Conducting Employee Performance Reviews That Work

Employee performance reviews can help you empower your staff to improve both individually and as a company.

Employee performance reviews offer an opportunity to evaluate your staff and empower them by providing useful feedback. However, it's important to put some thought into this process, or else you may end up with a review that sends the wrong message or simply doesn't provide feedback that is useful to either of you.

Here's what to consider before sitting down for reviews with your team — and how to make these meetings effective.

Set Goals and Communicate Clear Intentions

Why do you want to conduct these reviews? What do you as a small-business owner want your team to achieve? Consider these questions and then outline the areas you want to cover. Employee performance reviews usually include the following:

  • Acknowledgment of good work.
  • Discussion of areas that need improvement.
  • Conversation around how to address those issues: Rather than instructing employees on how they can do better, suggest ways to work together on solving the problems.
  • Decisions around what goals to set — both for the employee as an individual and as a member of a larger team working toward a greater goal. Create goals that are realistic but challenging, and design a plan of action with the employee that allows them to achieve their objectives.

Once you've established your review and goal-setting criteria, communicate it to your team, so everyone knows what the process will entail up front.

Have More Than One Meeting

A lot happens in a year for a small business, and if you only meet for performance reviews annually, you could miss opportunities to improve productivity.

Consider having one-on-one meetings quarterly, so you can review major projects, milestones and issues with employees. This makes employee performance reviews much less overwhelming for everyone involved and leaves your team in a better position to actually act on your feedback and advice throughout the year. It also creates more space for team members to share what they may need from you in order to improve their performance and productivity, from additional training to tools and supplies. 

Remember: One of these meetings, usually in the first quarter, should also outline changes to pay and benefits for that employee. This is another benefit of having quarterly check-ins — when you meet multiple times, your employee has opportunities to communicate without being (understandably) distracted by changes to their paycheck.

Provide Consistent Feedback and Clearly Define Roles

While performance reviews provide one formal setting to give feedback, you should seek to serve as a teacher and mentor to your team at all times. Employees need consistent feedback to continually improve their skills and increase their productivity.

That being said, employees might find it hard to "stay in their lane" and align their objectives with the company's if they don't understand what that lane looks like to begin with. Clearly communicate your expectations of every team member, and work with them to make sure their own priorities line up with the company's.

One of the most important things to remember during the review process is to keep the tone empowering overall. Feedback is important, but constant criticism — even if it's constructive — can wear people down over time. Make sure to recognize employees for improvements they make or goals they accomplish, and acknowledge the value they provide to the company.  "