For the Benefits!
Performance evaluation can be a source of friction and abuse in the family business. It can cause stress, friction and lower morale. It can increase feelings of unfairness amongst employees and even managers. So, why bother with it?
According to top family business expert
"Having a performace evaluation system in place to measure and monitor how well the business (managers and associates) is doing in meeting "mission critical" benchmarks is a basic building block for every successful family business."
"An effective performance evaluation system starts with the specific performance of an individual and builds to the general performace of the family's business."
Schwerzler has been studying and advising family businesses for more than 40 years and he is the founder of the
Family Business Institute.
Let's look at the whole process to see if we can come up with an answer!
Who Makes It Work?
- employee and manager are a partnership...
- ... working together to make it succeed
What Are The Key Elements of an
Effective PE System?
- Clearly defined performance standards
- An effective monitoring system
- Regular discussions of performance
- Development of appropriate action plans as a consequence of the appraisal
Where Do You Do It?
- it is informal, except for the appraisal meeting that should be private and undisturbed to show respect for employee
When Does It Get Done?
- it should be continuous throughout the year, on a regular basis
- appraisal meeting should be scheduled, not delayed
How Do You Do It?
There are several steps, each of which must be done. We have found that PE usually fails because some [or most!] of the steps are not done, or are done poorly.
This might be the most important part of PE
- reaffirm what is expected of employee - written job description identifies major functions
- reaffirm the importance of employee to work unit and company's mission and goals
- agree how performance can be measured - in specific terms not vague generalities
- identify performance metrics - work not measured cannot be managed
- identify and agree what tools and training are needed for the employee to perform as expected
- reaffirm commitment of manager as partner to regular communication throughout the year
Ongoing performance communication
- employee and manager have to meet regularly throughout the year to track progress
- note what is going well and identify problems before they get big or out of hand
- decide together what to do to solve problems
- feedback must be as objective and specific as possible. Employee can't guess at what is wanted or whether they are doing the right things
So, Why Bother With Performance Evaluation?
Benefits! Benefits! Benefits!
- knows why their job is important - to the customers, the company and their boss
- sense of purpose - they know what they have to do and how to do it; they can work more independently
- less time fighting fires
- less stress
- more time to plan and manage
- improved morale, less friction, improved productivity...
- ...all lead to improved profitability
Employee performance appraisals are only a part of the whole process, but very often it comes down to filling out a form and "laying it on" the employee at an annual meeting or sticking it in the mail box!
If your family business is not performing well - not maximizing the full potential of the business, an "operational assessment" could make a significant difference in growth and profitability Southern Business Research
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The Practitioner's Guide for Organizing an Organization
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- PGOO shows how to identify the most pressing problems to solve
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Family Business Experts
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Let us help you find the best performance evaluation system for your family business - so you can enjoy the benefits!
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