It’s been a slow death, but the Annual Performance Review is for the most part, dead. Soon, we will no longer hear about the annual performance review from companies large or small. It’s a giant, unproductive exercise in project management for the CEO or HR leader with ineffective outcomes.

If you’re like most of the small business leaders that I know you have...

• Decided not to performance reviews anymore

• Forgot, ignored and have not done performance reviews in the past 1-2 years

• Never did annual performance reviews

 

 

Why are annual performance reviews so darn ineffective?

1. They are a recap of a year’s worth of performance. The employees in the 2018 workplace want to spend time looking at the present and the future. They don’t want to look back at 12 months of performance whether it was good or bad. They are asking, what’s next for me, now? What’s coming in the next 3 months?

2. Our workplaces are fast-paced.. Employees and employers need to have more regular communication about performance and waiting 12 months between reviews is simply too long to build any momentum or plan for development.

3. Managers were never really good at them. That’s right, when you do something only one time per year you never really get in a steady cadence to be consistent and effective. Besides, most managers begrudgingly did them just to check to a box.

And, I’m sorry! I have pushed the annual performance review in the past and even rolled out new systems to organizations. With a lack of employee/employer feedback it feels like an obvious tool to communicate but alas I think we can do better. We can communicate in better ways to create workplaces where feedback, goal setting, and coaching are frequent and executed with ease.

Now What?

Small businesses are embracing quarterly reviews. This can be a game changer for your culture, business goals aligned with individual goals, and communication. Let’s look at why and how to do this right.

I am a humongous fan of dropping the annual performance review and replacing it with quarterly reviews. This can be a game changer for your culture when business goals aligned with individual goals and communication. Let’s talk more about why and how to do this right.

 

 

5 Benefits of Quarterly Reviews

1. Cadence - Setting a quarterly cadence helps keep the goals top-of-mind and allows managers and employees to get good at having quarterly performance dialog.

2. Set achievable, top-of-mind, goals - Set goals that set are small bites (or at least bites of a bigger goal) which makes them easier to digest and accomplish.

3. Accountability - With a quarterly cadence, and setting meetings in advance, there is accountability built into the process.

4. Lightweight - Quarterly review are lightweight. They should be thought of a process that is used to manage performance and not an annual event that you do.

5. Feed Forward - Annual reviews were a tool to provide feedback. Think of quarterly reviews as a way to feed forward and look ahead at goals and performance for the coming quarter.

 

Here is how to start implementing a quarterly review process

Follow these steps below or use our Quarterly Performance Goals download to get started. The download includes a how-to guide, sample review, and a fillable PDF and it can be found on this site under Premium Content.  

Lay the Foundation - Develop a structure for your quarterly reviews including basic guidelines (who, what, when, where, why and how). Communicate the process to your team and allow time for questions. Also, communicate your goal for continuous improvement in this process. For example, at first we are going to start by using only 3 questions and a 1-page form...in the future, we may add questions and perhaps even utilize software to help manage the quarterly reviews.

Monitor and Improve - Once everyone has completed the first round of dialog seek feedback. Ask managers and ask employees so that you can get a sense of how things went. Look at the results of the review conversations (the quarterly review forms or documentation) for feedback.

 

Sample Quarterly Review Questions

Assuming you and your team member know the company’s overall goal and mission for the year let the quarterly review be a dialog. Both of you will come prepared to chat and come to an agreement on the following questions:

The beginning of the quarter:

• What are your goals for the quarter?

• How will you make progress towards those goal(s) this quarter?

• What tools and resources will you need to accomplish your goals?

• How does your goal contribute to the company’s overall business goals?

The end of the quarter:

• What was your biggest accomplishment in the past quarter?

• Describe where you struggled

• What’s one thing that could be going better?

Then, document what has been discussed (Google Doc, blank piece of paper, napkin, use this guide, whatever!) and make sure that both the employee and the manager get a copy.

Set a date for the next quarterly review 3 months out. Rinse and repeat.

Keep this process lightweight. One downfall of the ‘annual performance review’ has been the heavy burden that it creates for people. Your goal by changing your process is to make it effective and simple. If it’s too heavy and difficult you’re doing something wrong.

 

Download your How-to Guide and Quarterly Performance Goals Worksheet. Your guide to ditching the annual performance review and replacing it with employee-driven, actionable quarterly goals.

Ready ditch the annual performance review and replace it with employee-driven actionable quarterly goals? Consider joining The Exceptional Workplace premium content. There you will find the intuitive How-to Guide and a Quarterly Performance Goals Worksheet specifically curated for small and medium-sized businesses. Download your copy today and get started.

