Many years ago, we used to call it “Job Description.” In these days of empowered employees, the term “job description” is non-existent. Today we call it performance expectations.
Since you are running a small company, you may think, “I may get by without using performance expectations (or the old-fashioned job descriptions)”. Yet, even for your small company, you need some degree of structure in your employees’ jobs. Performance expectations would provide you that structure. And, if used correctly, it will provide a loose but reliable framework to help the employee focus on the results of his activities, not on the activity itself.
That’s the key difference between job descriptions and performance expectations: Job descriptions focus on the activity of the position; performance expectations focus on the anticipated results. 
For example, say a typical job description states that a salesperson is responsible for selling the company’s products at the set prices, writing sales orders correctly, and making sure that the sales orders are submitted within a specified time. A performance expectation would require the salesperson to represent his company professionally (it would define the word professional), build ongoing relationships with customers, and assist the entire business team in realizing the specified departmental goals. Writing performance expectations is not as difficult as you may think.
Here’s how the writing process works:
Include a brief explanation of what the position’s objective (or mission) is and how the position relates to the business’s overall mission. This explanation should appear at the beginning of the performance expectations.
Describe the position’s location on the organization chart. Include the immediate supervisor’s title and the positions (if any) of those being supervised.
Define the performance evaluation process. Who will perform the evaluation, when will it be done, and on what basis will the employee’s performance be appraised?
Concentrate on output, not activity. And be careful not to limit the ways in which the job can be accomplished. Define the responsibilities and allow the employee the freedom to make the job work.
Be flexible. The world and your business will change, and your performance expectations need to change right along with them.
Reviewing an employee’s performance
The biggest problem with performance reviews is that the typical entrepreneur perceives the review as an opportunity to criticize the employee’s performance rather than to improve it. Of course, criticism of past performance may be part of the review process, but so is the positive critique of performance. Everything you do in the performance review is a means to improving future performance, not punishing or complaining about past performance.
Ensuring a successful review process
Good performance reviews don’t just happen. They evolve as a result of a well-defined evaluation process that includes:
Writing performance expectations: Before you even hire an employee, you must establish written, meaningful standards by which to measure performance.
Setting goals: You must work with each employee to establish - and agree on - applicable SMART goals. You should develop these goals as soon as the employee is comfortably settled in her new job.
Creating critical-event memos: You must document all critical events in an employee’s day-to-day performance and file them in the employee’s personnel file at the time they occur. That way, you can use them at review time to add objective support to your subjective observations.
These critical-event memos should include occurrences of positive as well as negative behaviour. Because the purpose of reviews is to improve performance, you can usually earn more motivational mileage by pointing out the employee’s successes than you can by itemizing her failures.
Providing interim feedback: In between performance reviews, you should informally and regularly give employees feedback. Thus, by the time the next performance review comes around, the employee shouldn’t have any surprises. If you’re consistent in providing feedback to your employees, you’ll give them plenty of time in between reviews to work on improving their behaviour.
Conducting the annual performance and salary review: Now’s the time to compare actual performance with expectations and goals, review critical-event memos, assign new salaries, and agree on bonuses and perks, all while discussing goals and expectations for the future. Remember that the purpose of all these tasks is to motivate the employee to improve her performance in the upcoming period.
Scheduling the follow-up review: You should hold follow-up reviews either quarterly or semi-annually (if the situation is dire enough, you can hold them monthly until the employee’s performance has improved to your expectations). These follow-up reviews should be informal but well prepared, and during them, you need to provide feedback on the employee’s progress since the annual review.
Holding effective reviews
The employee evaluation process is a natural progression that begins with performance expectations and goal-setting and ends with the performance and salary review and the follow-up review. The performance review itself is but one piece of the process; without the other pieces,the evaluation is incomplete. Don’t expect earth-shattering results from performance reviews if you aren’t willing to adopt the entire process.
Following are guidelines for providing effective performance reviews:
Hold the review once a year. Conduct the review on the employee’s hiring anniversary or sometime around the beginning of your business’s fiscal year.
Schedule the review well in advance. Give both parties plenty of time to prepare. No phones, no interruptions. Go off-site if you expect the review to be stressful.
Prepare for the review with thoroughness. Treat it as an important business meeting. Keep in mind that reviews are benchmarks in the employee’s career.
Begin each review with a generous helping of compliments. Cite specific accomplishments and good work. Get things off to a positive start. Reinforce the intent of the review early - to improve the employee’s performance.
Evaluate the employee based on the past year’s performance. It should not be just the past fewmonths. We’re talking careers here, not short-term trends.
Back up subjective comments with objective facts and stories. These should come from the critical-event memos you’ve retained in the employee’s personnel file.
Keep it a performance review, not a character review. Keep personalities out of it. 
Discuss changes in salary after you critique the employee’s performance. Yet it should be before you solicit feedback from the employee about the company. Ask how he feels about the way the company is being run and what aspects could be better managed.
You won’t get frank feedback from most employees until they have the assurance - in the form of a pay change commitment from you - that negative comments won’t get in the way of their pay increase. But if you discuss pay changes first, the employee may not be in the mood to listen well to the review.
When no pay increase is on the agenda, make sure during the course of the review that the employee knows exactly why an increase won’t be forthcoming, and then conclude the review by asking the employee if he understands why.
Also, be sure he knows when the next opportunity for pay increases will come and what he (and the business) must do to get his performance up to the level where he can expect an increase.
Dealing with failure
The best way to judge the immediate results of a performance review is by observing and asking how the employee feels about the review and change in compensation. If the employee is visibly upset and goes away angry, the review is a failure. If he goes away appearing to be motivated, the review is a success.
If the review is a failure - if you perceive that the employee doesn’t go away motivated - one of two things may have happened:
You didn’t conduct the review correctly. If this is the case, you can try again a week or so later - after upgrading your presentation and explaining to the employee that you made some mistakes you’d like to correct. Yes, bosses and owners are human; they make mistakes, too!
You performed the review correctly, but the employee falls into the category of people who simply can’t take criticism, constructive or otherwise. If this is the case, the employee may not be the right person for the job. Observe the employee’s performance over the next few weeks to watch for signs of improvement. If you don’t see any, you may need to schedule a formal follow-up review or start considering termination.
Terminating an employee
Terminating an employee, as much as you’d like to avoid it, has its place in the growth of a successful business. A small business cannot afford to carry for long a handful of non-performing employees on its payroll. On one hand, it’s a financial burden. On the other hand, its not fair by the rest of the employees who are performing.
Most employees know when they’re not performing, and they’re usually as unhappy in their jobs as you are in having them there. Yet, they’re too afraid or insecure to make the first move, leaving the difficult work to you.
(Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a business consultant, freelance newspaper columnist and a writer.)
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