December and January have hit UK manufacturing hard with downturns in output, employment rates and new orders. The short-term outlook is not particularly positive either. Whilst facing a near perfect storm of external factors working against the industry, UK manufacturing businesses can look inwards at their workforce and look at how to improve performance and productivity.
Performance management is a fundamental component of business success. However, it’s often approached with trepidation, especially in process-driven sectors such as manufacturing. The fast-paced, repetitive nature of manufacturing operations and the geographical spread of locations can make performance management seem tricky. But … there is a way forward that recognises best practice performance management and manufacturing sector traits.
Clarifying performance management
Almost half of employees (48%) had objectives set for their job – the basic level of performance management. (CIPD, 2023) Only 28% experienced comprehensive performance management involving:
- setting of objectives
- monitoring of objectives
- feedback on the extent to which objectives have been met; and
- accountability for meeting objectives (measured by employees having to explain themselves if objectives were not met).
In the manufacturing sector, comprehensive research links performance management tactics to boosting employee enthusiasm, retention and productivity in the manufacturing sector. (Journal of Administrative and Business Studies, 2023)
So … performance management is a vital process in the manufacturing sector influencing performance and productivity. What’s involved?
Why performance management matters
The manufacturing sector benefits from performance management via:
- Increased productivity (via goal setting and employee support)
- Safer working environment (informed by employees’ feedback)
- Identification of skills and training needs
- Employee recognition for good performance
- Increased employee engagement
- Better employee retention
- Easier recruitment (employer reputation)
Getting performance management right optimises the efforts of your current teams, benefiting employees and the business. Why risk losing employees and implementing expensive, time-consuming recruitment drives if you already have the talent you need?
Performance management ensures you focus on your current employees, using existing skills and experience to deliver better results. Incentivising and motivating existing employees may mean you don’t need to recruit. Happy days!
The bigger picture
A critical success factor in performance management is aligning business and personal goals. This ensures employees understand how their individual work contributes to team and company goals. The process also ensures personal contributions are valued and performance issues recognised. Goal alignment can include:
- Purpose
Frontline workers are usually engaged by understanding how their efforts contribute to the organisation’s goals and success. Nobody likes working in a team when someone is underperforming. This may be a result of training needs, attitude or external circumstances. It’s frustrating when people see colleagues “getting away with it” with no action taken. A robust performance management system captures these situations via the individual’s performance analysis as well as feedback from team members within their own meetings. Importantly, action to resolve the situation should result.
- Employee Benefits
Delving beyond salary to create a range of valued employee benefits truly resonates with employees. 40% of UK workers would choose a job with a lower salary if generous employee benefits were offered. (MetLife UK, 2024) Performance management meetings can offer valuable feedback to determine which benefits are most valued by your organisation’s workers. For example, work-life balance is very important to 51% of employees (Forbes Advisor, 2024). How does your organisation support this? Healthcare? Flexible working? Mental health support?
- Performance-Related Pay
Linking pay with performance motivates employees to try harder and achieve more … to perform better. For many people, it’s the ultimate incentive; we would all like to be rewarded for our hard work.
Short-term schemes reward people for the work they’ve done, growing performance and motivation for regular tasks.
Long-term schemes aim for staff loyalty and retention, involving pay rises or company shares, for example.
Performance-related pay boosts performance and productivity while improving staff motivation and retention. However it must be implemented fairly and prevent unhealthy competition and over-working.
Getting started
One action underpins all aspects of performance management … communication.
Ultimately, employees appreciate being acknowledged; it’s part of our DNA. Performance management enables workers to feel seen and heard. Regular meetings with individual employees (ideally monthly) and annual appraisals are a great starting point. Consistency is key … regular one-to-one meetings should happen regularly, with every employee.
Regular meetings ensure discussions are relevant with proactive outcomes. Conversations are about what’s happening now, not months ago. Too many performance management systems need to be more dynamic, enabling the people involved to deal with current issues. Then, there is a real “in the moment” opportunity to achieve positive change and boost motivation, informed by employees’ feedback and needs.
Looking at the overall performance management process in one go can be overwhelming. The good news … you don’t need to change everything at once. Ask yourself three key questions:
- Do all employees have a job description?
- Are training needs analyses taking place?
- Are development plans created to help employees upskill on the job?
Even if you’ve answered “yes” to all these questions, your performance management systems may need a revamp. Take a step back and ask yourself “Is our performance management system still fit for purpose?”
Now, you have your starting point.
For no-nonsense HR advice and guidance, contact Emma Clack at Heneom HR. Email [email protected] or book in a free, no-obligation 30 minute call here: calendly.com/emma-heneomhr/30mins-introductory-call
To find out more about Heneom HR and what they do, visit www.heneomhr.com
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