Let’s face it: Few business owners actually like doing performance reviews. In the midst of running the day-to-day operations of your company, not to mention mapping out your strategy for growth over the next few years, what you really want is for your staff to do their jobs—and to do them well.
That’s an admirable goal, say management consultants, but it won’t happen without some thoughtful guidance from you and—if your company is big enough—your top team. “A performance review is not just about how the employee has done in the past,” says Jaye Smith, president of Breakwater Consulting in New York City. “It’s a look at how he or she can do a better job in the future, and how you, as the boss, can help facilitate that.”
A 2011 Workplace Practices survey by the Society for Human Resource Management shows that more than 90 percent of the companies that responded do, in fact, conduct employee evaluations yearly. The results were statistically the same for both large and small firms. That effort does not go unnoticed by workers. BlessingWhite, a leadership development firm, recently did a global study showing that employees feel that career development and training are among the top drivers of job satisfaction, which often leads to lower turnover and greater productivity.
Getting the most from employee appraisals involves doing a few simple things well. Chief among them: consistency. “Reviews have to be done on a regular basis in order to be useful,” says Smith. She recommends at the beginning of January, (“To set the tone for how you want the rest of the year to unfold,” she says) and then again, perhaps at mid-year as a way to check in and address any little issues before they blossom into bigger problems.
At Local Projects, a New York City-based media design firm for museums and public spaces, studio manager Tiya Gordon says employees get in-person annual performance during their first two years at the company and then on a more informal basis thereafter. “We’re structured in a way that there are high demands on people here in terms of workload,” Gordon says. “We want to make sure during those first two years that we’re happy and the employee is happy with how the company is run and what is expected of them. If things are going smoothly after two years, the conversations happen more casually and usually revolve around the future and salary increases.”
With the exception of the senior management and the owner of the company, Gordon does all the performance reviews. She carves out about 90 minutes for each and prefers to start by asking what she and the company can do to make that employee’s job easier. “Sometimes it’s something simple like getting help from an intern or upgrades on equipment on a more frequent basis,” she explains. Other requests, she laughs, are not so easy to accommodate. “Taking the staff and their families on annual retreats is not really in the budget, but I’ve had someone ask for that, too,” she says.
It’s important to document what takes place during an employee’s evaluation, but that doesn’t have to mean reams of paperwork as a result. If the process becomes too burdensome, with complex forms to be filled out, the inclination is often to skip the reviews altogether, says Smith. “For a small business owner without an HR department, this can become overwhelming,” she says.
It doesn’t have to be. On one or two sheets of paper, she recommends outlining the most important questions to cover:
- What do you feel is working well in your job?
- Where do you feel improvements can be made?
- Are there challenges in your way that I (as the small business owner) can help alleviate?
- What would you like to accomplish in the next year?
If an employee’s performance is lacking or causing turmoil among colleagues, it’s crucial to address these concerns head-on. “Nothing that’s said at a performance review should come as a shock to the employee,” Smith says. If there are problems with a worker, they should be addressed as they occur throughout the year and not just at review time.
Andrina Bigelow, CEO of Fran’s Chocolates, a Seattle, Washington-based mail order and retail business started by her mother in 1982, says she “dives right in,” if there are problems to discuss during a performance review. “It has to be clear from the beginning what the expectations are of the individual,” she says, noting that Fran’s has 65 employees. “If there’s a disconnect between those expectations and the performance, then you’re doing them a disserve by not being upfront about it.”
For employees who are new to the company, a little more guidance is often all that’s needed to turn around a situation, Bigelow says. If problems arise with an employee who’s been with the company for a number of years, that’s often harder to resolve. In those cases she’ll meet with an employee on an informal basis to discuss the performance issue and ways that it can be improved. “These conversations are never easy,” Bigelow notes, but the alternative is no better. “Not discussing the problem just means it can get worse,” she says. “The only way to make progress is to identify what’s not working and then look for ways to fix it.”
- Inc. magazine has a Performance Review Template that can be downloaded. The template is customizable and includes sections on job-related skills, problem-solving, and managerial abilities.
- The Society for Human Resource Management offers members a tool kit, including sample policies and forms.
- Check out the Small Business Administration for the nearest small business development centers. They can refer you to a local HR consultant who can offer guidance in starting employee reviews or formalizing existing ones.
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