How to evaluate employee performance like an enterprise company

Editorial Team

8 min read
Two women in meeting

For small business owners who want their employees to stay engaged on the job and continually improve their skills, providing employee performance management reviews can help keep them on track.

Talking about strengths and weaknesses, providing constructive criticism, and offering ways to improve can go a long way in retaining and developing top talent.

Clear communication with employees is key, as research by Gallup shows, 70% of variance in team engagement is determined solely by the manager. To illustrate the importance of performance reviews, they give managers the opportunity to talk to their team members about:

  • How their achievements have positively affected the company
  • What areas they would like to learn more about or spend more time working on
  • Any skills the employee should focus on improving
  • The progress they have made toward career development plans

No matter how big your business is, even with one or a few employees, you can enact professional employee performance reviews that can help you effectively build relationships with your team. You can even use examples from major enterprises for how to conduct employee evaluations.

What is an enterprise company? According to the Houston Chronicle, an enterprise company is typically classified as one that has multiple locations, levels, divisions, and/or departments that work together towards a common goal. In this guide, learn how small to midsize businesses can use annual performance review examples from bigger companies to create clear objectives for evaluation and apply similar methods in their own employee performance reviews.

Discussing effective goal setting for employees

In order for employees to understand the quality of the progress they’re making at work, it’s important to talk with your team about what their responsibilities and expectations are and what kinds of goals they have with your company and their overall career. SMART goals can help employees work toward meaningful progress, with SMART standing for:

  • Specific: What specifically will be accomplished?
  • Measurable: How will you measure the goal progress?
  • Achievable: Is the goal reasonable?
  • Relevant: Does the goal align with bigger goals and/or provide meaningful value?
  • Time-Bound: In what time frame is the goal expected to be accomplished?

Upon hiring, you can create career development plans with each employee that map out where they hope to see their career go long term, which is then broken down into smaller goals to achieve along the way. Knowing your company’s objectives, you can identify employees’ interests and skills and give them opportunities to perform tasks that both help your company grow, as well as develop your staff.

If an employee doesn’t yet have the skills or training needed to reach various goals in their career development plan, you can also plan learning opportunities so they have a chance to develop those skills. Learning and development matters to workers today, as a 2023 survey found 84% of workers expect their employer to provide education and training to stay up-to-date with evolving industry trends.

Educating your employees with learning and development can help increase employee retention, while adding more value to your organization. Forbes reports 76% of employees are more likely to stay with a company that offers continuous training.

During employee evaluations, managers can discuss career development plans with employees, identify the need for additional training and support, and discuss how existing skills training has positively impacted the job.

Providing constructive feedback

A culture of continuous improvement means there are always ways to help boost performance. Some employees may not be aware of how their weaknesses are impacting the organization. Discussing them in an employee performance review can help them become more aware.

It’s important to make sure any time you point out negative aspects of an employee’s performance, that you do so respectfully and provide ideas for how to improve. For effective constructive criticism, here are some tips for how to conduct a performance review like an enterprise company:

  1. Provide clear expectations. Before an employee evaluation, let the employee know what they can expect from the conversation. That includes going over both successes and things to improve on. That way, workers will approach the conversation with clear expectations that include receiving constructive criticism.
  2. Talk in person. Direct communication helps clarify the message. You can always follow up a conversation in writing, but face-to-face feedback provides helpful cues into tone and body language that can make a message clearer.
  3. Try the feedback sandwich method. The sandwich technique of delivering constructive criticism is to start the message with positive things to say in a performance review, then talk about the item that needs improving, then end the message with, again, something positive or on a hopeful note. Priming the recipient with positivity can help make the employee more likely to be open to receiving the criticism. Finishing on a positive note can reinforce the value you place in your employee and help motivate them to improve.
  4. Follow the SMART framework. Focus on specific actions that are backed by data. Provide employees with reasonable expectations for how they should improve on a reasonable timeline.
  5. Ask for feedback from employees, too. Because managers play such a significant role in employee engagement, an employee evaluation should be a two-way conversation where workers also have the opportunity to share their thoughts and provide honest feedback. This helps employees feel heard and creates reasonable expectations for improvement for both managers and those they manage.

Employee evaluations should focus on creating solutions that help all parties improve. Begin and end each meeting on a positive note, so employees feel like they can realistically meet expectations in a reasonable timeframe.

Nurturing a growth mindset

One way to make employee evaluation results more likely to be successful is to nurture a growth mindset at your business. To define a growth mindset, university researchers explain it’s a psychological approach that welcomes challenge as a way to continuously improve. A company with a growth mindset culture believes in its ability to grow based on hard work and collaboration.

Opportunities for growth abound in small business workforces. These include:

  • Continuous learning and development opportunities for employees
  • Open lines of communication between managers and those they manage
  • Taking on new challenges and committing to supporting one another to tackle them

In an employee evaluation, discuss with workers how they’d like to grow in their careers and advance with your company. According to the Society for Human Resource Management, a lack of career growth with a current employer is a top factor that influences workers’ desire to quit. Show your employees you’re invested in their growth, and they’re more likely to do so with your business.

Implementing accountability in the evaluation process

At the end of an employee evaluation, employees should have a clear understanding of what’s expected of them and how they’ll be evaluated on their future progress. Accountability measures that are included in a performance report give workers something to reference to stay on track and to increase their understanding of their progress before the next evaluation.

Going back to SMART goals, accountability measures should be specific and measurable. Create key performance indicators that help with how to track and monitor project progress. Some performance review feedback examples include:

  • Increase the number of specific achievements by X% in X timeframe
  • Reduce the number of complaints or errors by X in X timeframe
  • Improve customer sentiment scores by X% in X timeframe

Measures like these can be used as benchmarks for career progression, as well. Give employees visibility into their progress, whether it’s through an online dashboard, weekly manager one-on-ones, or another method of frequent accountability reports.

Fostering a positive work culture

A positive work culture and inclusive environment is more likely to result in improved employee outcomes. According to a 2023 report by Great Place to Work, company culture correlates with:

  • Sales
  • Profits
  • Recruiting efforts
  • Employee morale
  • Productivity
  • Turnover

Initiatives such as career development programs, extra training, promotions, and employee recognition can also contribute to a more positive company culture. Supporting employee well-being and work-life balance with offerings including paid time off, health insurance, and mental health support can also help employees focus on improving their performance for your business.

Evaluating employee performance is easy with the right tools

Employee performance evaluations update workers on where their performance stands, the positive progress they’re making, and areas they can focus on to improve. When delivered strategically with a focus on solutions that drive meaningful results, employee performance evaluations can help support a growth mindset and culture of continuous improvement at your business.

It’s easier to manage employee performance like an enterprise company with the right tools, including your point-of-sale (POS) system. Some business point-of-sale solutions include employee management software integrated with the system. For example, Clover POS systems include employee management software, with features, such as:

  • Detailed reports on sales and development
  • Comprehensive employee record-keeping
  • Time attendance software
  • Integration with other employee performance apps, through the Clover App Market

Why wait? Get started with a Clover POS system today to elevate your business.

This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.

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