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This might seem like one of those posts you can pass by — because c’mon, of course you know your workforce. If your business is small enough, then chances are you were the one who hired them!But actually, studies show that there’s often a huge disconnect between the management and the workforce of an organization. And if you’re not connected with your workforce, it’s only a matter of time before you start having serious problems.

The good news is that you can avoid so many issues with just a little bit more knowledge about your people. So if you’re starting to wonder if maybe you don’t know your workforce as well as you thought you did, ask yourself, do you know:

The #1 Gripe Going Around the Office

If you do nothing else after reading this post, I’d really encourage you to find out the #1 thing that’s bugging people in your workplace. It might be an easy fix that you’ve never even thought of simply because of your position in the company — by knowing what it is and addressing it, you’ll show people that you’re actively invested in making work better for them, which will go a long way to inspire loyalty and improve productivity.

As an example, a client in Portland recently upgraded their workplace coffee, water, and snack program to the absolute delight of their employees. Perrier sends a message of class, high-end, and engagement while tap water might send the message of unremarkable, ho-hum and unimportant. Every workgroup is different so it’s important to ask, and ask more than once.   

Even if it’s something that you can’t fix right away, you can at least let your team members know that you hear them and the lines of communication are open, which goes a long way towards easing tensions. Besides, there’s a good chance that this issue is related to the second most important thing to know about your workforce:

Why People Leave

You probably have some sort of idea of your turnover rate already — and if you don’t, you need to get on that ASAP. But it’s not enough to know that people are leaving. You need to know why people leave, and especially why your best people leave, otherwise you could be needlessly hemorrhaging talent and knowledge capital. Is it more money, better career opportunity, workplace culture, are they burnt out?

How do you figure this out? By asking and observing. Make it a point to include questions about this sort of thing in every exit interview, and make it clear that you really do want to know to improve, not to harp on people or defend the company. If you are afraid that employees will not be honest with you to the extent that you need have an HR Consultant or another key leader in your company conduct the Exit Interview. In the digital age, exit interviews can even be conducted electronically.

Why People Stay

Similarly, you need to know why people stay in your workforce, both the things that keep the great employees and the things that keep the not-so-great ones. That way, you can keep doing those things that encourage the people you want to stay, and stop doing the things that encourage the underperformers.

The best way to find out why people stay is to conduct Stay Interviews. Here are some great Stay Interview questions taken from the book, Hello Stay Interview, Goodbye Talent Loss.

• What about your job makes you jump out of bed in the morning?

• What makes you hit the snooze button?

• If you won the lottery and resigned what would you miss the most?

• What can I do to keep you?

• What would entice you away?

Have you ever heard an underperformer say that they like your company because they are on easy street while a top performer likes your company because of the rigor? This insight is valuable. The solution here is to balance the rigor with the goal of losing underperformers and attracting and retaining top performers. Hint; 1:1 meetings and mid-year reviews are a great way to balance the rigor keeping tabs on each team member's performance.

The Ambitions of Your Key People

You may already get a sense of this as you’re finding out why people leave and stay, but make sure you really get a good sense of the ambitions of your key people. This allows you to support them in achieving those ambitions (which is a very important part of leadership, and one of the top intangible things employees want from companies). This alone may keep you from getting caught off guard by one of your key people leaving to pursue an ambition you knew nothing about. You may even be able to keep them if you can find a way to support that ambition while still having them work for you!

An example of this is when a client of mine found that their right-hand gal had aspirations of working in the medical field in an auxiliary role. My client pursued clients in that industry, which satisfied the curiosity of her employee. Small businesses have a way of being nimble to meet these needs. Don’t be afraid to ask.

Something Personal About the People You Work With

So you already know that people are not widgets or computers … but it can be hard to remember that when you’re head down in paperwork, schedules, and payroll. The truth is, most employees work to live, so make it a point to find out what they’re living for outside of work, and ask them about it! It doesn’t have to be a big production; something as simple as “Claire, how was your hike to Mt. St. Helen’s?” works just fine.

Doing this keeps you connected with the pulse of the workplace and makes people feel well cared for and not just as one more number on the payroll, both of which are characteristics of an exceptional leader. (Not to mention being crucial for a happy, productive workforce.)

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Well, for one thing, if you get this wrong, you’re going to be completely out in the cold when it comes to attracting great talent. Worst case scenario, you fail to innovate in this area and you become unable to offer an attractive compensation package to potential prospects. Or, even worse, you lose your current workforce as they go somewhere that is offering them the compensation and perks they want.

