If you keep the low performers in your organization longer than you should, you risk demoralizing the rest of the team, and the performance standard will degrade as long as you don’t rectify the situation. The direct impact is more pronounced. Your business is not getting the value for the low performer’s compensation. The former is not a viable business plan and is a risk to your organization and all other employees’ jobs.

Suppose you keep your high performers on the same level within the organization longer than you should. In that case, you risk your best employees leaving, once again potentially degrading your organization’s performance (and quality) standard.

Managing the performance of both low and high performers is equally important. Unfortunately, many organizations focus only on low-performance management, risking the inability to innovate and move forward in the long run—something you need your high performers for!

The Power of Low Latency Performance Management

Implementing Low Latency Performance Management (LLPM) can prevent the detrimental effects of keeping low performers for too long and losing high performers. LLPM emphasizes a fast feedback loop, allowing managers to address performance issues as they arise. This approach ensures that low performers receive timely feedback and support to improve or transition out of the organization if necessary. Conversely, it helps high performers feel recognized and valued, reducing the risk of them seeking opportunities elsewhere.

By providing immediate feedback, LLPM helps create a culture of continuous improvement. It allows low performers to understand expectations clearly and work on their deficiencies before they become significant issues. For high performers, it offers regular acknowledgment of their contributions and discussions about growth opportunities, keeping them engaged and motivated.

The Risks of Delayed Performance Management

Without timely performance management, organizations can face severe consequences. One of the most significant risks is being forced to make drastic decisions, like laying off a large percentage of employees due to financial strain. These sudden decisions often stem from a lack of proactive performance management, where issues were not addressed early enough to prevent a crisis.

Timely performance management allows for gradual adjustments, ensuring that the organization remains stable and can avoid sudden, sweeping changes that disrupt the entire team. It provides a mechanism for ongoing evaluation and course correction, keeping the organization on a steady path.

Performance Management vs. Performance Review

People often equate performance management and performance reviews. They are not the same. Performance management is an ongoing process of setting expectations, providing feedback, and facilitating employee development. It’s about creating a dialogue between managers and employees that continuously guides performance improvement and career growth.

On the other hand, a performance review is a periodic assessment where performance management outcomes are formally discussed. During a review, there should be no surprises. The manager and the employee should already be aware of the standing, as continuous feedback and discussions would have occurred throughout the performance management process. The review then focuses on planning the next steps in the employee’s career, setting new goals, and identifying further development opportunities.

Conclusion

Low-latency performance Management is essential for maintaining a high-performance standard and ensuring the long-term success of your organization. By addressing performance issues promptly and regularly recognizing high performers, you can foster a motivated, engaged, and productive team. This approach prevents the negative impacts of delayed performance management, enhances employee retention, and drives continuous improvement. Remember, effective performance management is a continuous process, not just a periodic review.

I’m working hard on compiling detailed and actionable steps you can follow and use in your organization in my upcoming book, Efficient Software Development for SMBs, which will be released on November 1st, 2024!