How to Use Performance Reviews to Keep Loyal Employees on Your Team



By Jason Bland, co-founder of Custom Legal Marketing, a law firm SEO company that helps law firms thrive in highly competitive markets.

Performance reviews are underutilized by many small business owners. Those that do prioritize reviews often do them in a way that is offputting and can demoralize their workforce thus causing greater attrition. 

Many years ago, I decided to ignore all of the advice from experts and instead structure our performance reviews in a way that worked for my law firm’s marketing agency. Fast forward to the present, and we have incredibly low attrition and even maintained the majority of our core team members through the challenging COVID-19 years.

Here is how you can use performance reviews to keep your best employees on your team.

Make it a two-way review.

This is the single best thing you can do as a manager or business owner. The employee review should not be one-sided. Sitting in front of you is someone who sees your business, clients, operations, and market with a slightly different perspective. Not listening to their observations is a huge opportunity loss. 

The performance review should be a free space to exchange ideas and criticisms. Allow and embrace criticisms of your operations and your management style, and use those insights to solve problems you may not have known about. 

Your employee should know that their critical feedback can be shared without consequence or defensive posturing. You expect them to take negative feedback as a professional; you can do the same. 

Have benchmarks.

After each review, there should be a list of expectations and benchmarks that you’d like the team member to reach by your next review. This could mean adding a new skill set or maybe encouraging them to use a talent that they have but are not that thrilled about using. 

For example, we have a team member who is an excellent writer even though that is in no way part of her job. But she’s very talented, and she could be using that talent to contribute to our promotional content to help us bring in new clients. So a benchmark for her could be to contribute content to our blog or pitch a guest article with a partnered publication before our next review. 

Give ample notice.

At my company, I’m notorious for requesting last-minute meetings that allow for almost no time for preparation. It’s a professional flaw that I’m working through. But when it comes to employee reviews, give your team members three to four weeks to prepare. 

Let them know the kind of questions you’ll be asking and remind them of benchmarks that were discussed in your last review. This will allow them to show their work and may even shine a light on their areas of growth that you may have overlooked. This is an excellent way to spot budding talents in your team members or identify them as good candidates for future opportunities. 

Make investments where you can, and communicate if you can’t.

When conducting a two-way performance review, you may find that your employees require some investments. 

Your benefits might be falling short of expectations. They might need some tech upgrades to work faster and more efficiently. Or they could be uncomfortable with their current workspace, which could be easily solved with furniture upgrades or food and beverage perks for their in-office work days.

When it comes to one-time investments (tech upgrades, comfort items, efficiency tools), I rarely say no. The value of keeping a great team member on board far exceeds anything that has a one-time cost. 

If your employee is looking for a larger 401(k) match or something that would be a company-wide investment that just doesn’t work with your current cash flow, don’t ignore their request. If it doesn’t work, it doesn’t work. You can offer an alternative benefit or revisit the request at their next review. At that time, your cash flow may be in a better position to support a team-wide investment. 

Either way, communicate with honesty. 

By turning your performance reviews into an open conversation, you can be more successful at keeping your A-list employees on your team. Your willingness to listen and make investments in their professional growth isn’t just good for your bottom line. It helps you cultivate a more positive work environment that is good for you, your managers, and your employees–and that translates to a better customer experience.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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