That all sounds pretty grim … but it can be much easier (and cheaper) than you think to make your business stand out from the competition.

Start by looking at the competition.

What are other companies in your industry sector offering? What about benefits and perks? If you don’t already know, and you’re not sure how to find out, there’s one very easy thing you can do: ask.

Ask candidates where they’re currently at in terms of compensation, ask new hires about their benefits, nose around at networking events and ask people what the latest hot perk is. And don’t forget to ask your staff — they won’t be shy in telling you what they would love to see at the company! And failing all that, you can always do some careful Googling to see what’s happening in your pool of competition.

Once you have an idea of the kinds of things going around, it’s time to look inwards.

After you’ve gotten a good understanding of what your competition is offering and what your workforce wants, then you should start to think about how to position yourself correctly in the marketplace. You can always look at traditional compensation changes, but there are also loads of non-traditional perks that can be really powerful, including:

1. Flexibility

As in, flexible scheduling, the option to telecommute, or creating a results-oriented workplace.

2. Opportunities for Growth

Including things like a professional development budget, succession planning, or access to an executive coach or mentor.

3. Vacation/Paid Time Off (PTO)

If you can, think about providing a generous vacation/PTO policy. World at Work reported that they average PTO plan starts at 16 days per year and that average employers offer 9 paid holidays annually. Here are the paid holidays that I recommend:

• New Year’s Day

• Memorial Day

• 4th of July

• Labor Day

• Thanksgiving Day

• Christmas Day

• 3 Floating Holidays (for any use such as Good Friday, Christmas Eve, the day after Thanksgiving, Hanukkah, etc.).

If you can’t swing that, then try for something like paid time off for volunteering.

4. Food and Beverages

This is one of the easiest things you can do to make your office a better place to work, so think about things like having an office coffee and beverage program, providing snacks (like this one), or doing something like a team lunch provided by the office on Fridays.

5. Health and Wellness

This is also an extremely popular area for perks, so consider getting an office gym membership, bringing in masseuses for in-office chair massages, or even offering wellness classes or lunch and learns.

At the very least…

OK, so maybe the in-office chair massages are outside of your budget for now. But at the very least, you should consider adding something to your perks to stay ahead. Some of the perks I listed above are very low cost and provide a huge return on investment. For instance, flexible hours and telecommuting.

Remember, when you’re treading water in a pool of sharks, your total compensation can make a great bite proof cage — that is to say, you’ll find it much easier to attract, recruit and retain your workforce when your total compensation is elevated. So take a look at your current compensation, benefits, and perks, and see what you can do!

Talent is one of the biggest predictors of your business or team’s success. But in the increasingly competitive labor market, it’s becoming harder and harder to attract and retain top performers. This whole setup sends a lot of small businesses into a tailspin. After all, when you’re small, how can you possibly create a compensation, benefits, or perks package that can compete with the bigger companies, so why even try?

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Amy McGeachy, PHR is an HR Consultant specializing in cultivating exceptional workplaces for her clients who are mostly small + medium businesses. Amy is the founder of The Exceptional Workplace which provides premium HR and people practices content for small business leaders. She is a certified HR Professional (PHR) through the Society of Human Resource Management (SHRM) and a Certified Coach through the Coach Training Alliance (CTA) and a member of the International Coaching Federation (ICF). Amy works with businesses in the areas of training, recruitment, employee relations, and strategic HR.

Dearest blog reader,

I don't normally report on bad news or scary things but this is worth sharing - it's scary. I have been told that identity theft is hitting companies hard with a clever phishing scheme targeted at HR and accounting.

It would be devastating to find out that someone from your own team unknowingly turned over all of your valued team members W-2 information to a crook. This is what is happening in businesses. Yes, it's absolutely happening and the emails the crooks send are extremely clever. The nightmare of it all, and the long-term impacts on everyone is what is driving me to send this message.

None of my business clients have been hit, thankfully, but I hear it is rampant. Below are two links to the FBI that will help you understand the phishing scheme and what you can do to protect your company.

PLEASE share this with your HR team, accounting team and employees. 

Building a Digital Defense - Part 1

Building a Digital Defense - Part 2

Stay safe my fellow entrepreneurs and business leaders.

~ Amy McGeachy

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How to create an HR plan when you don’t even have a real HR department or you’re barely keeping up as it is.There are two kinds of people who read this type of post: the ones who read the title and think, “Excellent, I can create an HR plan” and those who read the title and think, “How on earth am I supposed to create an HR plan when I barely have time to actually do HR as it is?”

