Years ago, I worked for a small company with a great business model, but also an incredible overhead of staff. That is an easy trap to fall into – lots of staff must mean that business is going well, yes? A sign of success. But if you have to many people spending hours on working on tasks that don’t add value to your business in the short or long-run, you will hurt your bottom line.
The company I worked for did not have an HR strategy or somebody that evaluated company goals and priorities and built a team that would work towards these goals. Instead, as soon as work was piling up, somebody was hired without looking at the workload first and assessing on whether there were duties that could be dropped or streamlined. The job descriptions were very cookie cutter: this person did only this and the next person did only that. There was no transparency or fluidity within the team. Clearly, you are a smart team leader that knows that this did not make the best use of the personnel that was already there. The result was a lot of boredom and people waiting on people to finish their work so they could start their own.
The company also had a very rigid hierarchy. There was management, middle management – and the rest. But how do you build your bench or assess what people are capable off if you don’t give them the opportunity to show what they can do? Mentorship, sponsorship and internal progression are vital to ongoing success. After all, you want good people to stay with your company, correct? Especially after you have already invested into them for years.
But even more damaging than the cookie cutter approach and the strict hierarchy was the fact that 50% of people spend 80% or more of their time on tasks that were repetitive and did not add value to the company. If five people touch a bill before AP sends it out to the customer, well – that is at least 3 too many.
This is why performance audits can improve the performance of your team and your bottom line!
A good performance audit has five steps:
1. Job descriptions. Have job descriptions for every employee that clearly specify duties, but also have built-in opportunities for employees to take over more responsibility.
2. Performance evaluations. Evaluate employee’s actual workload and how much time they spend on a certain task. This is incredible informative for business owners and leaders (because really, we know you want the job done without being too involved into details, but do you really want employee XY to spend THAT much time on THAT job?). This is also a great opportunity to discuss with your employees if they are ready to progress, would like to shake things up a bit or if they are happy and content were they are.
3. Reassess. After all the information is collected, it is time to reassess employee’s roles and firm up job descriptions, so they align with company goals and targets. This is where your HR strategy will come into play.
4. Team Building and Leadership coaching are great tools to communicate goals and set teams back on track to achieving them.
5. Review. Depending on your company size and growth rate, your HR strategy should be reviewed at least annually, if not semi-annually.