IOKRs also bring in learning and development into setting goals at the individual level. 

Process of our performance management system

• Annual performance rating, review conversations and a rating cycle 
• Quarterly review conversations aligned to the quarterly goal setting cycle 
• Bi-weekly one-on-one conversations, also focusing on review and feedback 

Thus, formal performance review as a part of our performance management system is annual in nature, but is supported organically by continuous interventions. 

Also Read: How to successfully run weekly, quarterly and annual OKR reviews

Philosophy of the performance management 

• Focus on uncovering strengths to value team members for what they bring to the table and delegate work accordingly
• Focus on weaknesses to understand the gaps and facilitate hiring for the skills gap
• Strengths and weaknesses are uncovered by review and self reflection from team members on areas of non-clarity, knowledge sharing, etc. 

Recognition for performance at Chargebee

• Focus on a culture of recognizing each other. Rolled out a program called Rewards by Bonusly which allows team members to celebrate those who help them become successful or achieve an accomplishment, i.e. celebrating help by others
• Decentralized recognition efforts with flexibility for teams to decide which are the best and the right practices for effective recognition that they are most convinced about
• Supported by other efforts like spot bonuses in the form of cash, eSOPs, etc.

Chargebee has decentralized recognition efforts with flexibility for teams to decide which are the best and the right practices for effective recognition that they are most convinced about

Also Read: How manager can help employees write a great self assessment

How can organizations drive a strengths based performance management culture?

We started by creating a culture of written feedback to identify strengths. Our focus towards strengths based performance management involves:

• Giving feedback in writing, be it bi-weekly, quarterly or annually which becomes a frame of reference and the next feedback comes on top of that which enables everyone to reflect on their progress every now and then
• Capturing 360 degree feedback in writing to identify behavioral patterns and to highlight strengths and areas of improvement
• Adopting the right communication frameworks to share the feedback so others are able to receive it openly
• Encouraging our team members to share feedback directly
• Being specific in feedback that others can relate to and absorb and form action items 
• Getting in the habit of sharing feedback 1-o-1 and in real time

To become a part of such conversations and learn from the top HR leaders directly, sign up for The Talent Tribe, the best online community for HR and talent management professionals

Goal management with OKRs at Chargebee

What is the context behind the goal management system chosen by Chargebee? 

We adopted the OKR framework as our goal management system about two years back. Our goal management system is based on the philosophy that we need to:

• Focus on fewer things, but go deep into the focus items
• Clearly communicate the top priorities for the organization
• Reinforce the top priorities among team members

For instance, last year we acquired a few companies and our goal for this year is to unleash the multi-product motion by learning as much as possible about those companies to increase revenue from direct selling, cross selling and upselling. For Chargebee, the goal management system is essentially about clearly communicating the goals. 

How did you introduce and roll out OKRs at Chargebee?

Before adopting OKRs, teams used to set their own goals, which were not visible on a single dashboard and leaders used share goals, which was often conversational. However, in the growth phase, making the goals visible became really important to enable people to align and prioritize. Thus, we built the habit of setting goals quarterly and making them visible for everyone. This led to what we called the ‘Quarterly Commits’ and the idea was to keep them focused and visible to everybody. 

In the growth phase, making the goals visible became really important to enable people to align and prioritize. Thus, we built the habit of setting goals quarterly and making them visible for everyone

We put these Quarterly Commits on sheets, which facilitated visibility, gentle nudges, checking other’s commits, getting an understanding of what others are doing and how one can add value to prioritize one's own commits.  This set the stage for OKRs because they were simple, focused on big rocks with measurable outcomes. We started it as a pilot project for a few teams for a quarter and then finally rolled it out for the entire organization. 

How do you apply OKRs for goal setting and performance management system?

Today, the OKRs exist at three levels and focus on setting and reviewing.

