How to Close a Performance Gap in Your Team

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How to Close a Performance Gap in Your Team

A performance gap within your team can have a serious impact on the productivity and performance of the business. That’s why it’s necessary to address performance gaps as early as possible. What causes performance gaps, and how do you close them?

What is a performance gap?
Why are performance gaps harmful to an organization?
What causes performance gaps?
How do you close a performance gap?
Why is it important to track data around performance?

What is a performance gap?

Organizational effectiveness can be dictated by how proficient employees are with managing their tasks and taking on increasing levels of responsibility. Gaps in employee performance prevent your business from living up to its full potential. In a word, a performance gap refers to the difference between the current performance of an individual, team or organization, and desired performance. Performance gaps cause employees to underperform, which then leads to an organization with less than anticipated results.

These gaps originate from many sources, which you can identify by conducting a performance gap analysis. (More on how to do this later.)

What makes performance gaps challenging is that they can manifest in many areas of human resources and may not be immediately obvious. For example, if individuals are trained to perform their tasks by other employees, they may pick up all the “bad habits” of their peers and never learn the correct way of performing their job. This leads to employees falling short of expectations, including performance goals. 

It’s important to understand that no matter the cause of the performance gap, it has a negative impact on the organizational bottom line.

Closing a Performance Gap

Why are performance gaps harmful to an organization?

Performance gaps cause individuals, teams, and organizations to underperform, which leads to loss of revenue and innovation. All of this harms the organization’s bottom line. When employees are consistently unable to reach their performance goals, they begin to disconnect from objectives because they consider them impossible to achieve.

Estimates say that performance gaps cost all US businesses around $2.9 million per day searching for new employees to replace lost ones or those who are no longer productive. Such performance issues don’t happen overnight; they insidiously infiltrate the corporate culture one employee at a time, which eventually leads to team breakdown. Companies with low employee engagement that impacts performance, customer service, and a whole host of other company objectives suffer a 21% potential loss of profits

What causes performance gaps?

The causes of performance gaps can vary from one organization to the next. However, there are some major reasons an organization may start to experience this problem. One thing we learned from the COVID-19 pandemic was that many organizations relaxed their performance expectations to lessen pressure on already stressed-out employees. Now that things are headed in a normal direction, it’s the opportune time to take a look at where your organization is in terms of motivating employees to perform to their best abilities. 

Here’s a rundown of some of the common causes of performance gaps.

  • Poor leadership and processes. If employees do not have clear guidance or if management is inconsistent with requests, they can easily become confused, frustrated, and disengaged from their roles. This, in turn, dwindles individual and team performance.
  • Not setting reasonable expectations. While they mean well, sometimes performance management sets the bar too high for all employees to attain. This demoralizes employees rather than inspires them. Another problem are unclear expectations. When your employees are unsure about what you expect from them, how can they be effective?
  • General lack of motivation and disengagement. While things have settled down a bit since last year, the most recent Gallup poll reveals only around 36% of employees are actively engaged in the US as of June 2021, and 20% are engaged globally. Employees who are disengaged are less likely to care about meeting performance metrics. 
  • Skill and talent gaps. This is a growing problem, even with a lot of people looking for work. With more jobs becoming obsolete and many new roles emerging, it can be a challenge for companies to maintain skill sets and enough talent to cover performance goals. 

How do you close a performance gap? (In 10 steps!) 

You may be asking yourself, “If performance gaps are so damaging, how can I close them and retain high levels of performance from my team?” Once you’ve conducted a gap analysis, you need to start planning how to close them. Here are ten steps that will help reduce the gaps between where your organization stands now and where you want it to be in the near future.

Step 1: Identify causes of productivity reduction

This can include any of the above causes or others specific to your organization. Take the time to review employee performance records from the previous two years. Look for patterns or drops in performance percentages. This may be coming from a single department, a manager, or another source. Conduct a pulse survey to check where the organization is now as part of this review.

