Making Performance Appraisals Work For Your Small Business

Wednesday May 5, 2021

Performance appraisals: two words that put fear into both employers and employees alike. Typically, performance appraisals are viewed in a negative light, responsible for both wasting precious time and resources in the average small business.

However, when done right, performance appraisals can be hugely beneficial to both employers and employees. Performance appraisals can align managers and staff, helping build the team and ensuring everyone is working towards a common goal. In a small business, this is invaluable.

Performance appraisals provide your employees with the opportunity to sit down with you, as their manager, to discuss their role in the business, openly and honestly. It’s a chance to acknowledge accomplishments and challenges and establish a clear strategy for achieving future goals.

With that in mind, how can a small-business owner provide a rewarding performance appraisal?

No surprises: Performance appraisals aren’t the time to drop bombshells. As an employer, manager and business owner, don’t “save up” comments and criticisms for this once-a-year review. Instead, address issues as they arise in the workplace. The performance appraisal is an opportunity to look to the future and work towards a common goal, rather than raking over past issues. Move onwards and upwards!

Open the lines of communication: A good performance appraisal is one in which the employee does much of the talking, sharing their achievements, challenges and goals for the future. A good employer will listen, engage and offer constructive feedback.

Identify positive actions: Begin a performance appraisal with positivity. Identify specific examples of positive achievement from your employee. Identify the results of these positive actions. What impact did this have on the business?

Frame criticism in a positive light: Treat mistakes or misjudgments as opportunities to learn and do things better next time. Ask your employee’s perspective and work towards a solution together.

Be open to feedback, both positive and negative: A great employer will take feedback on board, listening to the employee’s challenges and working with them to ensure a positive outcome.

Discuss personal goals: Performance appraisals aren’t solely about employment goals and outcomes. Take this opportunity to find out about your employee’s personal goals, and how you, as a manager, can support these goals.

Discuss career development: Find out about your employee’s goals in the workplace and discuss how these goals can be proactively achieved. Is more training or mentorship required, for instance?

Share company goals: Use the performance appraisal as an opportunity to share your vision for your business, explaining how you see the employee fitting in and making this a reality. This is a golden opportunity to foster teamwork and a sense of camaraderie in the workplace, with everyone working together for a common goal.

Follow up on review outcomes: At the end of the appraisal, send your employee an email, summarising the conversation and goals set. Ask your employee for feedback on the email.

Track progress: An appraisal doesn’t end when after 60 minutes! It’s important that you follow up on the subjects discussed in the appraisal – for instance, if training was discussed, then be sure to implement this.

The best performance appraisals offer positive feedback and advice for improvement, resulting in better relationships between managers and employers, increased job satisfaction and an improved sense of loyalty toward the company. All of these lead to higher productivity among employees, which improves business outcomes.

If you’d like assistance conducting performance appraisals at your small business, get in touch with the HR Dept. We can help!

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