Setting OKRs

• Between october-november, there are a lot of conversations at the executive levels, focused on questions to craft the company OKRs. This is an annual exercise which is reviewed every quarter to ensure relevance. They are made visible to everyone by mid-december.
• This gives the directional impetus to create quarterly priorities and OKRs at the functional level. The focus is also on alignment between functions to facilitate cross collaborations. Thus, there is a sharing of functional OKRs at a quarterly level. 

Reviewing OKRs

• Organizational level reviews to gauge OKR progress happens on a monthly basis.
• Within teams, it might be even more rigorous, which has been left for the teams to decide, depending upon what their key results are. Sometimes it makes sense to do it on a weekly basis, sometimes bi-weekly and sometimes monthly. 

Furthermore, on a quarterly basis, the CEO goes and shares progress, thoughts on where we are, as well as what we need to correct and what can be done better with an open presentation with the entire organization. Using a specific OKR tool provided a hierarchical view to help us understand what maps to what. 

On a quarterly basis, the CEO goes and shares progress, thoughts on where we are, as well as what we need to correct and what can be done better with an open presentation with the entire organization

How do organizational and team goals translate to individual goals at Chargebee?

It's a collaborative process. This also happens at the quarterly level. 

• Once the team OKRs are set, the manager is able to give some level of visibility into the priority for the team. This enables the individuals to set their own development goals and their specific contribution goals to a team OKR. 
• There is a specific conversation on the goal setting itself which works in tandem with the quarterly review and expectation setting cycle. 
• There are inputs from the manager, but there is also an input from the individual which are captured in the IOKRs.
• Focus is on asking a lot of questions in order to take a key result and make it really quantifiable to augment clarity. 
• We emphasize on the importance of building the habit. While creating a goal setting system is not an easy task, we focus on building perseverance to adhere to it and breaking out of the inertia to build this as a habit and organization. 
• We have evolved into the place where people have started thinking about clearly articulated outcomes as OKRs.  
• To avoid the confusion of KPIs or KRAs, we decided to evolve with IOKRs. 

Without building a habit and knowledge about the OKRs, any efforts towards OKRs will not work out really well. Thus, it is important to invest time in the beginning to bring the knowledge level of OKRs up and build the habit for the first 2-3 quarters to break the inertia, post which stabilization and perseverance begins

Thus, OKRs start from the CEO and stop at the team level, while IOKRs are for all team members, individually. Building a habit and knowledge about the OKRs are extremely important and without handling these two, any efforts towards OKRs will not work out really well. Thus, it is important to invest time in the beginning to bring the knowledge level of OKRs up and build the habit for the first 2-3 quarters, post which stabilization begins. 

Performance review and assessment at Chargebee

What is the frequency of performance assessment for the performance management system?

• At an organizational level, performance assessment as a part of the performance management system is a quarterly practice to capture performance reviews and notes into the HRMS system
• Some teams capture notes monthly which feed into the quarterly conversation, to make the process simpler
• The annual level conversation partly focuses on the performance that went by, but also is an opportunity to frame the opportunities for an individual in the upcoming year, along with goals 
• The annual performance assessment is a two-part conversation where we also share the rating of how the individual has contributed to the organization 

Also Read: How often should you conduct a performance review

How did you decide on the right rating scale?

We looked at the three-point scale, the five-point scale and questioned if we needed a point scale. Furthermore, there were questions whether ratings mattered at all. Then, we decided to apply them to our context and see what would be meaningful. 

We transitioned performance rating from an understanding of meeting expectations to reflecting the contributions of an individual, vis-à-vis reflecting the expectations of the manager or the team. 

That was the pivot, a contribution based rating:

• It is a four-point scale
• The two middle options are solid contributors who are really good at their job in the middle and strong contributors who probably take it up a notch and go beyond the contributions of that role. You can see their contributions visibly in other parts of the organization and other teams
• The outlier on one end of the spectrum are the exceptional contributors 
• The other end of the spectrum has limited contributors who are newer and are trying to get their feet wet and trying to figure out how they can grow into a solid contributor 
• The frame is to show people where they are now and maybe where they can feel help in order to perhaps contribute better

Where is this rating scale used? 

