6 Components of a Well-Designed Performance Management System

Are you on track to reach your restaurant’s goals? Do you have a system in place to help you and your staff reach them? If you answered “No,” a solid performance management system can make your job much, much easier.

What is a Performance Management System?

A performance management system is defined as “a proactive system of managing employee performance for driving individuals and organizations towards desired performance and results.”

Yowza. That sounds complicated, doesn’t it? It’s really not though.

Simply put, it’s a system to manage the performance of a company and its people. That sounds a lot easier and you’re probably already doing some of the steps without knowing it.

But when we speak with operators about “performance management,” they’re reluctant to jump on the bandwagon. They envision spending hours on end at their desk, tracking metrics and writing up employee performance reviews. While those are certainly pieces of the puzzle, a well-oiled PM system doesn’t mean more work on your plate.

In fact, it should actually mean less because everyone will be on the same page. Plus, the positive benefits for everyone are too good to pass up.

Performance Management Goals

The goal of a PM system is simple: Ensure that everyone – management, staff, the company as a whole – is working together to meet overall operational and company performance goals.

We want your restaurant, people, operations, and financials to complement each other – which means the resulting synergy actually propels you towards your goals!

But how in the world do you make that happen?

Steps to a Solid Performance Management System

Well, there are six components you should focus on to develop a system that will work within your own four walls.

1. Understanding the expectations.

I’m sure we can all agree that communication and clear expectations are important. And that’s the first step in implementing a functional PM system.

When instructing employees, make sure you express your expectations clearly and confirm they’ve understood the message. Aim for consistent, positive and constructive feedback too.

2. Performance reviews.

Performance reviews measure how your employees are responding to your direction. If you’ve been clear in your expectations AND employees are understanding the message AND you’ve hired staff that match your culture, these reviews will be much simpler than what you’re used to.

If you find the reviews aren’t going well, it may be an indication that your team isn’t understanding their individual roles. You may need to restate expectations and offer more guidance on how to be the best teammate possible.

3. Teach and coach.

That’s where teaching and coaching come in. All of us lose our way from time to time, so coming alongside your staff, opening those lines of communication, and putting in the time with them will pay dividends.

“Coaching is the universal language of change and learning.” – CNN

Five extra minutes of coaching may be all it takes, but the encouragement and support will stay with your staff much longer.

4. Reward and recognition.

What are you doing now to make your team look forward to coming to work tomorrow? Are you developing a fun, engaging culture that keeps your employees motivated?

Sometimes operators fall into the trap of thinking that rewards and recognitions have to be costly. They don’t.

When a teammate reaches a pre-determined goal – perhaps they upsold the “today’s special” entrée ten times during their shift – they should be rewarded. You could write a quick note to thank them and also recognize them during the weekly staff meeting. Quick, simple, and only costs you a bit of time.

Extravagant rewards aren’t necessary. You’ll find authentic appreciation is valued much more.

5. Improvement plans/check ins.

Check in with staff periodically to see how things are going. Ask do they:

  • Understand your expectations?
  • Have input about the reward and recognition programs you’ve put into place?
  • Have any other suggestions to help the restaurant reach its goals?

This step can be tricky and used for ill intentions. Unfortunately, we see this tool sometimes used for the purpose of “documenting problems” so it can be used to “get someone out.”

So please make sure to keep positive and use this process for what it was designed – for continued self-development for you and your staff.

6. Corrective Action.

Employee discipline can be difficult to administer. With all of the laws in place, operators sometimes feel like their hands are tied.

Using a corrective action form can help ease those anxieties and provide supporting documentation to meet legal requirements.

And remember, corrective action should be a “last resorts” measure. By the time you get to this step, you’ll have exhausted all other methods, including mentoring, coaching, and development plans.

Watch for more information regarding corrective action, recognition programs, and employee performance reviews in future posts. If you have questions you’d like us to address about these topics, please don’t hesitate to email us or leave them in the comments.


Carrie Luxem is the founder and President of Restaurant HR Group, a full-service HR group based in Chicago, IL. Carrie will be sharing her wisdom from over 15 years in restaurant human resources through guest-posts on the Homebase blog.

Want some HR help? Homebase and Restaurant HR Group have partnered to provide free HR resources for restaurants and retailers. You can find them here.

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