Performance Management: Setting Goals and Reviewing Them Fairly

The absence of those three is what produces surprises: an employee dismissed while believing they were doing well, or an excellent employee leaving because they never felt anyone noticed.

1. Start with clarity, not evaluation

For each person, write:
- Three to five outcomes expected for the quarter, measurable or verifiable.
- One or two metrics tracked regularly.
- Decision boundaries: what they decide alone, and what needs review.

Clarity on these three prevents most performance problems before they arise. Much of what gets diagnosed as "underperformance" is in fact ambiguity in expectations.

2. Continuous feedback

• A regular one-to-one, short and consistent — weekly or fortnightly. Consistency matters more than length.
• Immediate feedback at the moment, not deferred to the quarterly review. A note delivered three months later loses its corrective value.
• A specific form: the situation, the observable behaviour, and the effect. "In yesterday's meeting you interrupted the customer twice, so we didn't hear their core objection" — not "your communication needs work."
• The positive with equal specificity. "Great work" teaches no one what to repeat.

3. The periodic review

Quarterly is enough in a small company, with a simple agenda:

• What was achieved against what was agreed.
• What wasn't, and why — explicitly distinguishing what belongs to the person from what belongs to circumstances or unclear expectations.
• What they need to perform better: a skill, a tool, clarity, or an obstacle removed.
• Goals for the coming quarter.

Separate the performance conversation from the salary conversation by a meaningful interval. Combining them makes the employee listen to the numbers rather than the feedback.

4. Addressing underperformance

• Diagnose the cause first: is it a skill gap, unclear expectations, an organisational obstacle, poor role fit, or a temporary personal issue? Each cause has an entirely different remedy.
• Be direct early. Polite hinting doesn't land, and it makes the later surprise harsher.
• A time-bound plan with clear outputs and genuine support.
• Document every step — in fairness to both parties and to satisfy statutory requirements.
• If there's no improvement, end it fairly and respectfully, in accordance with the Labour Law. Retaining poor performance costs the whole team and sends a message about your standards.

5. Retaining talent

Far cheaper than hiring. What keeps good people:

• Real growth: wider responsibility and new skills.
• Specific recognition, not general praise.
• A good manager — the leading reason for departure in most research isn't salary.
• Clarity about direction and the company's position.
• Fairness in compensation relative to internal peers and the market.

Review salaries periodically on your own initiative. Waiting until an employee arrives with an outside offer addresses the individual case and corrupts internal fairness — and teaches everyone else that the only route to a raise is threatening to leave.

6. On departure

• A candid exit interview, read for recurring patterns rather than individual grievances.
• An orderly exit: documented handover, access revocation, and knowledge transfer.
• A respectful separation. Today's leaver may be tomorrow's customer, candidate, or referral source.

Common mistakes

• Vague goals followed by blame for not meeting them.
• Deferring feedback to the periodic review.
• Merging performance and salary conversations.
• Avoiding the difficult conversation until the remedy becomes an abrupt termination.
• Diagnosing every weakness as a skill gap without examining ambiguity and obstacles.
• Neglecting salary review until an outside offer arrives.
• No documentation in underperformance cases.

Checklist

• Three to five quarterly outcomes per person
• Clear decision boundaries
• A regular one-to-one
• Immediate, specific feedback
• A quarterly review with a fixed agenda
• Performance separated from salary conversations
• Cause of underperformance diagnosed before remedy
• A documented, time-bound improvement plan
• Periodic salary review on company initiative
• Exit interviews read for patterns

FAQ

Do I need a formal appraisal system?
Not early on. Clarity, regular one-to-ones, and a quarterly review are enough until the company grows.

How long before judging a new employee?
At least one full cycle of their work, with a 30-day review to correct course early.

How do I handle high performance with poor behaviour?
Address it explicitly and quickly. Ignoring it invalidates your declared standards in front of the whole team.