Most rating scales focus on performance of the past, however, as a part of our performance management system, we believe that any appraisal or promotion is for what they will do in the future. Thus, our performance rating scale seeks to capture the philosophy of focusing on the future. 

For instance, if someone has a bad performance in a quarter and if you're still excited about that person because they have continuously performed well, and believe that they are a strong contributor, you need to give them a rating that reflects that. Our rating scale brings this change into the conversation between the manager and the team member. For us, every performance review is a hiring decision. 

For us, every performance review is a hiring decision

We also request the manager and team member to mutually align on the rating for the performance management system. We expect there is no ambiguity on the rating and the areas of improvement as part of the performance review. 

Finally, the contributor rating plays an important role in awarding the compensation revision. The onus of this performance review for performance management system is put on the individuals instead of the managers so that the individuals take ownership of blocking a time, writing it down and ensuring that their manager also writes it down and then owns its own outcome for that. 

Also read: 100+ self review comments and phrases for performance assessment

How do you de-link compensation and ratings for team members?

Compensation is a function of the market as well. Thus, if someone who is a solid contributor has some issues with compensation, we review it on a case to case basis. Furthermore, these two conversations, compensation and recency, happen at least with a gap of thirty days, to ensure there is no recency bias. The compensation is driven by a strong recommendation from the HR around the range and each team also has a budget which they can allocate as they see fit. 

What principles should organizations follow while designing their performance management system? 

Try and understand what sort of an organization you want to build i.e. what are you really looking for in your people or what is that thing that needs to be in your DNA

At Chargebee, the hunger to learn and grow is something that you can see is what we look for, and that is probably an identifiable trait that you can notice. 

• Write down the traits you are looking for 
• Keep your performance management system simple
• Articulate the why and share it with the team
• Keep iterating as you scale

Is there a bell curve which you follow?

No, there is not really a bell curve that we follow at Chargebee, yet. We personally don't believe in the bell curve but we need to see as we scale through our own journey and how it evolves in the next one or two years. 

How do you train managers to deliver feedback effectively?

• Showing managers how to write feedback is an important exercise that organizations have to go through from the top
• Adopting the coaching methodology and then demand from managers to do it for their 1-o-1 team members 
• Running and a lot of office hours leading up to the final date of the closing the performance review conversation, having the managers come to the HR team to walk them through some of the samples written down and how they could use the framework
• Rolling out a proper manager program focused only on effectively giving written feedback

Wrapping up

To conclude, it is clear that effective goal setting with OKRs, performance review and written feedback collectively contribute to a robust performance management program. It is important to have a clear vision in mind when designing a performance management system, both on what you seek to achieve and the DNA of the organization you're trying to build. Finally, it is important to keep iterating on the go, to adapt to new realities and dynamic priorities

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If you are trying to design a continuous and comprehensive performance management system, you would know the importance of conducting a 360 degree feedback. However, to make this exercise most effective, you need to go beyond simply involving everyone in the process to getting the process right — most importantly asking the right feedback questions to each stakeholder. This article will focus on how to write 360 feedback questions that create maximum organizational impact. 

What to include in your 360 feedback questions?

Let us quickly start by understanding what you must include in your 360 feedback questions to make it more effective.

1. Focus on performance related as well as personality oriented questions 
2. Ensure they do not send the person answering the question on a wild goose chase, make them relevant
3. Eliminate any form of bias that might come along the way
4. Cover different aspects of employee’s contribution and commitment to the organization
5. Focus on aspects of how the employees see themselves, how their managers, peers as well as others see them

Read: How and when to conduct 360 degree feedback

How to write excellent 360 degree feedback questions? 

Without wasting any time, let’s dive into the 10 tips that can help you in writing excellent and effective 360 feedback questions.

