Episode 275: The Bottom Line - Quarterly Performance Reviews

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Welcome to The Bottom Line, a new weekly podcast series that we drop every Thursday to complement our weekly Monday podcast interviews with industry leaders.

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I value your time and attention and will do my very best not to waste it.

Just get what you need and go.

So with that, let's get into today's episode.

Hey everyone. So I was having a Voxer exchange just a little bit ago with a client, Cody. And he was asking me for a little bit of feedback and just some nuance around quarterly performance reviews. So I'm recording this second week into Q3. Typically, you want to try to do your quarterly reviews with your, your team members at week 13 of a quarter, or week 1 of the next quarter. But he's getting started and running the business on a quarterly cycle. So really proud of him. For that. But he asked me a couple questions, and I thought about trying to figure out how to just voxer, uh, and take the voxers I sent to him and put it on the podcast. But I thought, you know what, I'll just shoot an episode for all of you to give you a little bit of specifics. Now, in our Facebook group, I actually just put the asset for the Quarterly Team Performance Analyzer in that group. So for those of you that are in our group, you'll be able to, to get that asset. But Now, look, I'm not the best at some of the softer, soft skills of things. And so having a structure to go off of has helped me. But there is a few little nuances that I share with him that he shared back with me that he thought was helpful. Number one, whenever you're asking your team to do this, you want to send the document or the asset to them about a week prior. As entrepreneurs, business owners, we're able to think on our feet really quickly. And so we don't really need the time. But oftentimes our team members need a little bit of time. So that's one little best practice I would share with you, is to give them a week to be able to think through, self-assess based on the results that they performed, their results and their performance. How well did they do relative to the core 4 values that you have in your organization over the past 13 weeks? Okay, then you will be able to have that, get that a couple days prior to the time that you're actually doing the quarterly review, and then you'll be able to give your own agent or business owner leader assessment as well. Okay. Well, that's actually really helpful. And then what you want to do is after you have the discussion, you're going to ask them to give them— they're going to give themselves a self-rating. And one thing that we're actually going to change on the template is you've got 1 through 5. So 5 is a top performer, 1 is significantly underperforms, 3 meets expectations, 2 needs improvement, and then 4 exceeds expectations. Okay. So a few things with this. I would encourage you to have them to be able to give like fractions or points. So instead of like, for instance, 3 and 4, well, there's a lot in between that. So like they could self-assess themselves or you rate them 3.1. Well, that's a big difference between 3.1 and 3.9, right? I mean, it is. They both start with 3, but one's a lot closer to a 3 versus a lot closer to a 4. The other thing is, is you really want to get them to be able to understand that you're comparing themselves to themselves. So even if you have two people that are in sales positions, they're going to want to know, well, what did you get as a rating? I got a 4.1. What'd you get as a rating? I got 3.7. They're going to start comparing. It doesn't matter. What matters is their rating compared to themselves. The other thing is, and this is what, um, Cody had shared, was Oh yeah, I mean, I was going to give them like 4.5s or almost 5s. The problem with that is, is you're basically saying you have no room to grow whatsoever. So like, you do everything perfect, you exceed all your numbers. Well, if you're— they're exceeding their numbers by that much, then I wonder if your expectations are too low. Uh, they have no room to grow, and that's not a great place to be. The other thing is we discredit the idea of meeting expectations. Which means that you as the owner of the business were so clear in the expectations that this person needed to perform over the last quarter, and then they met those expectations, which by this rating is a 3. Well, some people would look at that and go, oh, that's, that's not so good. I think that's incredible that you actually met expectations. A lot of times, I mean, there's businesses and team members who are going around all the time that do not meet expectations at all. Like, if you could just get to a point to where your team is meeting expectations, how great would your, would your small business be? That's a huge thing. All right. Versus, oh, we got to, you know, as he was saying, I just wanted to be nice because I really like my team and I was going to give them a 4. It's like, so you're saying that there's no ability for them to grow? And so he was sacrificing being nice as opposed to really actually coaching. Okay. So those— hopefully that nuance really helps. And of course, you'll