“Reviewing” Your Most Valuable Assets
By Steve Meisenheimer

“My people are my most valuable asset.” - Every employer

What if I were to walk into your company and ask the first employee I saw, “Do you know when you ll get your next raise or promotion, and what you can do to ensure it happens?” What response would I get? Most employees don t have a clue.

Why don t employers share their compensation and promotion opportunities with the very people who are helping to build their companies, dedicating their careers to their employer s cause, and in many cases, are family or close friends? In short - it s just human nature. This sort of planning and communication is highly proactive. Yet, it s uncomfortable to confront subordinates and judge them, possibly telling them you need more, better, or different work from them, and then make commitments about their future - especially when the future is so uncertain.

The thought of the performance review is only distasteful because we see only the discomfort and not the benefits. What if you could enjoy all the benefits without any of the discomfort, would you at least consider it? To test the waters, take the following quiz:

Put a check mark before each statement that describes your company.

• Management and employees share identical expectations as to what s needed from them for the company to succeed.
• All employees can clearly describe what s expected of them to be successful in their positions.
• Managers have a plan to train and coach each employee based on their aptitude, professional goals, and personal strengths.
• All employees have goals that are tied to their department s objectives.
• All employees know when their next raise/promotion is coming and what s required to earn it.
• Your employees know the dates in which they will report on their progress.

Wouldn t you agree that if you put a checkmark by all these statements that your company would be more organized, productive, and profitable than another company who couldn t? And don t you agree that these statements would be the natural consequences of a management s willingness to meet and review each person s actual performance against agreed to optimum levels, and then support them in making any corrective actions? Regardless of the many benefits, I have yet to meet a company owner who performs a formal review process. Not because they don t need these benefits, but they couldn t overcome the discomfort of the process. So let s address how one might eliminate any discomfort.

For companies that don t, or can t, get themselves to conduct employee reviews, there are usually two things missing:

1. The “expectation of the review”
2. The “motive for the review”

Expectations

The review must be a natural extension of the hiring, training, goal setting, and monitoring processes. Reviews should be introduced as a normal activity in the hiring phase, while training should introduce the priorities covered in the review. Setting goals and whatever monitoring is done is then compared with what the review will require to be excellent. The result? The review now seems like a logical and necessary feedback tool to close the loop.

Motivation

The leader s motivation must be to have people walk away from their review edified, confident in your motives, comfortable in their positions, excited about the challenge, and determined to do the best possible work they can for the company. Your people skills will grow through this process, but what could be more powerful for a business leader?

The performance review should consist of two equally important steps: preparing for the meeting and conducting the meeting.

Preparing for the review

1. Decide whether you want to tie the review to compensation, bonuses, and/or promotions - or if you want to keep them separate. You must be consistent in your policy.
2. Reference the employee s file for any comments (positive and/or negative) during the reviewed period.
3. Optional: Distribute a 360-degree review form to each person in the employee s sphere (peers, superiors, and subordinates). Ask for insights relating to whatever is valued in the position that others might see such as attitude, skill, speed, proficiency, accuracy.
4. Ask the employee to grade herself in the areas you will be covering. Provide a form with appropriate open-ended questions.
5. Measure the employee s actual performance against your expectations for the position.
6. Go through the job description duties and responsibilities for what is being performed well and what needs improvement.
7. What training has the candidate received, or what professional growth has been observed? Is she performing at the level she indicated she could when she was hired, or that her training should have prepared her for? Identify areas requiring additional attention.
8. Review the goals set for the prior review period. Determine if they were satisfied, and if not, why.
9. Review her overall career plan and her professional goals. Is she on track, ahead, or behind schedule? Identify limiting factors that are holding her up. These could be employee or company limitations.

Conducting the review

1. Review how she graded herself and a summary of the 360-degree evaluations.
2. Reveal your discoveries made during your preparation for the review. Include your ideas only when her ideas are off target, or can t be modified to satisfy your interests as well.
3. Establish new goals for the next period. To be most meaningful, goals should relate to her department s objectives, and must be time-sensitive and measurable.
4. Agree on:
   1. When you will review progress on her new goals, especially if interim evaluations are needed prior to the next review.
   2. What results you will be looking for.
   3. When applicable, the specific criteria her results or progress can be measured against. (Her professional goals are ideal for this. E.g., she might want to grow into a management position.)
   4. What can you and the company do to help her reach her goals.

There is no rule as to how often you should conduct performance reviews, or even that all employees need to be reviewed at the same intervals. How often you perform reviews should be based on how urgent and how big the goals are that you set for your employees.

Your call to action

How valuable to you are those statements that you couldn t check off above? It they are not that significant, this process might not be valuable to you. If they are highly significant to your company getting and remaining competitive, in your attracting and keeping the best talent, and seeing your company achieve its mission and goals - it s time to dive in.

“My people are my most valuable asset” is a common sentiment among business owners. When this is truly the case, you will never communicate that value more clearly than when you invest the time and energy to conduct formal reviews.

Steve Meisenheimer offers practical insights into leading and managing a growing company through his books, audios, and subscription products. Learn more at http://www.MeisenheimerInc.com, or e-mail Steve at Steve@MeisenheimerInc.com

You are welcome to reprint this article in any format as long as the author s name and website in the previous paragraph are also included.

Steve Meisenheimer went door-to-door trimming trees to work his way through school. His business eventually became the largest tree service in the Southwestern United States. Steve found his passion in business and has now owned nine companies before founding a management consulting firm where he helps small business owners develop strategies to grow more successful companies.

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