Are performance appraisals panning out more like a once-or-twice-a-year awkward conversation with an employee? Or are they a vital staff development tool?
The employee review process is a very ingrained part of larger organizations’ operations. Human resource department staff mark them on calendars and provide encouragement to do them—offering reminders when they are late, nagging if they aren’t completed. But what’s a small-business owner to do? You barely have enough hours in your week to run your store. When are you going to find time to sit down and navigate a form (one that probably doesn’t fit your business very well)?
In my 20-year academic career of teaching management (and my 30-plus-year business career of performing it), I’ve come to believe that small business does some aspects of performance appraisals much better than its larger counterparts.
3 employee appraisal keys
1. Do not surprise.
An important aspect of a good appraisal is that nothing discussed by the manager should be a surprise to the employee. Nothing. If you surprise a staff member during an appraisal meeting, you have not communicated well in the weeks or months leading up to the meeting.
2. Offer recognition.
You shouldn’t hold back on praise or congratulations for a job well done. Share them with as many people as possible as they occur. Handshakes, hugs and high fives don’t store well. Give them out as they are earned!
3. Correct in timely fashion.
If a reprimand is earned, do so as soon as possible. If an employee demonstrates behavior that is not appropriate, why wait a matter of months before addressing it? (If this is true in a large organization, how much more true is it in a smaller one where each employee makes a bigger difference?) Immediacy, as with praise, is key. However, unlike with praise, give reprimands in private. No one else needs to be privy to this discussion.
Following through with the review
On the immediacy front, small business does very well. However, there still needs to be a time each year, or very six months, when you sit down with each staff member and review the high points and low points of his performance since the last time you had one of these discussions. This reviewing helps solidify the prior period in both of your minds. From there, set performance goals for the upcoming time period.
You don’t need a special form to do this, but you do need consistency. You may be able to find a form online that works for your needs; or you can create your own by listing the key points on which you want to evaluate staff. Whatever you use, don’t change measurement criteria very often. I was once involved with an organization that changed its performance evaluation metrics every single year. It had a formal scale with what you were measured on and the scale used to do the measurement standardized by corporate HR. Not a bad thing, but the scale and measurements changed every year, so if you went back over your ratings, it was impossible to tell if you were performing well or not. While the changes were probably well-intended, they kept the system from doing its job: giving useful feedback to the staff.
Another benefit to having a formal, written performance appraisal system is that you can use it as an objective system for determining raises, promotions, etc. When someone is going to be earning additional pay or taking on greater responsibility, you want to be sure that these changes are earned. When you make these changes, tie them to goals, clearly stating the performance you would like going forward.
What tools or systems have you developed in your store to help evaluate the performance of your employees? What has achieved the best results for you?