MBA1072 How to Evaluate Your Employees + Free Ride Friday!

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Alright, let's jump into today's episode. Heyo. Welcome to the $100 NBA Show. A lesson a day keeps the doubts away with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online and in today's lesson you will learn how to evaluate your employees. This is going to be a very tactical lesson on how to value employees but also what to evaluate them on. I actually picked up the strategy from Nicole Baldunu, my co founder and business partner and partner in life. She fleshed out this amazing system so we can evaluate our employees properly and I want to share it with you today. This is going to make things so much more clear. You're going to get so much clarity on exactly how to evaluate what to evaluate on as well as the fact that your employees will know what they're going to be judged on. They're actually going to know how to do a good job, what they're going to be assessed on, when it's time to evaluate them. We're going to go through the whole system in today's episode. So let's get into it. Let's get down to business. The first step in evaluating your employees is setting up the right criteria. And that starts with some documentation. Now this doesn't have to be, you know, pages of pages of documentation. It could be one page. You need to create a document for each position in your business. For example, a customer service agent. We're going to create a document just for this position. And on this document we're going to write down two things. Or you can have two columns. The first column is going to be KRAs and, and that stands for key responsibility areas. And the second column is going to be KPIs, and that stands for key performance indicators. We're going to get into those in a moment. But for now, know there's two columns, Responsibilities and performance Indicators. So what you want to do is create a list of responsibilities. What does this employee have to do? What are their responsibilities every day? So for a customer service agent, it'd be, you know, serving our customers in a timely fashion. That's the responsibility. Creating support tutorials, testing the product. You get the point. These are areas of responsibility. Now, against each KRA key responsibility area, we're going to list some KPIs. Key performance indicators are basically, how will I know that the responsibility will be fulfilled? What are the indicators? What are the clues? What is the proof really that this is happening? So if a responsibility is serving your customers appropriately or properly or efficiently, then a key performance indicator would be their satisfaction rating has to be at a certain percentage. You can easily go into your customer service software and see if they're hitting that KPI. So not only do they know what to do, but they also know how to find out if they're doing it. Now the point of this documentation, having this list of KRAs and KPIs is so you can give it to the employee so they can self assess before their evaluation. There are no surprises here. They know exactly what they're going to be evaluated on and they know exactly how to pass the evaluation with flying colors. This helps them get prepared for this evaluation well in advance. So you want to create this document and give it to them when they start the job? Ideally. But if you already have employees in place and you want to create this document for them, no problem. Give it to them asap. So when the next evaluation rolls around, they know exactly how they're going to be evaluated. Now the next step is that you basically want to find out through the KPIs if they are actually hitting the mark. Are they actually fulfilling their responsibilities? Usually this is a yes or no. If it's a salesperson, are they hitting their sales goal? Yes or no. What about churn? Is churn at the percentage? It should be yes or no. Now what we like to do in our company is we like to set up a meeting. It could just be a video call. Now in their first year, we do three month evaluation. So every three months they have an evaluation. This is because their first year is really critical. We want to make sure they're on the right track and they're being trained properly. Also, that first three months is called a probation period for us where both parties get a chance to get to know each other and know if they're a good fit for each other. Past the first year, we have evaluations every six months. So in these evaluation meetings, whether it's every three months or every six months, we get on a video call and we have this document in front of us and we go through it and this just becomes a transparent conversation. When they hit their KPIs, obviously praise is due, right? Great job. You're doing a fantastic job in this area. When they don't hit the KPIs, you have to find out why. Why are you not hitting your KPIs? What's stopping you from hitting your KPIs? You want to hear from them as much as possible. Hear, hear from your actual employees. What are some roadblocks? Maybe it's something they need to work on. Maybe it's something that you need to change in the business. Maybe something is hindering their progress. Once you get some information, then let's talk about solution. You want to have an action plan. Come up with an action plan together how they can meet that KPI, the next evaluation. So basically it's like a training program. Here is the training program or the things we need to do to get to that mark to get to the point where you are hitting those KPIs for this area. That way at the end of the evaluation, the employee goes away with knowing exactly what they're doing well and what they should keep doing as well as an action plan to improve upon the things they're not doing so well. This is all rosy and dandy, especially for the first evaluation. The second evaluation is where you Know the truth really lies because now you're going to evaluate how they have improved upon the KPIs that didn't hit. Also, are they keeping up with the KPIs they hit last time? So if they're keeping up with the KPIs they hit last time, great. What about the KPIs they didn't hit last time? If they're still not hitting that KPI, the first question's got to be, well, how did you do with the action plan, the action plan that we put together so you could hit that KPI? What have you completed from that plan? What kind of training did you do? If nothing was done, then you have a different problem on your hands. You have somebody that maybe is not taking the job as seriously as they should or putting the effort they need to, to become the type of employee or be the caliber of employee for your company. And this is where there is a tough decision here. There's a tough discussion. Now obviously you don't want to be quick to reprimand, but you have to address the fact that, hey, this is an issue. This is the second time we're going around here where this KPI is not being met. We had an action plan. The action plan was not completed. What else can we do to hit that KPI? They need to take responsibility. Basically what you're trying to do here is you're trying to give them everything they need in order to hit that KPI and the ball is in their court. If they continue not to hit those KPIs, then you need to have a frank discussion on why, why is this happening? And maybe through the discussion you'll learn the KPI maybe is too ambitious for them. Maybe you have to go back to your team and find out if this KPI is really necessary to be this high or this stringent. Or maybe it is the standard you need and this employee is just not hitting that standard. The beauty of the system is that everything is transparent. The employee knows exactly what the responsibilities are, what their key performance indicators are, what they need to do to get to those goals. You're having open, transparent conversations in these, you know, quarterly or six month meetings and you're working together on a plan to hit KPIs. They're not. Now, most of the time, people will improve, they will surprise you, they'll get better and they'll grow in your company. And that's exactly what you want. They're gonna put in the effort to make it happen, but sometimes they just don't hit the mark for several reasons. What do you do when they're just not hitting the mark consistently? You've exhausted your efforts and you're just left with somebody that's just not hitting their goals.

