Now that we’re into November, the end of the year is approaching fast, with thoughts turning to family gatherings, travel and holiday shopping. This is also the time of year when owners of many small businesses—including advisory practices—turn toward year-end performance reviews for their employees.
I’m not a big fan of employee reviews of any kind; In fact, if advisory firm owners structured their compensation/bonus plans right, they’d never have to do another review. But that’s the subject of my December column in Investment Advisor, so you’ll have to wait a few weeks so see what that’s all about.
In the meantime, I recognize that many advisors will be doing performance reviews in the remainder of this year, and to them I offer one piece of advice: To be effective, performance reviews have to be two-sided: You have to review your employees, and they have to review themselves. That’s because reviews aren’t just for giving feedback. You also want to check in to see how each employee is doing within your organization.
So be sure to have employees give you feedback about their performance as well. Not about their feedback about the company, but about how well they see themselves as an employee—and why. For instance, an employee might tell you that they are slower setting up new client files or processing trades than other staffers, but go on to explain that they believe one of the keys to your business is error-free work, and they take the time to do it right.
What does that tell you? Perhaps your firm culture isn’t as quality-oriented as it needs to be. Getting your employees’ view of how they are performing increases their buy in to high-quality job performance. It will also contain all the feedback about your company that you need to know.
If you’re going to offer some criticism, be sure to balance it with lots of positive feedback too—I like to use the rule of four positive comments for every negative one. Keeping employees motivated should be your first priority.