There are many ways for employers to conduct annual performance reviews. So many, in fact, that owners of small to midsize businesses may find the prospect of implementing a state-of-the-art review process overwhelming.
The simple truth is that smaller companies may not need to exert much effort on a complex approach. Sometimes a simple conversation between supervisor and employee — or even owner and employee — can do the job. As long as mutual understanding is achieved and clear objectives are set.
Remember why annual performance reviews matter
If your commitment to this often-stressful ritual ever falters, remind yourself why it matters. A well-designed performance review process is valuable because it can:
- Provide feedback and counseling to employees about how the company perceives their respective job performances,
- Set objectives for the upcoming year and assist in determining any developmental needs, and
- Create a written record of performance and assist in allocating rewards and opportunities, as well as justifying disciplinary actions or termination.
Conversely, giving annual reviews short shrift by only orally praising or reprimanding an employee leaves a big gap in that worker’s written history. The most secure companies legally document employees’ shortcomings — and achievements — as they occur. They fully discuss performance at least once annually.
Don’t do this!
To ensure your company’s annual reviews are as productive as possible, make sure your supervisors aren’t:
- Winging it. Establish clear standards and procedures for annual reviews. For example, supervisors should prepare for the meetings by filling out the same documentation for every employee.
- Failing to consult others. If a team member works regularly with other departments or outside vendors, his or her supervisor should contact individuals in those other areas for feedback before the review. You can learn some surprising things this way, both good and bad.
- Keeping employees in the dark. Nothing in a performance review should come as a major surprise to an employee. Be sure supervisors are communicating with workers about their performance throughout the year. An employee should know in advance what will be discussed, how much time to set aside for the meeting, and how to prepare for it.
- Failing to follow through. Make sure supervisors identify key objectives for each employee for the coming year. Establishing checkpoints in the months ahead to assess the employee’s progress toward the goals in question is also a good idea.
Put something in place
As a business grows, it may very well need to upgrade and expand its annual performance reviews. But the bottom line is that every company needs to have something in place, no matter how basic, to evaluate and document how well employees are performing. Our firm can help determine how your employees’ performance is affecting profitability and suggest ways to improve productivity cost-effectively.
At Abacus CPAs, our focus is you! We believe that our employees and clients deserve to interact in an environment that fosters growth, trust, and confidence. Our team focuses on tax, accounting, audit, and business consulting to partner with you and your business. Abacus professionals provide leadership by relentlessly pursuing the best guidance possible so those we serve can make smarter decisions.
You can learn more about the topic in this blog by contacting us. We are here and happy to help! Call us today at 417-823-7171, find us on Facebook, LinkedIn, and Twitter, or visit our website to learn more.
Abacus CPAs, LLC | Better Guidance. Smarter Decisions.