That Damn Performance Review

PROBLEM:

I spent nearly 25 years working in and managing human resources departments, and I never met a person who liked performance reviews- either the boss or the employee.  As a small business owner, do I need them and, if so, how can they be meaningful?

SOLUTION:

First we need to look at the real purpose of a performance review.  It is a communications tool that allows the employee and boss to periodically come together to have a meaningful conversation about “how things are going”.  IT IS NOT A GRADING SYSTEM TO GIVE THE EMPLOYEE A SCORE.  A good system will motivate the boss and the employee to work together toward improved performance.
I suggest you take the employee to lunch or coffee away from the work place and have a free flowing conversation about the job and performance.  It is essential to ask specific open-ended questions:

• Tell me your experiences with the new software.  What can we do to make it work better for you?
• Your communications with Mary in accounting seem to be difficult.  Tell me about that.  What can you do to improve the situation?

It is important for you to take notes and keep them for future reference.
I have seen this type of informal performance review used.  It usually accomplishes the goal of having an open and honest discussion on performance, and it focuses on improving that performance.