Best Practices for UK Small Business Owners to Elevate Their Teams 

As a small business owner in the UK, you know that your team is the backbone of your company’s success and that building a high-performing team is crucial for growth and sustainability.

While there are many aspects to building the team of your dreams, but one powerful tool is to hold regular performance reviews to ensure your employees are motivated, engaged, and consistently striving for excellence.

The Purpose of Performance Reviews

Performance reviews serve multiple purposes, making them invaluable for small business owners focused on having a productive and engaged workforce.

At their core, performance reviews provide an opportunity to assess an employee’s contributions, work quality, and overall performance over a specific period. This evaluation helps identify areas where the employee excels and areas that may require improvement or additional support.

By carefully examining an employee’s performance, you can pinpoint their unique strengths and leverage them effectively within your business. Simultaneously, you can identify areas where additional training, coaching or resources, may be needed to help the employee reach their full potential.

However, conducting effective performance reviews requires careful planning and execution. A poorly executed review can lead to disengaged employees, missed growth opportunities, and a drain on your business’s resources.

Here are some Do’s and Don’ts of successful performance reviews.

Do’s for Effective Performance Reviews

Conducting effective performance reviews requires a thoughtful approach and adherence to best practices. By following these Do’s, you can create a positive and productive experience that benefits both your employees and your business.

  • Do: Prepare Thoroughly – Effective performance reviews start with thorough preparation. Review the employee’s performance data, previous goals, and feedback from colleagues or clients. This preparation will ensure you have a comprehensive understanding of their contributions and areas for improvement. For this, you could gather information on the employee’s sales figures, customer satisfaction ratings, or project metrics so you have detailed, objective examples of their performance to discuss during the review.
  • Do: Create a Positive Environment – Choose a private, comfortable setting free from distractions or interruptions. Often, holding the review offsite can help create a relaxed atmosphere conducive to open and honest dialogue. It’s important the employee feels at ease and respected throughout the conversation.
  • Do: Set Clear Objectives – Start the review by outlining the purpose and structure of the conversation. This sets expectations and ensures both parties are on the same page. Clearly communicate that the goal is to provide constructive feedback and support the employee’s growth, not to undermine and criticise unnecessarily.
  • Do: Listen Actively – Encourage the employee to share their perspective by actively listening. Maintain eye contact, nod, and paraphrase key points to show your engagement and understanding. Active listening allows two-way dialogue and shows respect for the employee’s input.
  • Do: Provide Specific Feedback – Effective feedback is specific and actionable. Use concrete examples to highlight areas of strength and opportunities for improvement. Try to avoid vague or generalised statements that lack substance. Consider: “During the recent marketing campaign, your attention to detail and creative approach helped us exceed our target engagement rate by 15%. However, there were a couple of times where you missed deadlines, causing delays.”
  • Do: Encourage Self-Reflection – Ask open-ended questions to encourage employees to assess their own performance. Ask them what they think went well this year and what areas they think they could improve on. This self-reflection helps them take ownership of their growth and development.
  • Do: Set SMART Goals – Collaborate with the employee to set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals. These goals should align with the company’s objectives and provide a clear roadmap for the employee’s development. Consider: “Let’s set a goal of increasing your sales conversion rate by 10% over the next six months. We’ll provide additional sales training and regular coaching to support you in achieving this.”
  • Do: Offer Support and Resources – Discuss the support and resources the employee needs to achieve their goals. This could include training opportunities, mentoring, or access to tools and technology that can enhance their performance.
  • Do: Follow-Up – Schedule regular follow-up meetings to discuss progress towards goals and address any challenges or obstacles the employee may be facing. Adjustments can be made as needed to ensure continued growth and development.

Don’ts for Performance Reviews

Just as there are best practices to follow, there are also pitfalls to avoid when conducting performance reviews. By steering clear of these Don’ts, you’ll deliver a constructive and motivating experience for your employees.

