Despite the flaws, Don’t Just Stop Your Annual Review

Despite the flaws, Don’t Just Stop Your Annual Review

It’s that time of year- yeah! The annual performance review season…when managers scramble to track, measure and discuss performance with employees, in an attempt to focused employees on key priorities and improve performance, attitude, commitment, trust and engagement, all in one hour.

Oh right, you also squeeze in a quick chat about this year’s “raise” as you wrap up the meeting [perhaps awkwardly].

I usually joke that performance reviews are “universally” hated, but this is close to the truth.

Employees and managers dread doing them and question the value of the traditional annual review process. Even the largest employers struggle with improving employee performance and engagement based on this time-consuming process. More than half admit there is limited alignment of “pay for performance” in their process.

“Performance management is often a source of great frustration for employees who do not clearly understand their goals or what is expected of them at work. For these employees, annual reviews and developmental conversations feel forced and superficial, and it is impossible for them to think about next year’s goals when they are not even sure what tomorrow will throw at them.”
(Source: State of the American Manager: Analytics and Advice for Leaders, Gallup 2015)

In fact, by 2015 12% of the Fortune 100 decided to eliminate them.

Since large employers are abandoning this very corporate practice, you may think you should do the same at your business.

The question to ask is: “was the new system any better at linking performance to rewards and enhancing a culture of engagement?”

Unfortunately, no.

A new study by advisory firm CEB found that measures of employee engagement and performance dropped by 10% when they stopped conducting annual reviews!

According to a Wharton article that summarizes this research paper, “Managers actually spent less time on conversations, and the quality of those conversations declined. Without a scoring system to motivate and give structure, performance management withered. As one manager told CEB: “When I gave someone a low score in the past, I felt responsible for helping them out, now I just don’t feel that I have to spend time doing that anymore.”

Wow, scary stuff! When managers don’t “have” to conduct annual review meetings, they actually might have less interaction with their team. Even the imperfect process is holding managers partly accountable to coach their team.

Here are several articles and books that explain the flaws with this universal practice, and some solutions that have been tried:

3 Books:

Tom Coens and Mary Jenkins, Abolishing Performance Appraisals: Why They Backfire and What To Do Instead

Garold Markle, Catalytic Coaching: The End of The Performance Review

Charles Jacobs, Management Rewired: Why Feedback Doesn’t Work and Other Supervisory Lessons from Brain Science

Now that you see the challenges with traditional performance review, read my article to learn about the “cutting edge” practices that are replacing it: “Replace Your Broken Annual Review with “Ongoing Performance Management”

Do you have the Right People in the Right Jobs?

Do you have the Right People in the Right Jobs?

Last week I had similar conversations with owners at two very different businesses. I asked them:

“Do you have Right People… in the Right Job?” 

If you have been in business for a few years, you start to realize that getting new customers isn’t the challenging,
getting “good people” who want to take care of your customers is far more challenging!

Before I tell you how to build a great team…

Let me ask you, “How many A- Players do you have?” 
[Those that go above and beyond your expectations, are trusted, accountable and a good team player, open to feedback, eager to learn….]

If you have more than 25% A-Players, congratulations, you are in an elite group of small businesses! This is the foundation to build the rest of your team.

But until you get to +75% A Players, you don’t have the foundation in place to grow your revenue, profits, and customer
base without overwork and overwhelm.

When you don’t have the Right People: 

Without a team of A Players, you are captive in your business, involved in daily activities, fire-fighting, and are the only one who drives results. You may feel hostage to the low performer or toxic employee, for fear they will make trouble or quit and leave you hanging. You worry that things are falling through the cracks, you chase people down to find out if something was done, and you get interrupted all day long with questions and “checking” routine decisions. You feel like you can’t leave for more than a few days, and you pay for it when you go on vacation.

When you have the Right People, sometimes they are not all in the Right Jobs: 

Perhaps you have promoted a good employee to a new role, but she is struggling adapting to the new demands. You hired a new employee who seemed like a perfect fit, but he is not working out as expected. “Old-timers” are slow to adopt new ways of doing things and resist changes you want to make. You are frustrated with young employees who learn fast but leave in a year or two because they say you don’t have any future opportunities for them.

If any of these situations sound familiar, you are not alone! 

Most of us focus on hiring A Players to help us achieve our company goals, but once they are on the team we don’t give them the tools to be successful or reach their potential.

For our current staff, we are not sure how to build up their capabilities and performance. They have settled into the
habit of “good enough” and the status quo.

You are left wondering how to light a fire under the average Josie, and how to turn around the performance or attitude
of your most challenging employees.

You don’t want to be the bad guy or the witch, your attempts at coaching have not worked, and it is just easier to
tolerate mediocrity or do the work yourself. Or worse, your best people keep picking up the slack, but they may be
reaching burn-out or are frustrated with you.

The Promise 
If you wonder how some businesses seem to be easy to work with and have a great team, they have the Right People in the
Right Jobs.

