Monthly Archives: June 2016

Tips to Create an Employee Performance Improvement Plan

Sooner or later, every manager is going to face a situation where a team member isn’t performing well. This person may be slacking off, or simply failing to complete his or her basic job duties week after week. Either way, it’s frustrating for the whole team, especially if the situation impedes the progress of the group.

But firing this employee may not be the answer just yet. Gerry David, CEO of beverage company Celsius Holdings, said it’s important to try to get to the bottom of why the employee is underperforming — it may turn out not to be his or her fault, he said.

“There can be many good reasons for an employee to not meet expectations, and only through good communication with the employee will you have a chance to correct the shortfall,” David said. “You, as the employer, may learn of deficiencies within your corporate expectations and management system.”

If, after this conversation, the employee is still missing the mark, it may be time for a more impactful approach. One commonly used tactic is the performance improvement plan (PIP), a formal agreement outlining the employee’s goals and what he or she can do to meet them more effectively. Not all organizations use PIPs, but those that do often use them as a wakeup call for the underperforming team member: Continued failure to live up to expectations after the PIP could result in termination. [See Related Story: Should I Fire an Underperforming Employee?]

Of course, a PIP is not your only option. If your organization is exceptionally good at ongoing feedback, you may not need to use one at all. Lisa Sterling, EVP and chief people officer of human capital management technology company Ceridian, said her company favors constant coaching and learning opportunities over PIPs.

“We have found PIPs to be used as a way for managers to communicate difficult feedback,” Sterling said. “If you train your leaders to provide ongoing feedback and deal with performance issues as they arise, the need for a PIP is gone.”

However, in some cases, a PIP is the best course of action to help get an employee back on track. If you decide to implement one for one of your staff members, here’s what you need to know about making it fair and beneficial for both parties.

Developing the plan
A good PIP should include four key elements, said Clarissa Cyrus, senior business HR partner at human resources software company SilkRoad:

The performance deficiencies.
Measurable improvement expectations.
A reasonable, appropriate time frame for the employee to improve his or her performance.
Detailed consequences of continued underperformance.
It’s critical to document absolutely everything, every step of the way, and get the employee to sign off on the plan in case the end result is termination. As the manager, you should check in with your HR business partner to make sure the plan meets company criteria and the language used in the plan is appropriate to the situation, Cyrus said.

Sterling reminded employers that having the necessary documentation, taking the appropriate steps and getting the individual engaged doesn’t necessarily protect you from a lawsuit, but it will help mitigate any wrongful-termination claims the employee may try to make after the fact.

Part 1: Cite objective instances of performance issues
If you’ve reached a point where you feel a PIP is necessary, it’s likely that you’ve already given plenty of informal feedback to your employee about what he or she is doing wrong. Sterling noted that documentation of this feedback is important, as well as whether or not the individual was given ample time to improve. She also emphasized the need for unbiased, objective feedback, which may include validation from other managers, colleagues or peers.

Similarly, Cyrus said your personal feelings about the employee must remain separate from anything that goes into the PIP.

“It’s human nature for managers to become frustrated with an employee who is failing to reach [his or her] performance potential,” Cyrus said. “As difficult as it may seem, they must keep personal feelings or frustrations from affecting their evaluation of the employee’s performance.”

Managers should understand that PIPs should never be used to address behavioral issues like poor attendance or inappropriate communications, said Jennifer Lasater, vice president of employer and career services at Kaplan University. Instead, the issues documented in the PIP should be related to skills or knowledge the employee is lacking, or specific job functions he or she is not completing properly on a regular basis.

“Stay away from [phrases] like, ‘you always,'” Lasater added. “Instead state [facts, such as], ‘reports are due at 10 am on Monday and on X date, you did not submit a report.'”

Part 2: Provide clear expectations, actions and metrics for improvement
Once you’ve stated the employee’s performance problems, you should work with the employee to develop a plan of action that encompasses training (if necessary) and clear benchmarks to meet. Decide what tasks should be accomplished and how to best measure them. Lasater noted that creating this plan together with the employee in question will ensure understanding and create commitment on the employee’s part.

