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. Are you ready for better performance reviews? In this blog post, we are going through annual performance review tips for employers. We are certain after reading this, you will have less anxiety and actually help improve your employees’ performance!

The simple truth is that smaller companies may not need to exert a lot of effort on a complex approach. However, sometimes a simple conversation between supervisor and employee — or even owner and employee — can do the job. This applies, as long as there is a mutual understanding and clear objectives are set.

Remember Why It Matters

If your commitment to this often-stressful ritual ever starts to falter, remind yourself of 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.
• 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 speaking, document employees’ shortcomings — and achievements — as they occur. They fully discuss performance at least once annually.

Performance Review Tips for Employers: 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 stay connected with employees 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. It’s also a good idea to establish checkpoints in the months ahead to assess the employee’s progress toward the goals in question.

Put Something In Place

We hope you find our performance review tips for employers helpful! As a business grows, it may very well need to upgrade and expand its performance evaluation process. However, 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 accounting firm can help determine how your employees’ performance is affecting profitability with a customer profitability analysis. From there, we can suggest ways to cost-effectively improve productivity. Call us today at 847-949-8373 to learn more!