As a small business owner you become intimately involved in every area of your company and work closely with most of your employees. There are several perks to this. You gain an intimate understanding of how your company works, understand your clients and their needs, and see the company culture at work on a daily basis. Small business owners do not need to look at reports and analyze data to understand what is happening with their company. All they have to do is walk outside their office.
The downside of this is that daily involvement and close working relationships with employees and clients can make hard decisions regarding performance and effectiveness difficult to make. As women we tend to have greater levels of empathy which can create challenges when making good business decisions that could negatively impact employees. With that in mind I am sharing the following tips when evaluating employee performance and determining whether or not that employee should continue with your organization.
- When was the last time the employee made you money? Whether in sales, service or administration every employee should make the organization money. For the sales team the measurement is easy. What new accounts have they brought in? For service staff ask what revenue have they generated from maintaining client relationships. Administrative staff contributes by freeing up time for sales and executive staff members to generate revenue. If the administrative staff is incompetent they will continue to demand the time of those they support, making them ineffective in revenue generation. Every employee should be evaluated by this matrix on a regular basis. Determine prior to hiring them when this evaluation will occur. Quarterly works well in my experience.
- Do they fit within the company culture? Company culture is something to be guarded zealously. It impacts the customer and employee experience and one bad apple can ruin the bunch. Make sure that each employee positively contributes to the company atmosphere. If you find that other employees attitudes are suffering or they are more stressed or confused in the presence of a particular employee it is probably time to let them go. Do not wait too long to make this decisions because once company culture has been sacrificed it is difficult to repair.
- Are they competent at what you hired them to do? It is very easy to hire an employee for a position, find they excel at certain aspects but ignore their lack of ability regarding aspects of their position. Remember you hired them to do a job, to fulfill specific duties. If they can only perform on a portion of their duties they are not the right fit. Regardless of how much you like someone it is not financially responsible to continue employing someone to do only a portion of the duties you need them for.
- Does the employee only do what they are told or do you find them going above and beyond what is asked of them? Employees that take the time to apply themselves, improve their skills and hone their trade are invaluable. These are the people you want to mentor and promote when opportunities present themselves. As a business owner your time is limited so invest in those that are willing to also invest in themselves.
- Are they a champion of the organization? I have worked with people that have worked for the same company for decades. They live, sleep and breath the company. They wear company brand-ware on the weekends, talk to their friends about new and exciting things at the office, and are excited when Monday rolls around. These employees are worth their weight in gold because of one word: loyalty. They are worth your time and nurturing because they will return that time with loyalty that cannot be valued by an hourly wage. They will stick with you through challenging times and be willing to learn additional tasks and cross train as needed because they believe in the vision.
- How do you feel when they request a meeting? Be honest with yourself on this one. Remember you own the company. If you do not enjoy meeting with one of your employees, avoid seeing them and generally feel down simply by being around them let them go. It is simply not worth keeping them in your employ and if you feel this way the rest of your team probably does as well. However if you look forward to hearing their ideas and solutions, leave the meeting feeling energized and have a smile on your face this is someone you want to have around. Do what you can to encourage open communication with these employees and keep them engaged. Good attitudes are contagious and will be felt by the team at large making your company a more enjoyable place to work.
As a business owner it is critical to ask yourself these questions on a regular basis. Smaller companies are greatly influenced by the attitudes and interactions between employees. Since the team is smaller every person makes a great impact. Your job is to evaluate, recognize and encourage high performance, great attitudes and loyalty. Invest in these people, bring them up within your organization and grow your company with them. For the rest – remove them from your organization because their negativity will bring you and the rest of the team down. Delaying your decision to let them go will only create an opportunity for the negativity to grow and influence others.
Being a business owner requires decisive leadership. Be truthful with yourself and follow your instincts. Intuitively you will know which employees to love and which to leave…
Bethany Wood
Bethany Wood is a serial entrepreneur and has started several successful companies in a variety of fields including manufacturing, distribution, consumer goods, financial services, marketing and consulting. She is currently the President of SEI International and has business interest in the US, India and China. As an entrepreneur Bethany is constantly finding opportunities to expand SEI’s holdings and as a business owner she is continually learning new ways to improve business performance. As a writer Bethany contributed to and edited the Back to Basics management book.
Follow Me:
Thanks for the advice. As a new business owner, I am trying to figure out when to bring new people on and to track their growth in the company. I have found that with a small company you sometimes have to ask someone to wear many ‘hats’ and that can make it challenging to track their performance. This article has been insightful on the matter.
This can be challenging for many people. I would recommend that you start by hiring people that can either generate revenue or free up your valuable time so you can bring more revenue into the company. Service is important but it takes cash flow to support those positions so I typically suggest that sales associates where the service hat until enough revenue is generated to warrant additional support staff. Good luck!