Cyrus said the PIP should identify any internal resources available to assist the employee in meeting his or her performance goals (training programs, mentoring, etc.). She also said the expectations set forth in the plan should be consistent with the company’s policies and past practices.

“Managers must ensure that performance expectations and goals are appropriate, and their method for measuring improvement is fair and consistent with similar situations,” Cyrus said.

Part 3: Determine a reasonable time frame for the plan
Most PIPs are measured in increments between 30 and 90 days. The appropriate time frame to make the agreed-upon improvements depends on the employee’s job duties and the nature of your business, David said. It’s important to consider the surrounding circumstances and what improvements you’re asking the employee to make when deciding on a fair and reasonable period.

“If you are selling nuclear power plants, 30 days may not be enough time to have a meaningful outcome. If you are a clerk in the mail room, 30 days may be more than enough time,” David told Business News Daily. “Each situation is different and must be structured fairly.”

You should also establish certain points throughout the plan to check in with the employee about his or her progress, Lasater said. If the employee is not meeting the criteria specifically mentioned in the plan, this should be discussed with the employee during the check-in meetings, she said.

“Give specific information on how often the manager and employee will meet to discuss the employee’s progress while on the performance improvement plan,” she said. “It’s important for the manager to stick to the plan. The manager’s commitment to meeting with the employee on a regular basis emphasizes to the employee that the manager is committed to the [his or her] improvement.”

Part 4: Outline the consequences
Your PIP must be crystal clear on what happens if the set expectations aren’t met. This may be a loss of certain privileges, temporary job suspension or, as is most common, termination of employment.

While the employee does need to understand the gravity of the situation, focusing too heavily on the negative consequences will only further discourage and demotivate him or her. Instead, David said your employee should understand that you are implementing the plan because you are genuinely invested in his or her success at the company.

“Make it clear that your intent is that through this process, they will be able to be a part of the team going forward,” he told Business News Daily. “The PIP has to be specific and allow for a reasonable chance for success.”

Next steps: Should the employee be let go?
If, at the end of the PIP period, the employee has successfully met the plan’s expectations, move forward and continue to make him or her feel like a valued member of the team. David reminded managers to keep the lines of communication open, and advised scheduling a follow-up meeting to ensure that the employee is still performing at satisfactory levels.

However, if the employee has still not made any marked improvements (or has only gotten worse), you may be faced with the difficult decision of letting him or her go. Before any dismissal, you should discuss the progress that was made or not made by the employee with HR, and review the plan documentation to make sure it supports a “for cause” termination, Cyrus said.

“The decision will become clearer to the manager and should not be a surprise to the employee,” Lasater added.

If it is determined that termination is the right answer, David noted that your decision must be final and agreed upon by management and HR.

“If you did your job properly as a manager in the development of the PIP, you must be prepared to abide by what consequences were defined in the PIP for failure,” he said.

It’s never easy to fire someone, especially if you have a good personal relationship with that person. However, by completing a PIP, you offered the employee assistance in improving and gave him or her the opportunity to course-correct. For the good of the organization, you must let the employee go, and hopefully gain some insights about how to prevent similar issues with existing and future employees.

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Tips to Give Better Employee Performance Reviews

xccConducting regular performance reviews is an important and constructive way to evaluate the contributions an employee is making to the company. But the traditional practice of sitting down once or twice a year to discuss what an employee has done well and needs to improve on simply isn’t cutting it anymore.

In a recent study, employee engagement company TINYpulse polled over 1,000 professionals to find out what they thought about their reviews. The results showed that employees are generally dissatisfied with traditional performance reviews: 37 percent said they think the process is outdated, and 42 percent said they think managers leave important elements out of their review due to bias. Nearly a quarter of respondents even said they “feared” their performance review, especially those in the millennial generation.

“Traditional annual performance reviews are inadequate,” said Matt Hulett, chief product officer of TINYpulse. “They’re biased towards recent work, goals aren’t communicated clearly, there’s misalignment in objectives between organizations and employees, and quite simply, the whole process just takes too long. With more and more … workers wanting change, the time for a performance review system upgrade is now.”