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Here's the reality in business, not everybody is going to be a fit for your product as a customer and not everybody's gonna get a fit for your business as an employee. They're just not gonna be a good fit for your team. People don't like to say this, but when you are an entrepreneur, you will realize that not everybody has the same skills. Some people just don't have the skills to do the job you need them to do and they don't have the ability to acquire those skills. And at that point, you just have to cut them loose. And this is one of the hardest things to do. It's hard to let go of somebody that might have a great attitude and is a good team player and you just genuinely like the person. But if they can do the job they're hired for and they can't skill up to get to that point, or maybe they're not willing to skill up, then it's okay for you to say we're not a good fit. We have to say goodbye and part ways. Your job is to just do everything you can so you can avoid this. But at times you're going to have to face the facts and do this and actually say, you know what? We're not a good fit. I think it's time for us to part ways. Hey, nobody said business is easy. This is one of the harder things I have to do as a CEO. Luckily, it's not that common, but it does happen, and it has happened to me in the past. And it's so hard because you've built a relationship with this person. You understand how important this job is to them and their family. But you're doing your whole team a disservice and your customers a disservice. You're only as strong as your weakest link. But luckily, you have a system now. You know exactly how to evaluate them, what to evaluate them on. You have the documentation in place and it's transparent. So you're good to go. That wraps up today's lesson. Thank you so much for listening. Today's episode's not over, though, because it's Free Ride Friday. I got to give away a lifetime membership to one of our courses. Today we're giving away easy course. Let's see who won this week's Free ride. And the winner is. Reggie44. Reggie44 says awesome, awesome, awesome. Omer does a great job breaking down topics in 10 minutes that people write whole books about. You can listen to this on your way to work on the treadmill or the bathroom. I love the brevity and the power of the podcast. It's made me money and helped me think more clearly. Well, thank you so much, Reggie, for that awesome review. We really appreciate your listenership and for the awesome feedback. It means so much to us. It helps me keep on going and get on this mic and record every day. Well, your mission is to email us over at Omar100- MBA-NET so I can hook you up with easy course, a $500 course, free access to it, because you are a free Hour Friday winner. Guys, if you haven't Left us an iTunes rating review yet, do so now and you enter our weekly random draw automatically. Before I go, I want to leave you with this. One of the hardest things about being an entrepreneur is making decisions. Hiring and firing is one of those things that are, like, high stakes, but at the same time, you know, it's so important. And it's not only high stakes for you, but also for the employee. You're either going to give them a great opportunity that may change their life, literally change their life, or you may have to make a decision to say that opportunity is over, which is not fun to do but needs to be done for the greater good of the business. Being mindful of the fact that you're going to have to make these decisions, help you make these decisions. All right, I'll check you in Monday's episode I'll See you then. Take care. Of.

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