1. Keep the questions simple

Keep the language easy to understand and avoid using technical jargon. Make sure everyone is able to gauge the same meaning of the question and the focus is not lost in translation.

2. Build on them throughout the year

Keep adding the questions list for your next 360 degree feedback to your records throughout the year. 

Since 360 feedback should focus on all aspects of an employee, if you add questions at different times, they will be more relevant

3. Frame the questions in a bias free manner

Ensure that the questions don’t have an inherent bias or don’t push or influence the respondent to answer in a specific manner. Make sure that the questions can have varied options as answers and not a singular focus because that’s what you want as a result. Furthermore, the questions should not create a bias in the mind of the reader of any kind. 

4. Be specific

Focus on one specific attribute or competency for each question. Don’t try to include everything in a single question to keep the number of 360 feedback questions low. You will end up receiving responses for only a part of the question and it will confuse the respondent too. For instance, if you want to talk about collaboration, do not couple it with factors like leadership skills or problem solving. 

5. Identify competencies that matter

Before you start framing the questions, identify the key competencies that are most important for your organization as well as the role. Competencies could include communication, innovation, strategic thinking, etc. 

6. Check the relevance of the questions to the role and organization

Make sure that as a whole, all the questions cover all aspects you want to gauge the employee on from an organizational and functional role perspective. However, don’t overstuff too many competencies, keep them relevant to the employee in question. For instance, a person in sales may not need a question on technology knowledge as a part of 360 feedback questions. 

7. Be clear on the objective of each question

In addition to being specific, be clear on what you wish to gauge or understand with every question you ask. For instance, a question on whether or not the employee pays heed to the opinion of others can help understand the level of active listening and a spirit of inclusion. 

8. Choose the right type of questions

You need to have a fair balance between open ended and close ended questions. 

• The close-ended 360 feedback questions will help you gauge the pulse of the organization as a whole, analyze trends and have clear data points to focus on. 
• The open ended questions will enable you to get a context and understanding behind the trends and get deep down insights to taking strategic action. 

9. Make the process easy

A very long or complicated process is likely to reduce participation and defeat the purpose. Therefore, keep the count of 360 feedback questions to a maximum of 30-40 and make it very easy to participate and complete the same. Preferably, disseminate it through your existing communication/ collaboration tools. 

10. Ensure evaluation is simple

Finally, make sure that the questions are framed in a way that is simple to evaluate. Too complex evaluations might take too much time and delay the action and execution, leading to reduced faith and impact on 360 degree feedback. 

Best 360 feedback questions for different contexts: 50+ examples

To ensure that your questions are relevant and specific, you can start with writing 360 feedback questions for different situations and contexts. Put simply, in this section, we will focus on what you should be asking and when. It will also help you in picking the right questions for the right employees, instead of bombarding everyone with the same questions.

8 questions to measure manager effectiveness

These questions will help you understand what your team members think about the overall management at your organization and the effectiveness of specific team leadership.

1. What are some areas of improvement for your manager?
2. Do you receive adequate mentorship from your manager?
3. Does the manager treat all employees fairly and with respect?
4. Is the manager able to encourage and motivate the team effectively?
5. Is your manager able to address challenges and problems you come across?
6. Does the manager provide a clear understanding of what needs to be done and why?
7. Does your manager provide you with the resources needed to accomplish the tasks delegated?
8. Does your manager create a safe and inclusive environment to work? Elaborate with some instances.

8 questions to understand how well your employees are communicating

These questions can help you understand the level of communication efficiency in your organization to ensure there is no gap between intention and execution.

1. How well does the employee listen to the task/work?
2. Does the employee welcome conversation and discussion?
3. Does the employee share his/her ideas with a larger group?
4. Is the employee open to opinions/ suggestions made by others?
5. How well is the employee able to communicate with the coworkers?
6. Is the employee comfortable in giving presentations/ demonstrations?
7. Is the employee able to communicate clearly with customers? Illustrate with a few instances.
8. Do you think the employee understands your instructions and clarifies in case of confusion?