In a recent article for The Washington Post, Cliff Stevenson, a senior recent analyst for the Institute for Corporate Productivity, said that, to date, nearly 10 percent of Fortune 500 companies have done away with annual employee performance reviews. Many large companies — such as The Gap, Adobe, Costco, GE and Microsoft, to name a few — have scrapped their traditional review programs in favor of systems that incorporate newer technology and immediate feedback to employees after assignments while still maintaining documentation of performance.

1. Embrace technology. There is an increasing trend in the development and use of employee engagement apps, such as TINYpulse, Impraise and Workday. These apps give employees and managers a chance to communicate regarding assignments daily, tracking progress, providing feedback and incorporating other business aspects so that each member of the team is on track and on the same page.

2. Institute performance-related pay increases. Sixty-four percent of the people polled by TINYpulse wanted pay increases tied to their performance reviews. Consider quarterly bonuses or increases to positively reinforce good work as well as the employee’s confidence that you value him or her as both an individual and a contributor.

3. Make reviews more frequent. With immediate feedback provided on social media sites like Facebook, people are increasingly used to hearing the good and bad on our thoughts and actions in real time. TINYpulse found that employees are in favor of more frequent reviews, so consider conducting evaluations at key milestones, such as at the end of a major project, or quarterly. These meetings do not have to be long, but they should highlight the highs and lows of the project or time frame. Such reviews give managers a chance to stay engaged with their direct reports, and also provide an opportunity for continuous improvement by receiving feedback from the employee on what could be improved for the next cycle.

“If you put this new generation in the box of the performance management we’ve used the last 30 years, you lose them,” Accenture CEO Pierre Nanterme told The Washington Post. “People want to know on an ongoing basis, ‘Am I doing right? Am I moving in the right direction? Do you think I’m progressing?’ Nobody’s going to wait for an annual cycle to get that feedback.”

Initiating informal performance reviews
When giving informal feedback, managers should avoid general comments, such as “nice work” or “good job,” said Brigette McInnis-Day, executive vice president of human resources at SAP. Instead, they should cite specific examples, such as “Great job leading that meeting,” so the employee knows exactly what behaviors to repeat or change in the future, she said.

Another way to provide ongoing feedback to employees is by collecting and sharing a “crowdsourced” review from other staff members, said Eric Mosley, CEO and co-founder of employee recognition and rewards solution Globoforce. The results of the TINYpulse survey support that suggestion, finding that more than a quarter of respondents would like to have co-workers involved in the review process.

“Managers should crowdsource reviews about an employee’s work from their entire staff, so they can get a complete and accurate picture of an employee’s performance throughout the entire year,” Mosley said. “It provides constant feedback to both individuals and their managers, while informing the community at large of progress. It harnesses the wisdom of the crowds to give accurate and specific feedback on individual performance, and it will harness the power of data analysis to connect performance to profits. More than anything, it continuously drives company behavior toward a deliberate, strategic culture.”

Written evaluations: Why words matter
Written feedback is an important component of performance evaluations, but many managers find it difficult to complete this task effectively. If positive comments aren’t phrased well, they can sound trite and insincere, and any suggestions for improvement might sound too critical.

Richard Grote, author of “How to Be Good at Performance Appraisals” (Harvard Business Review Press, 2011), said that instead of using terms such as “good” or “excellent” in a review, employers should opt for more measurement-oriented language. In an interview with, Grote noted that action words — such as “excels,” “exhibits,” “demonstrates,” “grasps,” “generates,” “manages,” “possesses,” “communicates,” “monitors,” “directs” and “achieves” — are more meaningful.

