Talent Matters
Performance management: set it, measure it, say it, mean it.
by Bharani Nagarathnam
We have covered many aspects of effective recruitment practices in this column, including employee value propositions (EVP), digital and social recruiting, internship programs, and culture. Once you recruit top talent, it is important to effectively manage them and realize productivity. This is called performance management.
Performance management is the process of creating and sustaining improved performance leading to increased productivity. The first step in managing people is to tell them what to do — that is goal setting. This should include performance metrics that provide role clarity. As the employee performs the job, timely and constructive feedback should be provided, and formal performance evaluations should also be part of the process. Last, building accountability in the team fosters a high-performance culture.
Goal Setting. Goal setting is a process of establishing objectives to be achieved over a period of time. It is the performance criteria by which they will be evaluated. Connecting individual goals to company goals helps provide visibility on how an employee’s work is connected to the company goals and objectives. It adds meaning and purpose to their work. Individual goal setting, especially for sales, can be aligned to the company’s annual planning and goal setting process.
According to SHRM, there are four types of goal setting:
- Job description goals. Goals may be based on the achievement of a pre-established set of job duties from the description.
- Behavioral goals. Goals may be based on certain behaviors. These goals are expected to be accomplished continuously. Behavioral goals are how things need to be accomplished.
- Project goals. Goals may be based on achievement of a project objective. These goals may be set for a single year and changed as projects are completed.
- Stretch goals: Goals that are especially challenging to reach are sometimes referred to as stretch goals.
Metrics. Use key performance indicators (KPIs) and objective and key results (OKRs) to track progress. It is better to set objective metrics such as sales dollars, gross margin percentage, or new accounts rather than subjective or activity-based goals such as number of calls made or number of quotes completed. Behavioral metrics such as timeliness, professionalism, customer service, and teamwork can also be included.
Feedback. Timely and constructive feedback from the manager is the best tool in an employee’s toolbox for achieving their goals and metrics. Providing timely feedback helps reinforce desired behaviors and accountability. Leadership development expert Ken Blanchard said, “Feedback is the breakfast of champions.” According to a PwC survey, 60% of employees reported that they would like feedback on a daily basis – a number that increased to 72% for employees under the age of 30.
Best practices for providing feedback include: (1) Be timely and be specific. (2) Make it a two-way conversation. (3) Link feedback to individual impact and goals. (4) Use it as a teaching moment. (5) Use it as a recognition moment. (6) Keep it professional. (7) Use technology — it doesn’t have to be in-person. (8) Allow anyone in the team to request or provide feedback.
In addition to informal feedback, formal annual evaluations and quarterly check-ins help coach employees and document performance. Make these reviews developmental and provide actionable feedback. Create individualized development plans.
Companies should help managers become better coaches. During formal evaluations, they will encounter difficult conversations, which can become opportunities to discuss a performance improvement plan for employees who aren’t meeting performance goals and metrics. It is important that you either “coach up” or “coach out” employees with performance issues. If you keep a C player on your team for more than a year, it sends a bad signal to the team that C-level performance is acceptable.
Make It Stick. Holding people accountable is one of the more challenging tasks for any manager, especially first-time frontline managers. Developing a structured process for goal setting, establishing achievable metrics, providing quality feedback, doing formal evaluations, as well as coaching, all help establish a high-performance culture that leads to both profitability and employee retention. Improving employee performance is an ongoing process.
I leave you with this quote from former German Chancellor Helmut Schmidt: “The biggest room in the world is the room for improvement.” Let’s help our employees achieve their performance goals.
Dr. Bharani Nagarathnam is an associate professor and director of the Master of Industrial Distribution at the Industrial Distribution Program at Texas A&M University. He is the co-founder of the school's Talent Development Council and works with distributors on talent acquisition, management, development, and retention practices. Connect with him at: https://www.linkedin.com/in/bharanin/
This article originally appeared in the May/June 2026 issue of Industrial Supply magazine. Copyright 2026, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The May/June issue of Industrial Supply magazine features an in-depth cover story about GHX Industrial. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
