Contributed by Independent Bank
Small and mid-sized businesses vary widely in their approach to performance reviews. If you conduct them, you likely see them as a way to help employees understand how to improve the way they work for you. Conducting reviews can actually also help improve your business as a whole as well. Rather than go through them as a rote exercise, focus your review efforts to find ways to lift your company to the next level.
Analyze Employee Performance
The most obvious way that reviews can help is to give your team ways to improve what they do. The danger, though, comes when you lock individual performance into a vacuum. If you fail to place employee performance in the context of your organizational goals, you miss an opportunity for both that employee and your company. But by building and nurturing that context, you give yourself opportunity to identify gaps in the way you do business.
The key to all of this is planning. Give your employees actionable goals at the beginning of the review period, and make sure you relate those goals—in both your mind and theirs—to what you hope to achieve for your business. Then, when you conduct your performance reviews, work with the employees to place their strengths and weaknesses back in that context. This helps everyone operate as a team, rather than strictly a worker and overseer relationship.
Performance Reviews as a Two-Way Street
As part of this relationship, you should take care to ensure that your reviews are not just something you impose on your employees. You start by discussing with team members what their goals should be. Make this a conversation—if you listen as well as talk, you empower your employees to make suggestions that can improve not only what they do, but how it all fits with your business.
Similarly, when you reach the review itself, discuss with each employee what he or she feels can be done better—both by that employee and by your company. Your team works on the ground and sees the positive and negative of your company at a level of detail you cannot always see. If the employee feels you are missing opportunities or failing either your team or your customers in some way, listen. Engaged employees perform better and stay longer, but just as importantly, they see what you can do better. Approach this with an open mind, and think about what you can do differently.
Follow-Up Matters
Finally, make sure that neither your performance reviews nor your focus on results ends at the close of the review cycle. When employees see no changes emerge from the process, they understandably lose motivation to perform well or to make suggestions. Go in with a plan in every appraisal, whether this involves rewards, discipline, or structural and procedural changes. Discuss the plan and the reasons for it with the employee, and follow through.
Again, this pushes beyond the level of the individual employee. When you identify weaknesses in your business or ways you can improve, follow through, and do so in a way that is visible to your team. When your employees and your review process operate as mechanisms for introspection and improvement, you give yourself opportunity to recognize and improve on your own flaws, and improve what you do every day.