  • Don’t: Be Unprepared – Entering a performance review without reviewing the employee’s history, achievements, and challenges is a surefire way to derail the conversation. Lack of preparation can make you appear disorganised and undermine the credibility of the feedback you provide.
  • Don’t: Make It Personal – Performance reviews should focus on behaviours, results, and job-related factors – not personal traits or characteristics. Making it personal can quickly turn the conversation combative and demoralising for the employee. Avoid comments like “You have a bad attitude” or “You’re too emotional.” Instead, focus on specific instances where the employee’s behaviour or approach fell short of expectations.
  • Don’t: Dominate the Conversation – While you should come prepared with feedback and goals, a performance review shouldn’t be a one-way lecture. Encourage a balanced dialogue by actively listening and inviting the employee to share their thoughts, concerns, and perspectives.
  • Don’t: Neglect Positives – It’s easy to focus solely on areas of improvement, but neglecting an employee’s strengths and accomplishments can be disheartening. Be sure to highlight their successes and positive contributions to maintain motivation and engagement. Consider: “While we need to address the missed deadlines on the recent marketing campaign, I want to commend you on the exceptional social media strategy you implemented, which drove a 25% increase in website traffic.”
  • Don’t: Provide Vague Feedback – Vague or generalised feedback lacks substance and makes it challenging for employees to understand what they need to improve. Strive for specific, actionable feedback that provides clear direction for growth. Instead of saying, “Your customer service skills need work,” provide a specific instance: “During the recent client meeting, your tone came across as dismissive when addressing their concerns about the project timeline.”
  • Don’t: Skip Self-Reflection – While you should come prepared with feedback, avoid doing all the talking. Encourage employees to reflect on their performance, acknowledging both strengths and areas for improvement, opening the door for personal and professional growth.
  • Don’t: Set Unrealistic Goals – Goals should be ambitious yet achievable. Setting unrealistic or overly ambitious targets can demotivate employees and set them up for failure. Ensure goals are specific, measurable, and aligned with the business’s objectives and the employee’s capabilities. Rather than setting a goal of “Increase sales by 50% in the next quarter,” which may be unrealistic, aim for a more achievable target like “Increase sales by 15% through targeted lead generation and enhanced product knowledge.”
  • Don’t: Ignore Employee Needs – During the performance review, discuss the resources, training, or support the employee needs to achieve their goals. Failing to address these needs can block their ability to succeed and lead to frustration or stagnation.
  • Don’t: Forget to Follow Up – A performance review shouldn’t be a one-and-done event. Schedule regular follow-up meetings to discuss progress, address challenges, and adjust goals as needed. Lack of follow-through can undermine the entire process and make employees feel unsupported.
  • Don’t: Miss Recognising Achievements – Lastly, don’t forget to acknowledge and celebrate your employee’s accomplishments, both big and small. Recognising their hard work and successes is a powerful motivator and cultivates a positive, rewarding work environment.

Setting Goals and Objectives for Future Growth

Performance reviews are not just about looking back; they’re also about charting a path forward. During these conversations, you can collaborate with your employees to set clear, achievable goals that align with your business objectives. By establishing measurable targets, you create a roadmap for personal and professional development, ensuring your team remains focused and motivated.

Ultimately, well-executed performance reviews encourage a culture of continuous improvement, accountability, and open communication within your small business. They provide a structured framework for addressing performance-related issues, recognising achievements, and aligning individual efforts with your business’s overall vision and objectives.

If you invest time and effort into thoughtful performance reviews, you back your commitment to your employees’ growth and success. You will also benefit from having a positive and productive work environment that drives your small business towards success.

Martin Baillie is a Business Coach and Growth Specialist at ActionCOACH Bury St Edmunds, committed to working with business owners to create sustainable, viable, profitable entities within the local community, and creating 1000 new jobs in the East Anglian region through that growth.

If you are looking to increase the profit in your business while freeing up time, and having a better work / life balance, there is no better time to start than now. Our business growth methodology is tried and tested, and we guarantee your results.

Contact Martin Baillie, ActionCOACH Bury St Edmunds now on Tel: 01284 334098. You can also follow him on LinkedIn , Instagram and Facebook