Download the HR Planning calendar.

When you’re swamped with the day to day of just keeping your business running, even doing HR can slip down the priority list, much less creating an HR plan for the year. But if that sounds like you, I’d really encourage you to rethink your perspective, because good people management is one of the cornerstones of a strong business. And with that in mind, I’m going to simplify HR planning for you as much as possible.

Here’s what absolutely has to get done.

Let’s be absolutely honest here — in most cases, no federal, state, or local authority is going to demand that you complete performance reviews, engagement surveys, supervisory training, or even an HR audit of your business. But they do require you to follow the letter of the law when it comes to compensation and benefits. (AKA how and when you pay employees and offer benefits.)

The key to compensation and benefits is paying all employees fairly and consistently. Many of the compensation laws we follow today stem from the 1930s, when labor unions were established to save employees from having to work long, dreadful hours without breaks, without overtime and for very little pay.

Nowadays, break periods and overtime requirements have been legislated federally and in many states as well. When it comes to benefits, we’ve had important acts like the Family Medical Leave Act (FMLA) and Americans With Disabilities Act (ADA) among others to protect employees, as well as the more recent Affordable Care Act.

All of these compensation and benefit requirements must be followed closely. But aside from those...

Setting federal and state compensation and benefit requirements aside, you’re pretty much free to determine whether you will have other types of HR practices in your company, including performance reviews, employee engagement surveys, or training.

That being said, after nearly 20 years as an HR professional, I can tell you that these can make or break your company.

When you have these types of HR systems and structures in place, it’s not only better for your overall workplace culture and productivity, it’s also a great foundation for a defense against employee complaints or worse, a dreaded lawsuit. But, as I said, it’s not strictly required.

So at the very least, you need to think about whether you need to include these things in your calendar...

HR planning Supervisory training HR audit Employee engagement surveys Non-harassment training Non-discrimination training All employee off-site meetings Leadership retreat Performance reviews 1:1 meetings with direct reports Employee handbook review Workforce communications Leadership training Regular staff/team meetings

Your next step:

With the items you selected from the list above, begin to pencil them in on you calendar. Even if some of them aren’t happening for a few months, it’s nice to have a plan in place.

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Love practical tips for creating an exceptional business? We’ve got loads more in The Exceptional Workplace! We help small business leaders (CEO, Owners, HR, Controllers) cultivate exceptional workplaces through strong HR and people practices. Learn more here.

I have a confession to make: up until last year I used an offline HR process. It was effective when I first started using it, but as these things do, it deteriorated over time, until, with the help of my new HR consultant, I realized that it had become completely ineffective. Collaborating was difficult, tracking candidates was hard, and the process was choppy, to say the very least. At the same time, we were working with a client who uses JazzHR for recruitment management. With Jazz we could track candidates, both stay aware of a candidate's status, communicate with each other, with hiring managers and candidates.

What a difference! I've tried various recruitment systems throughout my career and this one is simple, intuitive and truly streamlines the process and perfectly sized for small and medium-sized businesses, which is why we switched over to it almost immediately.

All that got me thinking about some of the other HR tools we use to keep everything running smoothly.

While new, shiny systems don’t always help, the right ones can do a lot to simplify your recruitment process, not to mention advance your capabilities, organization, communication, and efficiency.

Here’s a list of some of our favorites:

Asana

Asana is great for project management, and it’s a lifesaver when it comes to delegation. Plus, it’s free to get started (although there is some advanced functionality with the paid version, and you can easily customize it to work with the way your brain works with both project list and project board options.

Evernote

I always tell people that Evernote is my brain’s external hard drive. It’s my favorite tool to keep notes from one on one meetings, but it’s much more than a note app. With functionality coming out its (elephant) ears, Evernote is a must.

Kantola

Kantola is what we use for online training, and it has everything from everything from non-harassment and non-discrimination training right through to HIPAA training, language training, and customer service training. Well worth checking out.

CoachingQ’s

And finally, in a rare plug for our own tool, CoachingQ’s. CoachingQ’s is a collection of cards created specifically for team building and training. They’re regularly updated (so you never have to worry about accidentally using the same questions over and over again), and they’re seriously effective for building a great team. Order your set of CoachingQ's here.

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Over Thanksgiving I overheard my husband talking to my parents about how successful my business has been in 2016. “Her efforts have paid off!” And, “She’s amazing!” rolled right off his tongue like I was paying him to say those things! Of course, I wasn’t. But my heart grew bigger and my confidence grew stronger so much that I think I stood nearly an inch taller by the end of the day. Let’s face it, how amazing does it feel to be recognized for our hard work? Recognition, either in public or in private, is ridiculously motivating. We are in a unique situation where most of us want to call it a year and sweep 2016 out the door. But wait! Let’s pause and all look at what’s going right in your workplace.

