Performance reviews aren’t just for large corporations. Having great performance reviews can help improve employee morale, and increase the efficiency of your small business. Understanding how to conduct better small business performance reviews is beneficial to your management team, and can alleviate any unwanted situations that could result in employees feeling as if they are being treated unfairly. Taking the time to regularly meet with your staff will increase both the levels of accountability and execution in your organization.
Nothing Should Come as a Surprise
When it is time for a performance review, your employees should not be shocked by any of the feedback they receive. That’s just one of the reasons I think waiting a full year between reviews is a bad idea. Every employee should receive comments on their performance QUARTERLY, and any positive or negative attributes they have, or good or bad work should be immediately recognized. Prior to the review, any negative performance or qualities that are unbecoming as an employee should already be known to the employee. As a small business owner, if you find that employees are alarmed by negative feedback, you probably don’t give them feedback on a regular basis, simply increasing the frequency of reviews make this easier to do with employees.
Every employee should be addressed when issues take place, and not bundled all together when it is time for their review. The employees should be fully aware of their behavior and when they have not fulfilled their responsibilities. You should have a list of the dates and times when you spoke to the employee to reiterate what is, and is not tolerated. If these mishaps have been corrected, it should be noted and discussed during the review.
Ensure Employees Understand “How to behave at work” and what are their Responsibilities are
Before an employee is hired in your small business, they should be fully briefed on your company’s core values (“Who” you are in business, the behavioral expectations) and then the expectations for their role. A lack of accountability starts at the very top. When management does not define expectations or hold their team accountable, this quickly trickles down to the rest of the staff. Engaged employees run circles around non- engaged employees, I believe that accountability and engagement are very close cousins. Holding people accountable when their roles are clear is much easier. An employee cannot fully concentrate on doing a great job if they do not know what they are supposed to be doing. When an employee has all the tools they need to succeed and can be held accountable, they can execute, they can win, and they can get engaged.
The small business owner or leader must make sure that the employee has received a copy of their job description, and is crystal clear on their responsibilities (the three to seven things that they “Own” at your company). Consider building an EOS Accountability Chart™ (Like an organizational chart, with a more detailed “what”, not just the “who”). All leaders and managers are responsible for communicating their expectations to their team to ensure that every new hire is briefed on what is fully expected of them.
Also see: The Right Way to Hold People Accountable in Your Organization
Performance Reviews Should NOT be a One-Sided Conversation
The performance review should not only be a venue where the manager gets to speak about the employee. This should be a time when they both can discuss the job performance, how the employee feels about the company, and what areas they think they can improve in. It is the manager’s responsibility to suggest ways they can help the employee succeed. This is the time a manager can get valuable information on their management style, and integrate some of that feedback into how they deal with employees and other staff in the future.
Listen to Your Employees
As a business owner, asking employees for their feedback is critical. It is important to listen to them very carefully and develop a plan to come up with actionable ways to implement their suggestions. Try to talk only 20% of the time, and let them talk 80% of the time. Following up with the employee every few weeks to determine whether or not your efforts have improved things is key. This should not become an opposition match. It is your job to be able to listen and hear constructive criticism while having a discussion on how the employee adds value to your business. Being proactive in your preparation to effectively listen to the employee regardless of what is said strengthens your role as part of the overall management team.
Performance Reviews End with Goal Setting
A good small business owner or leader always ends a performance review by setting goals for both how the employee can improve and how the company is going to improve. The manager should go over the roles and responsibilities and the strategic priorities (Rocks) for the next 90 days, so the employee is 100% on the same page, and laser focused on executing for the next quarter and is not “wondering” how there are doing at work. Once this is accomplished, determining measurable goals and objectives is the next logical step. This demonstrates to the employee you care as a business owner or leader, and will give them something to strive for.
Why is it Important to Set Goals?
1. It provides clarity on what you want to accomplish.
Having clarity of your end goal is important. If you cannot see the vision, you cannot set the goal. Your management team must have a clear view of the vision in order to carry out the objectives of the company. When management has clarity, it can transfer to the other staff members.
2. It gives you drive.
Having drive helps deliver. When things get difficult, drive keeps the employee going no matter what. When employees feel that they have something worthwhile to work toward, drive helps bring it home.
3. Goals help you focus.
Being able to fully focus on what needs to be done and taking the initiative to get it done is important. This helps employees prioritize and remain productive.
4. It makes you accountable.
A goal with a due date helps you remain accountable to what it is you need to accomplish. Without accountability, it is easy to slack off and not take what you have to do seriously. Accountability is a driving force in ensuring a company succeeds.
5. It helps you be the best you can be.
Goals are something to strive for, and when an employee reaches their goals, they are happy and receive inner positive reinforcement.
Is your company struggling to reach its full potential? Is your organization having issues with how the management team operates? Does your team lack accountability or focus? These are all symptoms of an organization that needs and operating system. Contact me to help your organization reach its full potential through a free EOS 90 minute meeting and discover how the Entrepreneurial Operating System can help your business to grow.
The Entrepreneurial Operating System (EOS) was created by Gino Wickman (Author of Traction-get a grip on your business) and is a registered trademark of EOS Worldwide. Chris Hallberg of Traction Inc. is a Certified EOS Implementer ™ that helps business owners and their leadership teams get more of what they want from their business.