Ken Lloyd, author of “Performance Appraisals & Phrases for Dummies” (For Dummies, 2009), offered a range of words and phrases managers could use for each type of employee responsibility:

Quality and quantity of work: accuracy, thoroughness, productivity and goal attainment
Communication and interpersonal skills: teamwork, cooperation, listening, persuasion and empathy
Planning, administration and organization: goal setting, prioritizing and profit orientation
Leadership: accessibility, responsiveness, decisiveness, collaboration and delegating
Job knowledge and expertise: knowledge base, training, mentoring, modeling and researching
Attitude: dedication, loyalty, reliability, flexibility, initiative, energy and volunteering
Ethics: diversity, sustainability, honesty, integrity, fairness and professionalism
Creative thinking: innovation, receptiveness, problem solving and originality
Self-development and growth: learning, education, advancement, skill building and career planning

Lest Learn About Accounting

Accounting is vital to a strong company, keeping track of the business’s finances and its continued profitability. Without accounting, a business owner would not know what money was coming in or going out, or how to plan for the future. The actions taken by accounting professionals — from bookkeepers to certified public accountants (CPAs) — make it possible to monitor the company’s financial status and provide reports and projections that affect the organization’s decisions.

What do accountants do?
The American Accounting Association defines accounting as “the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.” This is often done by logging a business’s accounts payable, accounts receivable and other financial transactions, typically using accounting software.

While bookkeepers tend to focus on the details, recording transactions in an efficient and organized manner, they may or may not see the overall picture like accountants do, said CPA Stan Snyder.
“Accountants use the work done by bookkeepers to produce and analyze financial reports,” Snyder said. “Although accounting follows the same principles and rules as bookkeeping, an accountant can design a system that will capture all of the details necessary to satisfy the needs of the business — managerial, financial reporting, projection, analysis and tax reporting.”

One part of accounting focuses on presenting the company’s financial information in the required ways to those outside of the company. In order to present this information in a format everyone can understand, accountants follow a set of guidelines. In the United States, most accountants abide by the Generally Accepted Accounting Principles. There are different sets of accounting standards for companies that operate overseas, as well as for local and state government entities.

CPA Harold Averkamp said accounts also provide a company’s internal management team with the information it needs to keep the business financially healthy. Some of the information will originate from the recorded transactions, while some will consist of estimates and projections based on various assumptions, he said.

To come up with a company’s status and projections, accountants rely on various formulas. Accounting ratios help uncover conditions and trends that are difficult to find by inspecting individual components that make up the ratio. Accounting ratios are divided into five main categories:

Liquidity ratios measure the liquid assets of the company versus its liabilities.
Profitability ratios measure the organization’s ability to turn a profit after paying expenses.
Leverage ratios measure total debt versus total assets, and gauge equity.
Turnover ratios measure efficiency by comparing the cost of goods sold over a period of time against the amount of inventory that was on hand during that same time.
Market-value ratios measure the company’s economic status compared with others in the industry.
Accounting careers
Many accountants within the industry choose to become CPAs, a title they achieve by passing an exam and getting work experience. According to the Pennsylvania Institute of Certified Public Accountants, CPAs audit financial statements of public and private companies; serve as consultants in many areas, including tax, accounting and financial planning; and are well-respected strategic business advisors and decision-makers. Their roles range from accountants to controllers and from chief financial officers of Fortune 500 companies to advisors for small neighborhood businesses.

According to the University of North Carolina at Wilmington’s Career Center, there are countless other jobs that require accounting proficiency, including auditor, financial investment analyst, claims adjustor, loan administrator, tax lawyer, underwriter and stockbroker.

Best Mobile Marketing Solutions for Small Businesses

Mobile marketing lets businesses get in front of customers on the devices they use the most: their smartphones and tablets. From text messages to push notifications, mobile check-ins, emails and even social media, mobile marketing can help you boost sales by sending coupons, special discounts, announcements and other promotions to highly targeted customers. By reaching out to customers on devices that they take everywhere they go, mobile marketing can work wonders on in-person walk-ins and online shoppers. To help you get started, here are 11 mobile marketing solutions for small business.

1. Yelp for Business
Yelp is more than just a reviews site and go-to app for finding local businesses and deciding where to eat. It’s also a great place to incentivize customers via the Yelp mobile app. For instance, a restaurant can offer free drinks or appetizers, and a medical clinic can offer special discounts on select treatments — all customers have to do is check-in from their phones. The Yelp app also makes it easier for customers to contact you using call-to-action buttons, such the ability to call your business, visit your website or place a mobile order with just one tap. Yelp also lets you create and publish local ads, making it easier for nearby customers to discover your business while searching for ones just like yours. For more information on how to use Yelp for business check out our primer, Yelp: A Small Business Guide.

