This time of year can be particularly stressful for businesses. From hitting year-end sales targets to preparing yearly financial reports, the last quarter of the year often presents unique challenges. One of those challenges is executing and utilizing year-end reviews for employees. This important yearly task is used to access performance levels, set goals, and refine strategies for the coming year. In today’s post we share specific strategies to make year-end reviews more helpful to business owners and employees.
1. How are employees creating value for the firm?
One of the key takeaways from year-end reviews is how much value an employee is creating for the firm. It’s vital to understand the role and impact each employee has in value creation. This is especially relevant for small and medium-sized businesses where an employee’s impact is amplified. Benchmarks like hitting sales numbers, number of clients, or other financial figures may be a good place to start. However, these types of benchmarks often create value in the short-term. Examine how employees also create long-term value for the firm. The best employees are able to think long-term and take actions that benefit the firm in the long haul.
2. If a key employee leaves will it cripple business?
Year-end reviews are a key opportunity to understand the current roles in your organization. Throughout the year roles often shift – meaning certain employees might end up carrying a disproportionate set of responsibilities than others. Just as it’s important to rebalance your financial portfolio every year to reflect your goals, it’s important to assess where and what your employee’s roles entail. If a key employee is handling a significant share of the daily business operations, what will happen if that employee were to leave? Is there someone trained to jump in? Will the business be crippled by the loss? Year-end reviews are a great time to sort these questions and realign employee skillsets with appropriate roles.
3. Share your vision and future with employees.
During year-end reviews, the pressure to perform is typically thought to fall on the employee. However, it’s just as important to continue selling your business, growth opportunities, and visions as the employer. Carefully consider where you see the business moving in the coming years and how key employees will have the opportunity to grow with your organization. As the millennial generation continues to reshape the work place, and, as of 2015, is now the largest share of the American workforce, it’s important for managers to consider employee’s careers and communicate clear career paths.
Where do you see the company moving in the next year, five years, ten years? What new opportunities and challenges may arise for the organization? What specific skills would you like your employees to have to handle these challenges? By sharing your goals for the company, you’re helping employees shape their future goals and career trajectories.
4. What strategy do you use to keep and retain top performers?
Similarly to the point above, what key tools will your company use to retain top performers at your firm? The cost of replacing key talent is expensive and time consuming. During the year-end review process, take the time to communicate where you envision top performers moving in the company and how they can successfully get there. Ask employees where they would like to see themselves in their careers in the future. Are there needs for career development courses or tools? If so, how might the company offer these unique benefits to keep top performers happy, engaged and performing?
5. Listen and believe what employees tell you.
Ask employees questions and actively listen to the answers. Too often year-end reviews are a one-sided conversation with employers talking the entire time. This is an opportunity to learn more about your employees, to hear their praise, concerns, and criticism. As the manager, your employees may be less inclined to tell you the issues they have in company culture or in specific duties in their roles. Use this time to ask them to tell you. Create an environment where they feel they can speak freely. Then listen to them and believe what they tell you. Often employees are the ones in the ‘day-to-day trenches’ of the business and have valuable insights to help spur growth or refine efficiencies in processes.
For help in creating a business and financial strategies, contact our professionals at TrueNorth Retirement Services to schedule a free consultation.
TrueNorth Retirement Services is a financial and wealth management firm specializing in personalized financial guidance to local individuals and businesses. Areas of speciality range from basic tax management and accounting services to in-depth services such as audits, financial statements, and financial planning. For a free financial consultation, please call: (801) 274-1768 or email info@truenorthwealth.com.
