The SMB Guide to Quick But Effective Performance Reviews

Performance reviews are necessary from time to time, but no one likes doing them. They’re time-consuming, and stress-inducing.

The thing is, they don’t have to be. If you do them right, they can be a powerful tool and an opportunity to build employee satisfaction and business growth and align individual efforts to your organization’s goals.

Many small businesses (SMBs) struggle with reviews because they stretch their already limited resources. They see them as overwhelming or unnecessary and often don’t have the HR expertise to execute them anyway.

This guide is here to change that. We’ll explore why performance reviews benefit small businesses, how to streamline your performance review process, and some things you can do today to make the process faster and easier to implement.

Why performance reviews matter for SMBs

Many small businesses believe that performance reviews are an extravagance or simply don’t have the time or manpower to execute them. This is a common belief, but a mistaken one.

Structured feedback helps employees feel heard and valued, which helps with both employee engagement and retention. A 2022 study showed that 80% of employees who say they have received meaningful feedback are more fully engaged with their work.

Performance reviews give SMBs specific advantages:

• Cost-effective retention: It costs far less to keep good employees than to hire new ones. Regular feedback helps you spot and address issues before they lead to resignations.
• Better resource allocation: When you understand each team member’s strengths and areas for growth, you can assign work more effectively and identify skill gaps.
• Clear communication: Regular reviews create structured opportunities to align expectations, discuss career development, and ensure everyone understands their role in company success.
• Data for decision-making: Reviews provide concrete data for making informed choices about promotions, raises, and development opportunities – especially important when resources are limited.

The key is to plan and implement your performance reviews in a way that makes the most out of the resources you have and leverages your business size as an asset rather than a roadblock. With some planning and forethought, even small teams can plan and execute performance reviews without burning through their budget or HR capacity.

Streamlining performance reviews with SMBs

Start simple and start small. Having ready-made resources and tools can give you some quick wins and help you make the most out of what you have.

Here are some ways to get started:

1. 1. Templates: Pre-built performance review templates can give you a standardized, consistent process to follow that makes it easy to track employee progress
   2. Scheduling: Arrange check-ins quarterly, and use automated tools to help keep managers on track
   3. Goal Setting: Work together with employees to make manageable, time-bound goals with employees

Performance management tools can keep the process simple by automating recurring tasks like notifications and documentation.
These tools often have centralized dashboards to give you real-time tracking and reporting, so you can have all your feedback data in one place and make actionable decisions based on them. A 2023 report by Gartner found that SMBs using performance management software saw a 15% increase in employee productivity.

Key components of an effective SMB performance review

A performance review process doesn’t have to be grand or complex, but it does have to be complete.

Performance reviews that collect quality data and get actionable information come down to focusing on the right elements. They need to be both efficient and meaningful, making every review count. For an SMB, it comes down to these core elements:

Simplified metrics

The data you look at should balance qualitative feedback with quantitative metrics that give you a complete view of the employee’s performance. For a sales team, it might be sales conversions. For customer support, it might be response time. For marketing managers, you might look at their social media engagement or email open rates.

Continuous feedback vs. formal reviews

Both ongoing feedback and formalized, sit-down performance reviews play important roles in an employee’s development and career growth, but they serve different purposes. One seeks to address issues as they happen, and the other involves comprehensive evaluations and goal-setting.

Continuous feedback identifies performance issues early on before they escalate into major problems. They keep performance goals on track with minor adjustments and help build stronger employee-manager relationships. They’re also less anxiety-inducing than formal reviews, for both parties.

Formal reviews, on the other hand, provide a structured evaluation process and set clear goals for a certain period.

There are ways you can make both of them work together in synergy:

• Set up a basic structure: Set up quarterly formal reviews, then plan weekly or bi-weekly check-ins afterward. Use automated reminders to stay consistent.

• Document reviews: Keep notes from your regular check-ins, and store the feedback in a central system where you can access and reference them easily

• Balance the approaches: Use ongoing feedback for immediate concerns and wins, and save the big-picture discussions for the formal reviews.

The goal here is to create a feedback system that works for your team size and culture. Small businesses often start with monthly check-ins and quarterly reviews, then adjust the timing as they go along.

Aligning reviews with business goals

The feedback you give employees should be tied to clear individual objectives tied to broader company business goals.

Here are a few examples across departments you might consider:

Sales

Company goal: Increase market share by 20% in small business segment

Individual performance metrics for a sales team would involve:

• SDR outreach targets: 100 qualified SMB contacts weekly
• Sales rep conversion rate: 25% of SMB demos to closed deals
• Account manager retention: 90% of SMB accounts renewed
• Response time to SMB inquiries: Under 3 hours
• New SMB product adoption rate: 40% uptake of add-on services

IT Department

Company goal: Improve system uptime to 99.9%

The metrics you look at in an IT department would contribute to the smooth running of your SMB’s digital infrastructure:

• System monitoring: 24/7 coverage maintained
• Issue resolution: Critical problems fixed within 1 hour
• Preventive maintenance: Weekly security updates completed
• Backup success rate: 100% verified daily
• User satisfaction: 95% positive feedback on help tickets

Human Resources

Company Goal: Improve employee retention by 25%

The metrics you collect from your feedback sessions should tell you how long employees stay with your company, and why:

• Time to hire: 30 days or less
• New hire satisfaction: 90% after 90 days
• Training completion: 100% within the first month
• Performance review completion: 100% on schedule
• Employee satisfaction survey: 85% participation rate

In each of these examples, the individual metrics support your organization’s broader goals. They measure how daily employee tasks add up to bigger accomplishments and the overall success of the business.

Actionable steps to start today

Creating a performance review system from scratch is a daunting prospect for an SMB already strapped for time and operational manpower. It becomes much more manageable if you start with small actions and build from there.

Step 1: Define your review cycle

Decide on quarterly or biannual reviews, and schedule periodic check-ins in those interviews to monitor progress.

Step 2: Use templates

Use customizable performance review templates to standardize the process and make it easy to implement.

Step 3: Co-create measurable goals

Discuss clear, actionable metrics and expectations with employees, then reassess those during your regular check-ins.

Step 4: Use automated reminders

Workable’s automated check-ins and scheduling can help you stay on track with regular feedback sessions and record-keeping.

Step 5: Schedule regular follow-ups

Take time to sit down and chat with your team members to review their progress, and adjust any goals as needed.

Small and quick reviews lead to long-lasting results

Performance reviews can be a powerful driver of growth and create a foundation for a successful small business with happy and fulfilled employees. Create document templates and procedures to make the review process simple, arrange regular review sessions and check-ins, and tie the metrics and data you collect to your overall business goals.

Workable’s performance management tools are a scalable and cost-effective way for your small business to build, schedule, and act on performance reviews while keeping your process streamlined and simple. Start a free trial today and see for yourself how a little can go a long way.