2. Mozeo
The easiest way to reach customers on their mobile phones is by texting them. Mozeo aims to make texting customers a breeze with its easy to use dashboard and text messaging management system. To connect with your business and agree to receive communication, all customers have to do is text a keyword followed by a unique short code. For instance, Denny’s restaurants had customers text the word “Dennys” to 24587 to receive special deals, and Heineken used the word “USOPEN” to run a national text-2-win contest. In addition to deals and contests, Mozeo can also be used to send text notifications, reminders, verification codes and account alerts (such as when a password has been changed), as well as hold two-way conversations to provide customer support.

6. ScanLife
Another popular form of mobile marketing is using mobile devices to find out more information about a product simply by scanning a bar code or quick-response (QR) code. ScanLife’s Mobile Engagement Platform goes the extra mile by letting customers scan everything from UPC and QR codes to NFC, images, print ads and even actual objects. After scanning, customers are taken directly to websites, videos and other interactive sources. Such technology was once only available to large companies with generous marketing budgets, but ScanLife gives small businesses access to the same high-tech consumer mobile engagement solution on a small business budget.

7. Convertro
Figuring out marketing budgets and gauging returns on investment (ROI) can be challenging for small businesses, particularly when it comes to mobile marketing. Convertro eliminates the guesswork by delivering key insights into mobile ad performance, allowing small business owners to make well-informed mobile marketing decisions. This platform can track all mobile elements on the path to purchase by creating customer profiles, no matter what devices they use to engage with your business. For example, if a prospective customer sees a mobile ad on his or her tablet, sees an ad for the same product on her smartphone two days later and then finally makes the purchase on his or her laptop, Convertro’s cross-device attribution technology accurately determines the impact of the mobile activities toward the final purchase. If small business owners have this information, they can make data-driven decisions on how to shift their ad spending toward the most efficient and profitable channels with the greatest ROI.

Sometimes, what small business owners need is a comprehensive mobile marketing solution. SUMOTEXT is a mobile relationship management platform that offers a wide range of mobile marketing solutions. These include mobile coupons, mobile loyalty programs, mobile wallets, mobile alerts and mobile giving (for donations). SUMOTEXT offers four flexible service options based on your business’s needs: self-service for do-it-yourself campaigns; managed services, including dedicated training, execution and support; hybrid services that combine an account manager and in-house execution; and API for advanced users.

9. Thumbvista
Mobile marketing is all about sending texts and alerts at the right time and place. Thumbvista, a mobile marketing company that specializes in geofencing and location-based messaging, can help. After customers opt in to receive text messages, Thumbvista lets businesses collect specific demographic information and use it as filters to better target consumers — for instance, by gender, age and location. Then, Thumbvista’s geofencing technology lets users set up a “geofence” around the target perimeter — using buildings, blocks, miles and other locations — to trigger where, when and to which customers alerts and text messages should be sent. By letting small businesses tailor their mobile marketing campaigns, Thumbvista lets them create more effective and relevant messages while providing ultimate control over marketing spends and ROI.

10. Foursquare
The beauty of mobile marketing is that customers can also do the work for you. Foursquare, a mobile app that connects people to businesses, engages customers by allowing them to check in, recommend and create conversations about local businesses they visit. Categories include food and coffee, shopping, the arts, nightlife, outdoor activities and more. The app also connects to Facebook for an even wider net of potential and repeat customers. Foursquare has more than 45 million users and 1.5 million registered businesses.

11. MailChimp
Is email marketing part of your marketing strategy? With the majority of mobile users now checking their inboxes on smartphones and tablets, it’s more important than ever to make sure customers can view emails the way they were intended. Email marketing service MailChimp offers mobile-friendly email templates that make emails look good on any device. Users can choose from professionally designed templates or create their own. Spare customers from emails that aren’t formatted correctly for their device, and put the focus on your message instead.