When you have this, your trusted team works together to make good decisions (good for the customer and good for the

You don’t have to oversee every sale and every customer, yet you are confident that things are being done right and
customers are happy. You have a sense of control, and trust that the business on target for healthy growth.

The team initiates and implements process improvements, for fewer hassles and more sales without working harder. This
allows you to finally take time off guilt-free and worry-free.

The Model 

This concept is credited to Jim Collins who wrote about this in his book “Good to Great.”
1. Define the Right Things
2. Evaluate if you have the Right People
3. Ensure work is Done Right

You can read more in my detailed guide, Building Your Team, Right People…Right Jobs. Click here or below to download.



8 Reasons You Don’t Have a Reliable Team

8 Reasons You Don’t Have a Reliable Team

The (busy) life of a small business owner

When you started (or joined) your business, you did a lot of work yourself. As the business grew, you added staff to take care of the daily “work” yet you never seem able to get yourself out of everyday responsibilities.

Your days are busy but progress is slow, and you go home feeling like you didn’t accomplish anything. A 40-hour week seems like a luxury.

You would like more free time, but you are afraid to leave since problems surface and you “pay for it” when you come back.

You have a big list of ideas to improve your business, but these never seem to get started [much less finished].

The cycle repeats

You might even have hired someone new to take some of your workload, or started “delegating” some of your work to others.

But despite your best efforts and good intentions, your to-do list is long and your days are filled with endless calls, meetings, and requests that eat up your time.

Or someone recently quit, leaving you and the team hanging. Now you spend your precious time interviewing and training the new person (which you hate), and then catch up for the lost time.

Frustrating, isn’t it?

It’s an endless cycle. Every Monday you start out with big plans for the week, only to leave Friday with not much progress to show for all your hard work. Some days you feel so burnt out and overwhelmed, you think about exiting the business.

And deep down you know this can’t be the way to grow your business.

What could be the cause? Why are you doing so much in your business?

Because you don’t have the team you need to support you—a trusted, reliable team.

If you did, you would be comfortable letting them handle the daily activities.

You would be confident that they are doing a great job: growing sales, caring for your customers, making great decisions, while keep you updated on progress and achieving your ambitious business goals.

So let’s explore some possible reasons you don’t have a reliable team.

Reason 1: You are under-staffed

Sometimes you truly don’t have enough staff to cover the work to care for your current client base. People are spread thin and are just trying to keep their heads above the water. Obviously if everyone is handling a high workload, it’s hard for you to be confident everything is being done well.

Perhaps you just added a burst of new customers, or you have a seasonal bump in demand, or you are in the process of training a newbie.
Teams under pressure, overworked, and stressed are notorious unreliable.

You may think hiring is the answer, but it isn’t always the best solution to start.

When you address the other reasons (below), this usually increase the effectiveness, capacity, and therefore the reliability of your current team.

Reason 2: You have low performers

You likely have at least one person who is not performing well.

It might be someone whose job changed but their skills didn’t keep up, or they are struggling with the workload or an aspect of the job, or they are slow in taking on new responsibility. They might have inconsistent output, working hard some weeks and slacking off others.

You tried feedback, coaching, or training with short-lived improvement.

When someone on the team has sub-par performance, of course you don’t feel you can rely on him or her.

Reason 3: You have people with attitude issues

Sometimes you have people who do an adequate job, but it comes at a price. They give you or co-workers a hard time, grumbling and complaining when you assign work or ask for a status update. They might be toxic to peers, openly difficult to their supervisor, or continually resist change.

Just like the low performers, Debbie Downer and Toxic Theo aren’t your go-to people either. They may do the work (if you are willing to put up with the negativity), but it’s a good possibility they may not do the work well.

When you avoid performance correcting conversations with low performers or those with attitude issues you are not building a reliable team.

What most managers do is “reward” unreliable people by taking work and giving it to a more competent high performer. A great solution? No, but you would rather give work to the reliable. So you are stuck in this “catch-22.”

Both these types of employees drag down the reliability of your team, lower your confidence that everything is under control. Because it isn’t under control.

Even more importantly, “unreliable co-workers” is a main reason top performers quit, so ignoring these issues can force out your reliable ones!

Reason 4: Your “open door” has a line of people asking for help

When you let people pop on by to run things by you, you are enabling “problem bringers” instead of developing “problem solvers.”
“Hey boss, what do you want me to do about this? Mr Z called and wants to know what is happening with the new thing” These continual interruptions fill up your day, and distract your ability to focus on anything else.

Remember the biblical parable about “teach a man to fish, and he eats for a lifetime”? It’s the same for decision making.
When you are the source of problem solving you also become responsible for the decision, and enables a co-dependence on your input and guidance.

If you can’t rely on your staff to make good decisions without you, you will be chained to the office, worry when you are not there and be called 10 times on your vacation.

Reason 5: Your process is broken

Sometimes it’s not the people who are unreliable, it’s the process itself that causes problems, delays and customer issues.

