This is a great article from Zig Ziglars Weekly Newsletter.

The Small Business Performance Review – an exercise in improvement

By Larry Galler

Over the years I’ve found that owners of small businesses complain often about the quality of their staff, but few conduct formal staff performance reviews to improve job quality, focus, or overall performance. Instead, their method of staff improvement is to moan, whine, and sometimes yell, which, of course, increases stress but rarely has positive effect. That type of leadership often produces a decidedly negative effect. In general, companies with a formal review process are able to create a more focused, more motivated staff because responsibilities and expectations are better understood, there are methods of measuring success, and a framework of constant improvement is in place. So why do so many smaller companies avoid performance reviews? I’ve asked many owners. When evaluating the answers, it is my sense that they don’t want to be in a high-stress confrontational situation with the people they have to work with day after day. But, they really don’t realize that if reviews are done right, they don’t need to be high-stress or confrontational. Instead of a complaint and counter-complaint session, it can be and should be structured in a review of the past, expectations for the future, methods of measuring results, and the co-creation of the methods to meet those expectations between the reviewer and the person being reviewed. There is a five-part framework for positive performance reviews: • Agreement on the list of responsibilities and expectations for completion of them. • An evaluation of how well the items on the list are being accomplished with positive feedback on the tasks that are done well and enumeration of areas that need improvement. • Co-creation of (“let’s work together to develop”) methods of improvement for tasks that need it. • Written goal-setting that both parties agree to for the next time period. • Follow-up on a scheduled, regular basis to see if progress is being made or modifications in the improvement process are warranted. If one of your goals is to improve areas of your business, initiating performance reviews should be part of your solution – beats moaning, whining, and yelling!

Larry Galler works with professionals, small-business owners, contractors, and entrepreneurs to increase sales and profits through better, more creative marketing and effective administration systems.