Why Performance Reviews Are Critical for Small Businesses

There are certain advantages a small business has that a large multi-national corporation simply cannot, by its very nature, posses. Namely, these are a certain warmth, personality, a sense of being natural… However, perhaps the most important aspect is this – flexibility. Namely, a small business can change, shift, turn. Just compare an elegant mini cooper with a semi.

And for this reason, a small business can utilize performance reviews much better. Namely, performance reviews have gotten a bad rap as being just annoying, bureaucratic by-the-numbers sessions. This is because big companies can’t handle doing this properly, either because of their size, or simply not caring. However, having a small, dedicated team, means that you can do a performance review on a regular basis, and it also means that they have a much greater effect. Below are the reasons why these are just so important.

Time for praise (and error correction)

The entire point of performance reviews are to assess the performance and efficacy of a certain employee. How well did they do their work, how had are they working, how are they handling any pressure that may have been added to their plate.

Performance reviews present a time where you can reward good behaviour, and where bad behaviour can be corrected. Let’s face it, a busy business owner has a lot of thing on his or her mind. This means you simply forget things, even stuff as important as letting some employees know just how good of a job they are doing. It’s a great opportunity to provide some kind of reward as well. It also helps you sit down and see what one person is doing wrong.

Think of this as an opportunity bot to praise and correct your staff, as well as serving as a reminder for you to do so.

 

Helps with goals

Without goals, you are practically rudderless. Goals are something one should strive towards, one should move towards. With proper goals, you know where you are going. In turn, you then know if you’re on the right track or not. With this in mind, think of performance reviews as an opportunity to speak to employees about goals, both theirs, and how they integrate with the goals of the company.

In fact, setting goals is something any company (or for that matter, any individual) should do as soon as possible. By figuring out the goals of an employee, or by helping this person figure them out, you get to see how motivated they are, and how well they can mesh with your company. An ambitious, driven person who wants to start a family in the same town your local business is located in is much more dependable than a person who wants to travel as much as he or she can, without thinking too much into the future. On the other hand, this same vagabondish individual is perfect for positions that require travelling and going out of town.

With this in mind, it helps you figure out why certain people just don’t perform as well as they could, and can help you understand how to get good employees even better.

 

Forces you to reassess

Having performance reviews done regularly helps you take a look at your company, and see where you are right now. It forces you to sit down and analyse what is happening within your company, and how you can improve further on along the way. Perhaps your own leadership skills are not up to snuff, or you may have some other issues you need to attend to.

Juggling too many things at once can make life difficult for any business owner. Getting proper smb management solutions, instead of creating them yourself alone, can help you push forward with your company, and lighting a part of the workload you have. This can make reassessments easier, and make it simpler to integrate performance reviews into your reassessment protocols.

The carrot and the stick

Motivation is obviously important, as we’ve mentioned. But, with regular performance reviews, you can keep some less than stellar employees on their toes, while giving good ones something to look forward to. If they know that you actually care about their performance and intend to review it, both problematic employees and star workers will go the extra mile to give you their all.

And remember, always praise in public, scold in private, if you want to keep your people motivated. Scolding people in public will make your staff be afraid of making mistakes in the future, which will paradoxically lead to mistakes, or will stifle creativity. On the other hand, praising in public boosts morale of an employee even more than if you were to just sit down with them.

Conclusion

Performance reviews are important and useful, especially for small businesses. As a small business, you have a greater impact when dealing with your employees, and can influence them more, both positively and negatively.

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