According to a 2019 study by Gallup, only about 14 percent of employees strongly agree that their performance reviews inspire them to better their time on the clock. Meaning, from an entrepreneur's perspective, there's plenty of room for improvement when it comes to offering your small business' employees a moment to take the temperature on their performance.
Effective evaluations consist of real-time feedback that engages employees and produces better results. So if it's your very first evaluation season as a new entrepreneur, grab your pen and paper. Below, you'll find my top four tips for conducting performance reviews that feel doable and beneficial to all parties involved. (Plus, how to foster a culture of feedback that lasts the whole calendar year.)
1. Make Feedback Part of the Culture, From the Top Down
Communication about performance expectations should begin when you hire an employee and should continue regularly. Your employees will perform best if you articulate what you want from them and guide them on how to get there.
When hiring managers, let them know that communication and feedback are among your priorities, encourage them to understand the value and importance of feedback to your company’s culture, and invest in training resources at the outset of employment to best achieve a trickle-down effect.
Training can take the form of internal dialogue or bringing in a resource to coach your management team. Once they are trained, ensure that managers know they will be reviewed on the timeliness and quality of their feedback.
2. Create a For(u)m for Feedback
Ideally, feedback should be given immediately so an employee can correct or improve the behavior or work product. The easiest way to accomplish this is through email or other digital forms. This serves both the purpose of feedback and creating a record, which can come in handy if disciplinary measures are needed.
There are numerous performance feedback apps that allow self-reflection, managerial, peer, or even customer feedback. Alternatively, companies can develop an internal email template or intranet form so that all feedback touches on the same designated criteria. This cultivates a more objective and systematic approach to evaluations.
3. Define Success
Feedback is best given with measurable goals, whether individual or team-based. For example, you might define success as an on-time or on-budget delivery. If effective performance isn’t calculable by objective measures, create company values in which the employee must be successful and define tasks that exemplify those values.
So, if “customer satisfaction” is a company priority, then timely resolution of customer complaints or high customer satisfaction ratings might be task-oriented successes. The employee needs to know if your metrics aren’t being met, and managers need to know that it’s part of their job to help workers perform at their highest level. The performance feedback forum should double as a performance improvement plan designed for disciplinary or coaching purposes.
4. When You’ve Tried Everything
What happens if an employee just isn’t getting “it,” and the feedback process needs to move to a more formal disciplinary process or termination? The time spent documenting performance deficiencies can help decrease liability when done properly. More frequently, though, I get calls from clients lamenting about a terrible employee they need to fire (always immediately!), and when I ask to see the file, they send over a pile of glowing performance reviews. This undermines the reason for the termination (lack of performance) and makes the employee think they are being let go for a more sinister (or illegal) reason.
To minimize risk and maximize performance, be honest, be timely, and be your employees’ best role model for success.
About Sahara Pynes
Sahara Pynes is an attorney at Fox Rothschild LLP whose practice focuses almost exclusively on minimizing liability against lawsuits through preventative counseling on a range of employment issues. She works directly with business owners and their management teams to enhance company culture and provide practical strategies to manage human resources and risks. Sahara was named one of Angeleno Magazine’s Most Dynamic Women of 2018. If you’re a business owner who doesn’t know what forms to give a new hire, how to properly classify and pay employees/contractors, or just wants to button up their HR issues, reach out to Sahara at SPynes@Foxrothschild.com to see if she can help.