get the asset to be able to do this. And what happens with this is this allows you to start stacking quarterly reviews so that when you get to December, maybe January, and you're doing an annual review, you can base raises off the performance of the organization But in addition to that, based on how well they performed individually. Okay. And again, it's important for you to share with the team. There's no comparison whatsoever here to other people, even if they're in the same position, because they're running their own race. And what you have to avoid— I encourage you to avoid— is comparing. Well, I gave this person that, so I don't— I need to make sure that I give this person at least this. It doesn't matter. It just doesn't matter. You're evaluating them based on themselves. So when you do this for the first time, you're setting the baseline for themselves. So if you give somebody a 3.2, you know, they're going to say, well, I don't have perspective on that. Is that good or is that bad? It's just the number. It's just the number for this quarter. Now, here are the specific things I want to see from you, whether it's numbers-based, KPI-driven, subjective, the way they carry themselves, the way that they show up to work. Their attitude, the way that they embody your core values, all of those type of things. Here's the specific things I want you to work on this quarter to begin to kind of get your rating up. And so what you could say is, well, I would have given you a 3.7 in this area or overall, but truly, uh, you know, based on the performance here, I'm going to give you a 3.4. They're like, okay. Now here's the key thing. At the very end, and this is what you don't necessarily have to tell them the first time you do this, but then once you start doing it, they're going to get accustomed to it, is have them assess you. What a better way to show how to handle feedback than to actually show them how to handle feedback. And that means your willingness to actually accept feedback from them. But my guess is They love you to death. They think you're amazing. You're a great boss. You're a great leader. And so they're going to give you some ridiculously high number. They're going to give you a 4.5 or whatever. They're going to say, oh, you were a 5. You know why? Because they're intimidated. They're scared. They don't want to, they don't want to be honest with you. They don't want to say, well, you know what, he or she didn't really show up the way in their role. Your role as the business owner is very different than their role. Very different. We know that, but you still have a job to do. You have to still have a job to share. And so, you know, what you'll see is they may give you some ridiculous rating. And so the first time I did this, you know, team did it, and we're like, oh, you know, you— I think you were a 5. One person said that. Like, are you kidding me? 5? I'm not a 5 at all. And I self-assessed at 2.4. They were like, 2.4? And then I gave them reasons. Specific reasons. And I said, here's why I'm a 2.4. This is why I'm self-assessing at, at that number. Now, that's not a license for you to give yourself a low number just so you can hear all the things about them telling you how great you are. That's not what we're doing here. It's an honest assessment to say, this is my role in the organization. I did or did not live up to that. Now, if you did If you did and you're a humble person and you actually say, no, I think I did, then give yourself an accurate rating based on that. Okay. So if you feel like that you really exceeded your expectations, you kind of went above and beyond for your team, then give yourself a 4 or 4.2 or 4.1. But if you felt like, you know what, I think I met expectations this quarter, then maybe 3.2. And then you get your team to begin to kind of see your ability to self-assess yourself. In a very honest way with very specific things, then you're able to do this. I'll tell you, the feedback I've gotten from business owners about this has been the fact that it has forced them, as they then begin to project for the next quarter, to be very clear with the team members on what is expected of them. Because what's happened, or what typically happens, is we get very ambiguous with our expectations. And so it's like, oh, we can measure that, so I can be specific in this number. But then there's all of the other things about how people show up, their actual performance, and that is what tends to be the area that it gets real murky. And we want to share, we want to be honest, but we kind of realize we didn't do a good job of being specific in our expectations, so then we shy away from it and we don't necessarily do the hard work. And it's been my experience anyway, for me personally. So Anyway, got the, got the template there. If you'd like the template, join our group. Love to have you in it. But hopefully regardless, it gave you some things to consider. And then even if you, if you're not the one, if your organization's big enough, you have other leaders that are doing this, then that template will be able to, to be helpful to you. And of course you can make it your own as well. So anyway, hope that served you. Have a great day. Lead well.

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