8 questions to identify potential leaders

Use these questions to identify and nurture employees that show leadership potential to build an effective succession pipeline.

1. Do you think the employee can make critical decisions?
2. How well is the employee able to perform under pressure?
3. Does the employee take ownership and initiative of projects?
4. Is the employee able to mentor and guide others in the team?
5. Are you able to rely on the employee in case of an emergency?
6. Does the employee take leadership in projects? Elaborate with an example.
7. Is the employee able to address challenges and problems for other team members?
8. Does the employee invest time and energy into picking up leadership and other skills?

8 questions to measure the level of motivation and commitment

These questions can help you understand how committed your employees are towards the organization, which will impact their level of engagement and quality of work. 

1. Do you think the employee is giving their 100%?
2. Does the employee motivate others in the team?
3. Does the employee voluntarily ask for more work?
4. Does the employee show motivation towards his/her work?
5. How do you gauge the level of motivation for the employee?
6. Has the employee been vocal about what he/she feels most motivated about?
7. Does the employee go out of the way to finish their work/ help others? Give an example.
8. Is the employee’s level of motivation consistent or does it vary based on different factors like nature of tasks, time of the year, etc.? Elaborate.

8 questions to understand the level of problem solving capabilities

You can leverage these questions when you wish to understand which employees are quick to think on their feet and will be able to address problems/ challenges that might come their way. 

1. Is the employee able to recognize and evaluate a problem?
2. Is the employee open to asking for help when a problem arises?
3. Is the employee confident about navigating a problem independently?
4. How open is the employee to different suggestions to problem solving?
5. Does the employee offer solutions when you face a problem as a group?
6. Does the employee take ownership of executing solutions to the problems?
7. Has the employee been able to come up with solutions that have been implemented effectively?
8. How innovatively or creatively is the employee able to come up with solutions? Share a few examples.

8 questions to know how well your organization and employees are aligned

These questions can help you gauge the level of alignment between what your organization stands for and the core values/ beliefs of your employees. 

1. Does the employee’s behavior reflect company values?
2. Does the employee understand the organizational goals?
3. Is the employee aware about the core values of the company?
4. Is the employee passionate about what the organization does?
5. Is the employee open to aligning his/her goals with organizational goals?
6. Does the employee make an effort to contribute beyond their annual KPIs?
7. Is there an alignment between the company and employee goals? Elaborate.
8. Does the employee understand the rationale and purpose behind each value?

Read: Strategic goal alignment: How to align team and organizational goals

8 questions to measure the interpersonal skills

Focus on these questions when you want to understand how well your employees are able to connect with their peers and other stakeholders.

1. Is the employee easy to collaborate with?
2. Is the employee a team player? Elaborate.
3. Does the employee foster a culture of inclusion?
4. How well is the employee able to connect with others?
5. Is the employee willing to make extra efforts to help others out?
6. Does the employee believe in open discussion with the entire team?
7. Does the employee show empathy and compassion for team members?
8. How often does the employee have conflict with others? How does he/she resolve the same?

8 questions to gauge the efficiency of your team members   

These final set of questions can help you gauge how efficiently the employees are able to get work done. This points to the presence of the right skills to utilize resources in the best way possible.

1. How efficient is the employee? Give examples
2. Does the employee utilize resources efficiently?
3. Is the employee able to finish his/her work on time?
4. Is the efficiency of the employee consistent over time?
5. Does the employee meet the expected quality of work?
6. Is the employee able to augment efficiency for all tasks?
7. Has the employee shown any improvement in processes?
8. Has the employee been able to facilitate efficiency across the team?

Free template for 360 feedback questions

To keep the entire survey with 360 degree feedback questions interesting and engaging, you can experiment with different question formats and templates. While some of your questions can have simple Yes/No answers, some can have multiple choices along with room for providing open ended answers as well. Here is an easy to follow template you can leverage.