If there are 5 people who are involved in the process to convert a proposal to delivery of a new sale, there are at least 5 places where the handoff can be incomplete or inaccurate or dropped entirely.

Sometimes your people are doing their best struggling through the convoluted and flawed process. To improve the human-side of reliability, check the underlying system.

If your good performers sometimes have issues with reliability, it might make sense to look at the work flow for effectiveness and efficiency.

Reason 6: You resist delegating

Hey, I get it. You need to trust first before you delegate.

If you can’t be sure the work will be done timely and accurately, you keep control of that task yourself. Even if it is boring or you hate the task.

I find that owners I work with have two main reason they don’t delegate.

One reason is the “it’s easier to do it myself” syndrome. Yes, it will take 20 minutes to show someone once to do this 10 minute task, but remember it’s 10 minutes every week (=500 minutes a year, 8+ hours.) So consider your time investment choices carefully.

The other reason is that a prior delegation was a disaster or just a big pain. You had to chase the person down for an update, nag them to finish it, they did it wrong, or worst of all created a big problem. Painful conclusion: brings you back to reason one- it’s easier to do it myself.

If you want to build a reliable team, you must improve your skills in coaching and training to achieve a successful transfer of work that doesn’t belong on the to-do list for a CEO or manager.

Reason 7: Desired Results are not clear (or rewarded)

You may not realize it, but if you are like most business owners, you are not clear about desired results or clear about priorities.

Most decent employees try to figure out what “Done Right” looks like and to do their best with the resources and tools you give them.
If you don’t measure or track any results, they may not know how they are doing. Absent of any data or feedback, most people assume that “no news is good news” and they are doing their job to meet your expectations.

So the “unreliable” don’t know it and don’t have any reason to change.

You also may not be rewarding the trusted reliable ones. Those that step up are given more work, those that duck and cover are given less work, and everyone gets a 3% raise and about the same year-end bonus.

Consider the messages you are sending with feedback, recognition and pay—is it rewarding reliability?

Reason 8: You can’t find good people to hire

Yes, I advise that you should improve your current team performance first.

But the lack of “good people” to hire is part of the reason you accept low performance or poor attitudes. You feel hostage because if you address the issues they might quit, and a mediocre person is better than no person.

You probably also dread the hiring process and rush to fill an open position. You take the “best” applicant, even if you worry they won’t work out.

If you settle for third-string players on your team and in your new hires, this is definitely a reason you don’t have a reliable team.

After you read this list, how many reasons do you have?

How many of these issues exist on your team?

If you have 3 or more, you likely don’t have a reliable who you trust to delegate work, run daily activities and work on projects to grow the business.

The Solution: Building Your Team Model

To build a reliable team, you need the Right People in the Right Jobs, Doing the Right Things

Next Step: Read the Guide

Guide to Building Your Team Right People Right Jobs

Would you like to learn the exact steps to go from stuck in the day-to-day to building a trusted reliable team?

Click to Download the detailed guide:

Building Your Team: Right People… Right Jobs

Small Business Catalyst Webinars

Small Business Catalyst Webinars

Recorded in April 2017, this webinar series includes short trainings and live interviews with host Diana Southall designed for the small business owner or manager.

Our speakers share their proven client strategies to add more sales, create smoother systems, build a better team, to ultimately grow profits and have more free time.

Just click on the links to watch the 25-30 minute trainings:

Are You An Idea Hamster?

Are You An Idea Hamster?

I often spend time with clients and other business owners who are full of ideas– so many they don’t know where to start, or they starting working on 2 (or 10) without much progress. Their head and office notebooks are littered with the ghosts of projects past.

I heard another business owner Amy call this being an “idea hamster”– what a great term!

You have an idea, and another idea, and another one, and you start running on that hamster wheel spinning and going no where.

Sound familiar? I know that it does for me, I struggle every day with being a reformed hamster.

Here are six key steps that have made a difference for me to complete something important [as Seth Godin calls it “shipping”]:

  1. Write a destination postcard for the end of the year– what you plan to accomplish
  2. From the postcard results, generate a long list of potential projects and categorize by type [are they planning, sales, marketing, people, operational?]
  3. Now rate those projects on effort and on impact on your goals — then rank by those with the highest impact and the lowest effort — these are your short list– put the rest into a “parking lot” [crucial step 1- they are always there to be re-considered.]
  4. Prioritize the list of projects— does one have to be completed for another to be effective? Does one address a burning issue or roadblock to growth?  Rank them and put a guestimate on the number of weeks to complete.
  5. Select the Number One priority project, get your team together, make an action plan to divide up the tasks and start chipping away every week.
  6. Crucial step 2– do not start another project until this one is complete! 

Do not get distracted by the next shiny thing, just keep momentum on that project. Focus on the next step, one at a time, every week.

Get your team concentrating on just one task and making progress. Yup, it’s hard to do but any change in habit is challenging.
{See the great graphic above that I think captures what we all go through! This is great, this is hard, this sucks… dark swamp of dispair…}