Get it started:

• In your own way, take a minute or two to recognize someone for their hard work. This can be verbally in front of peers, it can be in private, digitally via email, social media, text, Slack -- there are so many digital choices these days! You pick.

• Then, add the tagline below to your note (or send it separately if your recognition is verbal).

• This note was inspired by a Bucket Filling in the Workplace activity to generate loads of appreciation at work. Do you want to pay it forward too?

How can I participate

• If you received a Bucket Filling in the Workplace note you are hereby challenged to give back three times what you received. That’s right, pay it forward to three people.

• What is Bucket Filling in the Workplace? Just a note telling someone what you like and appreciate about them. This can be in the form of a handwritten note, an email or even a text. Whatever comes naturally to you.

• Include the tagline and link at the bottom of your communication (or send it afterward for verbal recognition). Let’s get the spotlight focused on what’s going right in your workplace.

Examples of killer workplace recognition (plagiarize as you wish):

• Jen, you lead with heart. There is not a leadership decision that you have made this year that your heart didn’t enter the equation. Your ability to pause and take note of where humanity fits into our workplace motivates me to do the same. Thank you for constantly role-modeling this for me and others in our workplace.

• Ryan, your drive to achieve results is unrelenting. Once you set a goal there is no holding you back to achieve it. This year you hit your sales target and then some. I am beyond impressed!

• Thank you, Natalie, for your help reinventing our workplace culture this year. People like you are one in a gazillion. Seriously, in your league, you have no competition!

• Ben, hands down, you are one of my favorite people to work with. You are a bright, big picture thinker who delivers every single time. I appreciate that so much about you. Thank you for being you!

• Thank you, Emily for helping me keep my head in the game in 2016. It was a tough year and without you I might have given up on our goals. You kept not only me but our entire team motivated with your infectious personality, unrelenting drive and supersized heart. I appreciate you so much.

• You rock! Is it fair to say that when I’m assigned to projects on your team I do a mental backflip because I know it’s going to be an out of this world experience? Joe, working for you is simply the best.

Now, go spread some workplace cheer. I'm talking to you. Yes, you. Do it. You will be glad you did. 

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Supplies: Whiteboard or large post-it paper (for virtual teams a shared Google doc will work) and markers (colorful markers are best)

Participants: Any number

Time: Unlimited (could run Monday - Wednesday of Thanksgiving week)

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Gratitude is contagious and most often it doesn't cost anything. Grab the post-it notes and start decorating your office!

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This team builder can be kicked off at a regular staff meeting or even via email. In the spirit of Thanksgiving and being grateful, have participants share on the whiteboard or post-it paper what they are grateful for at work. The goal is to have employees reflect on what is great about the workplace and build a bond among the team as everyone collectively takes this time to reflect. There is no limit to how much each person writes; one person might write a word or multiple words while another might write a sentence.

Start with a whiteboard or large post-it paper and put it in a prominent location in your office. A location where people walk by often is the best. Write in the center, “What are you grateful for at work?” A bucket of colorful markers will help liven up the team builder.

Every workplace will have a different end result, some might be full of words while others may even have icons or pictures drawn. Encourage creativity.

Results: The individual and collective group reflection about what makes your workplace a great place to create a bond among the team. It’s simple and collectively effective at drawing out insights into your workforce.

Take a picture of the final product. Perhaps send the picture to your team expressing your own gratefulness or keep it for yourself for a rainy day to remind you of the synergy you've created. And if you want to brag about your workforce send me a picture of this masterpiece. Nothing makes me happier than a grateful workplace.

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Supplies: Photos from team members, tape or pushpins

Participants: This is a relaxed spirit-boosting team builder for both small and large teams (3+)

Time: 10 to 15 minutes

Have team members bring a photo of themselves in a Halloween costume. They should secretly give it to you prior to the next staff meeting. All photos must be workplace friendly! Prior to the staff meeting, post all of the photos on a whiteboard (or wall). Let the team try and guess who is who. The person with the best-disguised costume (the hardest one to figure out) is the winner. This may be arbitrary! Give a pat on the back or a candy bar to the winner, your choice.

Results:

A fun stroll with your team down memory lane. Some employees may choose to bring a photo from their young childhood while others may want to bring something more recent. Either is acceptable as long as it’s workplace appropriate.

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