Evaluating Employees

Performance Evaluation Performance Review

As a small business employer, your time is scarce. But your employee performance evaluation/performance review process is important, so we'll tell you how to conduct streamlined (yet meaningful) annual reviews.

Employee performance reviews take time, especially in a small business where the owner is often tasked with evaluating everyone who works for the company.

Given the time constraints many owners face, employee reviews are often delegated to the back burner. Although they still conduct annual employee reviews, the reviews are cursory or inconsequential, at best.

The problem is that performance evaluations and performance reviews count. Study after study has confirmed the fact a high quality labor force is the single most important factor in small business success. So since you can't afford to leave the quality of your workforce to chance, you're going to need to find a way to conduct more meaningful employee performance evaluations.

Standardizing an effective review process can go a long way toward helping you achieve the goal of a quality labor force. If employee reviews are currently a hit or miss activity, here is a streamlined review process that will help you get back on track.

  • Commit to a schedule. The first step in creating a meaningful performance review process involves making a commitment to review all employees on an annual or semi-annual basis. Your commitment should be codified in a written policy and followed religiously - no matter how busy you are.
  • Start with small talk. Performance review meetings usually begin with small talk. You can use this time as an opportunity to strengthen your relationship by learning more about the employee's personal life, family and outside interests.
  • Communicate overall performance. Don't wait until the end of the meeting to reveal the outcome of the review process. If the employee is doing a great job, tell her upfront. If she has room for growth, tell her that, too. If you don't communicate the overall performance rating until the end of the meeting, the employee will be distracted and your conversation will have little value.
  • Discuss growth goals. Using the employee's self-evaluation and other inputs as a basis, discuss the individual's growth goals for the next year while maintaining a positive and encouraging tone.
  • Invite feedback. Exceptional performance evaluations are two-way conversations between an employer and an employee. Invite the individual to offer feedback about his performance and to suggest ways you could improve productivity in the workplace.
  • Document the review. When the review is finished, ask the employee to sign and date the review form. Then give him a copy and keep the original in his personnel file.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities


Business Glossary


Conversation Board

We greatly appreciate any advice you can provide on this topic. Please contribute your insights on this topic so others can benefit.

Leave a Reply

Questions, Comments, Tips, and Advice

Email will not be posted or shared
Code Image - Please contact webmaster if you have problems seeing this image code

Problem Viewing Image? Load New Code