• Pick a key competency
• Identify attributes for the competency
• Create a spectrum of responses
• Supplement it with open ended questions

Example of 360 feedback questions template

Key competency: Strategic decision making

Top line: The employee/ subject name is able to

Attributes: 

1. Make decisions under pressure
2. Consider all possible outcomes and scenarios
3. Bring everyone onboard and facilitate collaborative decision making

Spectrum

1. Strongly agree
2. Agree
3. Neither agree or disagree
4. Disagree
5. Strongly disagree

Open ended questions

1. Share a few instances where the employee has been able to make strategic decisions for the organization
2. What are key areas to improve for the employee as a strategic decision maker?

How to ensure validity and reliability of a 360 degree feedback report?

Once you roll out the survey with your 360 feedback questions and receive the answers, you need to analyze the responses to come up with a final report and plan of action. However, any response analysis is subject to biases and other factors which might put the validity and reliability of the report into question. Fortunately, you can leverage these following practices to eliminate such instances:

• Create a team of at least 8-10 reviewers from diverse backgrounds, teams and experiences
• Have a clear and uniform process of analysis based on a fair understanding of different meanings
• Cross analyze responses among different reviewers to ensure a consistency of understanding
• Create the report and take it back to a small group of employees to gauge whether or not they align and agree with the results and next steps
• Encourage greater discussion on open ended questions

360 degree feedback FAQs: Common concerns for managers answered

Before concluding this article, we would like to discuss the top 8 questions that most managers have when it comes to 360 degree feedback, highlighting concerns they may be having.

1. How to encourage team members to rate their peers?

Highlight how the performance and feedback on the performance of others is likely to have an impact on their performance too. Make them believe they can be an integral part of the growth journey for their team members.

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2. How to ensure accurate ratings and feedback?

Make the feedback anonymous to prevent sugar coating. At the same time, do not rely upon a single review as the ultimate feedback for any employee. Analyze at least 2-3 feedback responses for each employee to get the real picture. 

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3. How to make the process time effective?

Leverage technology platforms to roll out the surveys and collect responses. Furthermore, you can rely on the NLP sentiment analysis to gauge insights from open ended questions in addition to trend generation based on quantitative questions. 

Check out how SuperBeings can help you conduct seamless 360 degree feedback. Book a free demo today

4. How to increase participation?

Highlight the positive impact of participation as a whole. Make it an interesting part of the employee lifecycle. Provide employees designated time within their work schedule to provide feedback. Do not make it an added burden. Additionally, keep the process simple with not a lot of questions at once. 

5. Should the 360 feedback process be anonymous?

Depending on the nature of the organization you can decide on the level of anonymity. Facilitate anonymity will help you fetch greater and more authentic responses. However, sometimes, you might struggle with context in this case. Therefore, you should adopt an approach of flexible/ partial anonymity.

6. How to secure leadership commitment?

Create a business case for 360 degree feedback. Illustrate how it can lead to a better employee experience, strategic learning and development, greater employee retention and other aspects which can lead to better performance and productivity. 

7. How to prevent biased responses?

Ensure that your questions are neutral and don’t lead to a specific sentiment or response. For instance, if you want to gauge punctuality for an employee, don’t use statements like do you think the employee is always late to work, rather focus on how would you rate the punctuality and sense of time for the employee?

8. How to prevent recency bias?

Try to conduct 360 feedback on a regular basis and not wait for the end of the year to ask all the questions. Maintain a cadence to gauge responses. 

Wrapping Up

As we end this discussion, it is clear that if you want to write 360 feedback questions in an effective way — you need to adopt an all encompassing approach, taking into account the different aspects of employee attributes, performance, personality and behavior. 

It is, therefore, ideal to leverage platforms like SuperBeings to help you roll out, gather and analyze the responses using NLP and automation for best results. You can leverage our best practices to not only get the questions right but to also enable your managers to facilitate employee development at the end of the process. 

If interested, feel free to book a demo today. No initial commitment required.

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