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Staff review process: Five reasons why your business needs one - and what to include

Article By Brent Charlton | | Business Consulting

At the beginning of the financial year, most larger businesses conduct a 6- or 12-monthly employee review. The staff review process is a hard and fast rule for them but, for many small to medium enterprises, it is neglected.

The common reasons I hear are:

  • “I don’t have time”
  • “They know what I think of their performance as we talk all the time”
  • “I don’t see the need”

The problem with these responses is that they fail to recognise the huge opportunity. You only get out of your employees what you put in: if you don’t invest time into mentoring and communicating with your team regularly, you generally won’t get the results you want.

After all, it’s all about two-way communication.

No staff review process? Here’s 5 problems you may face as a result…

Failure to have a staff review process is likely to result in:

1. Poor communication of goals

This applies to both your business goals and your employees’ private and professional goals. Unsurprisingly, this probably means that neither the business nor the team member will achieve their goals.

2. Poor documentation of your expectations of employees and vice versa

This leads to frustration and the finger of blame being pointed at each other for uncommunicated expectations not being met.

3. Lack of understanding of career steps

You won’t know whether your employee’s current role is what they want moving forward or the timeframe in which they want to achieve their next step.

You may become frustrated that they aren’t growing and taking on more responsibility while your team member may feel undervalued and demotivated. This may result in them looking elsewhere for opportunity and motivation.

4. No identification of training and development needs

Professional development opportunities are key to employees staying with companies. Most want to overcome their weaknesses, grow new skills, and take their career to the next level. If they feel that you don’t want to invest in them and don’t value them, they will look elsewhere.

5. No acknowledgement of contribution to the culture & values of the businesses

Employees hear you talk about culture and values but only in general terms. This isn’t meaningful to them and is ultimately demotivating when they identify team members not living those values.

How to design your staff review process

As you can see, having no staff review process results in a bad outcome for both you and your team. The good news is that it’s easy to turn this around, as long as you follow a good process.

I recommend that your review process include the following:

  • Goals

It’s important that managers and mentors both understand their team members’ goals for the year ahead and acknowledge the goals achieved since the last review. These goals should ideally align with those of the business.

  • Key Performance Indicators (KPIs)

Every team member should have KPIs. The rule I go by is 5 KPIs plus or minus 2 (so 3-7 per team member). These need to align with the business KPIs, as we want our team to be aligned with growing and improving our business. Each team member needs to understand why these KPIs are important and how they can achieve them.

  • Next step

What does your employee need to do to get to the next level within your business? Some team members will be happy with their current position, but you should at least ask the question each time because things change and people change. The last thing you want is for a great team member to leave because they see a lack of opportunity to advance their career, while you assumed they were happy and content in their current role. Always ask.

  • Training

Identify what training your employees need to help them achieve their goals and progress their career. For most businesses, their largest expense and therefore largest resource is their team. To get the most out of them, invest in their skills and capabilities.

  • Alignment with the businesses vision and core values

Are your team living the core values of your business every day? One way to assess this is to identify the desired behaviours that underpin the values. Then you and the team member compare their actual behaviours with the desired ones. These assessments should be constructively discussed where there is non-alignment (i.e. “I think this, you think that, why are we not on the same page?”)

Whilst an effective staff review process does require a reasonable time investment, it’s worthwhile to ensure you have a happy and productive team.

If you would like assistance with formulating your staff review process and determining your current team engagement and satisfaction levels, we can conduct a comprehensive staff survey. This consists of 40 questions, with anonymous responses to ensure that team members feel comfortable in providing open and honest feedback.

Please contact me to find out more.