Here's how you can align performance evaluations with your small business's goals and objectives.

I always love to cite my friends at WD-40 on this one - the responsibility of a leader isn't to grade papers, it's to help their team members get an A+. In this system, Employees create their own goals aligned with the company's based on their Job Description and skillset. Then, managers take on the role of a coach, helping the team member figure out what needs to happen next in order to succeed. At the end of the month/quarter/year, the team member gives themself a grade, A, B, or C, based on how they think they did. The manager can push back on an employee's grade, but they don't write one themselves. The goal is to encourage honest self-reflection, focused on actual improvement.

Define Goals: Before you can align performance evaluation with your businesses goals, you must have a clear understanding of what those goals Take the time to define your short-term and long-term objectives, ensuring they're Specific, Measurable, Achievable, relevant and Time- bound (SMART). Once your goals are well defined, communicate them to your team.This sets the stage for performance evaluations that are not only about individual performance but also about contribution to the business's overall success.

The concept of Wildly Important Goals (WIGs) from the Four Disciplines of Execution is really powerful. It suggests that if you focus on one to three big goals for the company, and then one to three goals for each department or person that directly contribute to those big goals, you can achieve a lot more. This approach helps everyone stay focused on what really matters, increasing the chances of success. I've found this idea incredibly helpful over the years, as it simplifies how we set and achieve important goals at work. The Four Disciplines of Execution (4DX) was written by Sean Covey, Chris McChesney, and Jim Huling.

Determining what to measure is not as easy as it sounds. Is your measurement affected by external factors outside your control? your sales might increase ,in summer ,because you're selling ice cream for example so you cannot compare with last months results. Defining what to measure needs to be based on similar past results following the trend of your results to predict and project new targets. My suggestion would be to view past results and see were your progression is going, based on this determine the forecast and discuss with you team if they might see any issues as to why you cannot reach these goals. Consider external elements which affect these measurements and compensate for them.

Creating scoreboards for your goals is a fascinating way to track progress. Whether you use a computer spreadsheet or draw it out by hand, the scoreboard highlights key indicators that show both leading and lagging results. This kind of scoreboard gives you a clear picture of where you currently stand, where you're headed, and how far you've come. It's a powerful tool for staying focused and motivated on achieving your objectives.

I cannot stress enough how crucial it is to give regular feedback. Individuals want to know what they are doing well and where and how they can improve. Annual goal setting and reviews are worthless.

At Fund&Grow, we advise clients to ditch the annual review rut! Regular check-ins, not just yearly evaluations, are key to aligning performance with business goals. This fosters open communication, allows for course correction, and keeps everyone laser-focused on objectives. Regular reviews also build a culture of continuous improvement – a critical ingredient for small business growth. Remember, small wins and adjustments add up to big results!

I've found weekly meetings to be incredibly effective and efficient for staying on track with goals. During these meetings, we focus on our annual goals and set one or two objectives for the week. This structured approach allows each team member to discuss any challenges they're facing in achieving their goals and brainstorm solutions with the team. It holds everyone accountable and fosters collaboration, ensuring we continually improve and reach our goals together.

Open communication with employees is crucial to any organization's success. Isolating employees is a common mistake that can lead to disengagement and decreased productivity. Encouraging a two-way dialogue during performance evaluations not only helps employees understand their role in achieving company goals but also provides them with a platform to share their ideas and concerns. This collaborative approach fosters a more motivated and cohesive team, driving innovation and continuous improvement.

Early on in my entrepreneurial journey, I understood how important it was to have set goals. But I hadn't given much attention to adjusting those goals regularly - I'd adopted a *set and done* approach. Business isn't static, it's constantly changing, which means YOU have to change too! As a result, growth eventually slowed and preset goals were not achieved. Thankfully, I had a good mentor who saw the issue and helped me set up a better system. I learned the importance of adjusting goals and strategies based on changing market/economic conditions and customer buying habits. After creating monthly, quarterly, and yearly reviews, I was better able to adjust quickly so that targets could still be met and growth be maintained.