10 Essential Steps for Conducting Effective Team Evaluations

As a small business owner, I have designated June as the month to do team evaluations. I know that it is traditional to do it in the team member’s anniversary month, but I was failing to do it on time. When I took a step back, I realized it was because I generally hire during the Year End season. That’s just not a great time to get me to do administrative work and since I have the flexibility to change policies for my business – I did. So, a few years back, I changed the due dates and now I’m on-time every year.

This year was tougher than normal to write annual reviews. There were so many outside factors that changed our course of direction. I didn’t want to grade my team too harshly, but I also wanted to acknowledge what didn’t go well during the year. I wrote these words in one of my evaluations this year… Pandemic, deaths, shortage of qualified people to work and a plethora of new government programs caused a new kind of chaos in 2020/2021.

Every business owner needs to have a system of evaluating the team member’s ability to do their jobs. We need to celebrate the wins and acknowledge the shortcomings.

• What plan do you have?

• Do you do the same thing for every team member?

• How do you decide raise increases?

• Do you go through a budgeting process prior to evaluation time?

• How do you know if you can afford to give raises?

These are just some of the questions we as business owners need to answer and ensure that we are treating each team member fairly. Trouble comes when we don’t have a uniformed way to evaluate.

If your team is growing and you realize that you don’t have a uniformed way to evaluate people, it’s time to put some processes in place.

1. Update or create their job description. Everyone on your team no matter if they are full time or part time should have a job description.

2. Discuss and create goals for the team member to accomplish during the year.

3. Have milestones either on a monthly or quarterly basis and discuss regularly on how they are accomplishing their goals.

4. Have an official pay range for each job description.

5. If someone is reaching the top of their pay range, discuss what path they take in the company to reach the next level.

6. During the budgeting process for the year, decide how much you can increase salaries. I do this in a “big” pot … for example I have $10K for management raises and $10K for bookkeepers for the year. I don’t have to allocate the raises at this point – just plan for the increase. It will help you understand if you need to raise rates.

7. Create an Evaluation template – for fairness and ease on you, everyone should have the same template.

8. Determine your evaluation cycle and publish it.

9. Set time on your calendar to write the evaluations.

10. Set up time with your team to do the evaluations.

My golden rule of thumbs when doing annual evaluations – remember the whole year, not just what happened in the few weeks before you wrote the evaluation AND the evaluation should be a summary of things, they’ve already heard from you. The evaluation should never be a surprise.

Processes always need refining. I’d love to hear what you do differently. You just may have something I haven’t thought of yet.