A simple and effective employee performance and appraisal system for small business.

blog Jan 28, 2020

Annual performance reviews and on-going appraisals are usually reserved for medium and large businesses. A small business owner or manager justifies not doing these because ‘margins are tight, we never have enough time as it is to get everything done and besides, people won’t take it seriously.’

Often the truth is more that they don’t know how to do these effectively and/or are afraid of giving their team feedback in case they offend anyone, or stir up a revolt. That is myopic.

With less than a 44 minute investment per week per direct report, a manager can implement a powerful yet simple appraisal system. And quarterly.

Especially as we focus on helping fast growing small businesses recommend you do quarterly reviews, not annual. Your small business’ strategic priorities will change quicker during fast growth. And, we can barely remember what we did a few months ago let alone 11 months prior. A three-monthly cycle allows you to correct a directs’ behaviour faster and get them performing better, sooner.

Here are the bones of it:

  1. define excellent performance upfront. Have a clear job description (JD). 1 hour per quarter
  2. get agreement from the direct. Discuss the job description at the start of the quarter with them and once you have refined it with their feedback, you both sign it to reinforce the commitment you both have to hitting it. 30 minutes per quarter per direct, usually in the weekly one-on-one
  3. support your direct in them nailing their on-going responsibilities and goals for the quarter. Run through the job description, their current professional development (PD) goal and their general progress in the weekly one-on-one. 30 minutes per week per direct
  4. draft up feedback on how their quarter went. Using your notes from your weekly one-on-one’s write a half to one-page quarterly review. 1 hour per quarter per direct:
    • bullet point the main areas of feedback, using the responsibilities and goals on the job description as your anchor (which is why you need to define upfront what excellence looks like in their role)
    • bullet point the areas for improvement they need to focus on next quarter
  5. tailor their next quarters’ professional development goal to help them on areas needing improvement. For example, prescribe learning material they need to undertake during the next three months. 30 minutes per quarter per direct
  6. tailor their next quarters’ job description to have goals helping them on their areas needing improvement. Add any goals that are in alignment with the organisations’ quarterly goals too. 30 minutes per quarter per direct.

That’s 9.5 hours a quarter per direct, including the 30 minutes per week for the one-on-one. Less than 44 minutes per week, per direct.

I can just see managers rolling their eyes and saying “I can barely fit in all I have to do now, than 44 minutes extra per week per direct!”

Think about it this way.
If you have 5 directs, that is an investment of just over 3.5 hours a week. But if you can boost their productivity by 5% that is an extra 2 hours per week, per direct – 10 extra hours per week for your small business. You are actually 6.5 hours per week better off (10 hours more work less the 3.5 hours investment in supporting them). And you have a happier team and a lower risk of employee turnover.

The purpose of quarterly reviews, quarterly job descriptions and professional development is to help the direct perform better and become more effective, as much as it is a tool to force managers to do their jobs of managing people.  

It encourages Managers to provide constant feedback to their directs so they have opportunity and support in changing for the better on-the-go, rather than in one big hit in the annual or quarterly review.

As I like to day, traditional management is by exception – only raise matters when a direct has made a mistake. They are never given positive feedback or recognised for the 10,000 things they got right before that one error. 

This can be demoralising for your team, and managers are missing a trick. By firstly defining what excellent performance looks like then regularly, and constructively, supporting and communicating a directs’ performance, a manager will get more from her team.