Today’s construction companies understand an annual performance review is a thing of the past and for performance management to be effective, it must be ongoing. Regular check-ins with crew members, supervisors and other staff helps improve engagement across the entire company.  

Performance management in construction includes the important task of goal setting, which improves workers’ overall productivity. Employee productivity increases by 56% when managers are involved and when they help to align goals to what the organization’s goals.  

What is Performance Management in Construction? 

Performance management is unlike an annual performance review, which only happens once a year. Performance management is an ongoing, open conversation with your employees. The goal of performance management in construction is to make sure your employees are performing at their best, and to stay on top of any issues that might arise on the job site or in the office. You can’t do that with one conversation a year.  

Performance management is a process that involves several steps or stages and the backing of your entire company. The reward of implementing such a process is having employees who are highly productive and loyal. 

The Process of Performance Management in Construction

The performance management process in construction includes setting expectations, creating objectives and gaining feedback, including 360-degree feedback establishing goals and reviewing the progress of meeting those goals. It also gives employers the opportunity to reward their high achievers.  


The planning stage is where you and your construction employees set goals. Goals should be challenging, rewarding, enthusiastic and daring. Talk to your workers about the workplace performance goals they wish to set. Make goals that include the employee, the division and the company.  

Remember to discuss to the “why” of the goals. Will they drive profits, boost egos or move the employees forward along their career paths?  

It is also important to align the goals with your company’s core competencies. Core competencies are the abilities and advantages of a company that separate it from the competition. In the competitive construction industry, it is essential that your workforce understand these core competencies This will guide them in setting appropriate goals for improving their own behavioral, technical and leadership skills. 

Check In 

Regular one-on-one meetings with your employees are an important part of the performance management process. Employees who receive regular feedback and personal attention are more engaged and committed to their company. The check-in stage gives you the opportunity to coach your employees to help them stay on track or to tell them they’re doing an excellent job.  

Feedback is important for all construction employees. Gallup research has shown regular communication keeps workers engaged. This is essential for construction companies that need to retain current employees to minimize the impact of current worker shortages. One-on-ones should be a two-way street where the manager asks the employees for their feedback. 


Review your employees’ performance against the goals they’ve set. The review stage is where performance management software can make all the difference when tracking your construction employees. When your organization uses performance management software, managers can easily access evaluations and goals to see who is exceeding expectations on the job site or in the office. Your workers can also view their progress as well as task lists and due dates. 


Once goals are reviewed, the next stage is measuring how efficiently the goals were met. Using performance management software, managers can look at completed task lists, track comments and view completion dates. Performance management software not only allows you to track individual goal performance but also to ensure those goals remain aligned with the company. You can create a strategy to fill any gaps in essential roles or skills when looking at which crew members can take on new roles or earn new certifications. Taking all performance data into consideration, you can assign your employees an overall performance score, which can play a huge role in compensation management. 


Once you’ve planned, monitored, reviewed and measured performance, the last step of the process is to determine if a reward or compensation is due. In general, people will work harder if they believe they will lbe rewarded for their efforts. Many construction companies tie performance to pay increases and bonuses. A compensation management system, synced with performance management, allows managers to automate increases and bonuses based on merit. 

Improving Your Performance Management Process 

A performance appraisal doesn’t exist in a bubble. There are times when the process will go smoothly and other times when it will be rocky. Implement these best practices to ensure your process is improving productivity, retention and engagement. 

Create an Outline 

Create an outline before the planning stage. An outline for the first meeting informs both parties about what to expect. It also gives your construction workers a chance to think about the goals they want to develop and any questions to ask their supervisors. 

Set a Plan of Action 

Setting goals is only one part of managing performance. You need to create a plan of action to determine how those goals will be completed. Discuss specific next steps with your employees and make sure everyone is on the same page before the meeting is over. 

Set SMART Goals 

Setting goals with the SMART model is a great way to conduct two-way goal setting between managers and employees. SMART goal setting works well with both smart and long-term goals. SMART goals are Specific, Measurable, Achievable, Results-based and Time-bound. 

  • Specific: Include dates, resources and/or dollar amounts you’ll need to accomplish them. 
  • Measurable: Identify appropriate metrics so employees can track progress and measure success. 
  • Achievable: Make them a stretch, but doable. 
  • Results-based: Align with company strategy by relating to something that is necessary, of value and supports the company’s vision. 
  • Time-bound: Determine a date, timeframe or scheduled completion of the goal. 

Identify High Performers 

It is vital to identify key players in your construction business and performance reviews are the vehicles to do that. Key players are the workers that can step into new roles and grow with your company.  

With more construction workers retiring versus those coming into the field, succession planning is what will keep your labor force healthy. During your performance management process, take the time to give bonuses, raises or even offer promotions to those workers who have been identified as high performing employees. A reward system for top employees is a key component in improving your business’s overall retention rate. 

Keys to Effective Performance Management in Construction

Implementing an effective performance management process takes time but there are some best practices that can help ensure it is a success.  

Enlist the Support of Senior Management 

As with any strategy, process or purchase, having the support of the executive team is essential to its success. Without buy-in from the top, your performance management process won’t succeed. 

Be Fair and Unbiased 

Not every employee/manager relationship is positive. The reality is some co-workers don’t get along. Using 360-feedback to gather multiple opinions about behavior helps the decision-making process come time for promotion or dismissal. 

Have Frank Discussions About Performance 

Performance reviews tend to get a bad rap from employees and managers alike. No one wants to hear bad news or give bad news. But even though conversations about performance need to be objective, they don’t have to be overly critical.  

Reviews shouldn’t be used to point fingers but instead be a frank discussion about the employees’ performance and abilities. It’s best if the critiques you make about performance can be measured or at least be as specific as possible. Consider these examples: 

  • “You clocked in late five times last month.” 
  • “Your productivity is slower than your co-workers, leading to more overtime hours.” 
  • “You lost your temper with another employee two months ago.” 

Don’t “sugar coat” weaknesses with positives and keep any discussions about strengths separate to avoid confusion. 

  • “You are a punctual worker, but your work repeatedly has to be redone by other crew members.” 
  • “I love your enthusiasm, but it can be distracting to your co-workers.” 

Use Performance Management Software 

Performance management software can make all the difference between an effective performance management process and one that just wastes your and your employees’ time.  

Arcoro’s Performance Management Software gives construction companies the ability to effectively implement and manage their performance processes. The cloud-based, mobile-friendly system allows employees to access it any time from anywhere. That means employees can fill out self-evaluation forms from the job site or a desk chair. 

Arcoro HR Performance Management

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