Let’s say that you suspect that the performance of employees in a specific department dropped because they have become increasingly disengaged. You can organize an employee focus group or an interview to further dive into why that is.

Step 2: Map the skills that are currently on your team

This data can come from resumes and your organization’s HRIS. Building a skills inventory will also help you get an overview of the skills your employees currently have. Furthermore, employees can self-assess their skills and abilities as part of their new hire survey, or you can simply review current job skill requirements with supervisors.

Step 3: Conduct a performance gap and skills gap analysis

A performance gap addresses the fluctuations in employee performance. It’s based on performance metrics on a team or individual level. A skills gap analysis focuses on assessing the available skills present in the current workforce vs. skills needed in the future as jobs are reorganized or changed. Conducting these analyses will help determine what type of interventions you need to close the gaps.

For example, if the performance of a certain team suffers because of poor management, you might need to train or coach the manager. However, if you find out that the team members simply don’t have a sufficient skill level to do their job, you might decide to implement a targeted training program to improve their skills.

Step 4: Get a targeted training program in place

As we’ve mentioned just above, once you’ve identified which skills and competencies your employees are missing, you can develop targeted training plans to close these gaps. Implementing performance coaching will also help your employees perform better and learn on the job.

Assign learning goals to new hires, but have a structure to what they learn and get feedback on what they think is missing. 

Step 5: Set performance expectations from the first day

Ask your new hires to self-assign some performance goals and create a few more for them at their level so they know what you as the employer expect from them. This will give them a roadmap to success. Provide frequent and constructive feedback to employees. Set specific goals, eliminate barriers, and track progress. Conduct performance reviews at least every quarter.

By continuously reiterating your expectations, you can make sure that your employees know not only what they need to achieve, but also how to get there.

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Step 6: Develop future leaders

Don’t underestimate the importance of succession planning. In order to maintain a strong team, you will need skilled employees to take the lead. With the post-pandemic exodus of employees from the workforce, this is more important than ever before.

Identify employees who have the potential to take on management and leadership roles in the future. Then, work together with them to create customized leadership development plans to prepare them for the step up. That way, you’re ensuring a strong leadership pipeline.

Step 7: Maintain high employee engagement

Employees who are engaged with quality work tasks and a positive environment tend to produce more than others. And don’t forget about your remote workers, who typically produce even more than their in-office counterparts. Engagement is inextricably tied to performance. 

Step 8: Create a rewards and recognition program

According to a study featured on Techjury, 37% of employees consider recognition the most important in boosting productivity. By recognizing the contributions of your workforce and regularly rewarding them, you create a positive workplace where people feel appreciated for their efforts.

Encourage your employees to recognize each other’s achievements. You can do this by implementing a peer recognition program.

Step 9: Keep working on your organizational culture

Your organizational culture has to empower your employees to perform at their best. You need to build an inclusive environment where your employees can truly utilize their skills, competencies, and knowledge.

Step 10: Monitor the progress of performance

There are many resources for keeping track of individual employee progress, team progress, and organizational progress. Some examples include tracking the training results against quality assurance ratings, increased employee retention rates and management results, and improved profits stemming from an effort to recognize employees for their efforts. 

Why is it important to track data around performance?

The only way you will understand if you are headed in the right direction to close performance gaps is to have some concrete data to show this. This data comes from multiple sources, such as the metrics we talk about above, or concrete employee performance metrics. You can gather more data through employee surveys, one-on-one meetings, and focus groups.

The advantage of having data available is that you can demonstrate to decision-makers that the investment in employees is providing a reasonable rate of return. This helps with trying to get future ideas approved. It also lets you know what isn’t working so well to make improvements or changes in your approach. 

Over to you

Performance is critical to the success of your organization and to ensuring a positive experience for all employees. It is vital to have a structured approach to closing a performance gap within your organization, where you determine what you need to do to address it and track your progress until your team performs at the desired level.

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