For most entrepreneurs, "performance management" is not a whole lot of fun. In fact, when it comes to employee reviews, the boss often dreads the process just as much as the employees on the receiving end -- interview after interview, filling out written evaluations, and then trying to actually make sense of all the paperwork. Yet, smart entrepreneurs know they need their staffs operating at full capacity and can't afford to bypass this crucial task. "Particularly with a small business, you need everyone being as effective as they can be," says Jamie Resker, founder and president of Employee Performance Solutions, a Boston-based HR consulting firm. So what are the best ways to make the process as effective -- and painless -- as possible? Here are five things you need to know.
1. Meet quarterly.
A lot of companies conduct employee reviews once a year, but according to Resker, an annual check-in is just not enough. Consider slightly less formal reviews, quarterly. "Look, that's just four times per year that we're connecting with people on how they are contributing to the organization and what they can do to become even more effective," she says. "Connecting with people at least quarterly ensures that feedback is being provided along the way and action can be taken early on to recalibrate performance." Even better, positive performance can be highlighted and rewarded on a regular basis, which encourages employees to keep the momentum going.
2. Keep the process simple -- and focused.
Who says employee reviews have to be a complicated, time-consuming process of paperwork and complex rating systems? Limit your form to one or two pages and keep the conversation to about 45 minutes. "People always appreciate seeing how their contributions fit into the big picture," Resker says. Try starting the conversation with positive feedback, before turning to areas of improvement and the organization's future goals. "Close with letting the employees know how much you value their contributions," Resker says. "Let them know you're glad they are part of the team."
3. Take care when framing the dialogue.
Managers should be thoughtful in their approach when bringing sensitive issues to the employee's attention. You need to be fair and honest, but you also want to have a successful conversation, so make sure there is some positive, constructive takeaway. "Frame any deficiencies as future-focused thoughts that describe what the performance could and should be," Resker says. "When an employee makes frequent mistakes, the manager should talk in terms of developing more accuracy. If the problem is that the person is lazy or slacks off, you should ask them to develop a greater sense of urgency and attentiveness to their work." Describing deficiencies with positive phrasing directly opposite to their actions means the employees might actually hear what you're saying instead of just getting defensive.
4. Think SMART.
Benchmarks won't be reached if the goals you set are vague or confusing. Next time you pinpoint an area for improvement, "identify any associated actions that will help the person demonstrate the competency or skill, then translate that information into SMART -- specific, measurable, attainable, relevant and time-bound -- goals," Resker says. Invest employees in the process by asking how they think things are going.
5. Kill the jargon.
According to Resker, terms such as "review," "evaluation" and "appraisal," while familiar and commonly used, are old-fashioned and not exactly relevant today when describing a two-way dialog. "Instead, use a term such as 'performance feedback' and 'planning tool.' The process should be a helpful, collaborative one, and not something that strikes fear and dread into the hearts of your employees."
The original version of this article appeared on AOL Small Business on 5/10/10.