Strategic Performance Management for Small Business
using the SBDC Focus Four System Tools

As a small business owner, do you dread annual performance review time? Likely, your employees do as well! What if there were a better way? A way to connect positions and performance to company purpose and values as well as attract and retain top talent? You can do all this using Focus Four tools to simplify and super-charge your performance management process.

Focus Four is a small business operating system developed by the Michigan SBDC Growth Team to guide clients toward growing their businesses faster, better, and smarter. It is comprised of four modules or focusesVision, Strategy, Execution, and Cash Flow. This unique system aligns each of these elements with a meeting structure to facilitate achievement and accountability. The items referenced in this article are part of the strategy focus. Please contact us for a free template for any of the tools mentioned.

Three tools are key to developing a thorough and effective performance evaluation process:

  1. The Accountability Chart: Where does this position fit in the company’s organizational structure? How does this position contribute to the success of the company? Similar to an organizational chart, this tool lists the top five roles for each position, which directly transfer to the job description and thus, the review process.
  2. The Job Description: What are the roles and responsibilities of the position? Assign a measurement to each of the top five roles noted above. Managers can use these targets to evaluate the individual in that role and ensure they are meeting expectations for the job. Briefly list specific tasks or steps under each role. These items will later provide the beginnings of your process documentation. Conclude by completing standard job description sections (classification, salary, hours, education/experience requirements, etc.)
  3. The FIT Matrix: This simple tool was designed to help employers get the “right people in the right seats” by evaluating individuals according to company values, position roles, and FIT: Can the person Fulfill the requirements of the position, Integrate with the company team, and Thrive in the role according to their personal motivations?  Assign a number (1-4, with 4 being best) to each item on the FIT Matrix and total these to compare an employee’s current score to previous evaluations.  BONUS: Use the FIT Matrix as indicated to evaluate individual candidates when hiring for a position! Either way, you are ensuring current and potential employees are compatible with your company culture and strategy as well as their own talents.A few additional tips on conducting effective performance reviews:
  • Once is not enough! Annual reviews have gone the way of the dinosaur…common today are bi-annual and even quarterly reviews. By increasing the frequency of reviews, you can stay current on goals and concerns—addressing issues before they accelerate. Schedule reviews on your company calendar NOW so no one “gets too busy” to address this important task! Hold managers accountable for reviewing their direct reports; this should be part of every manager’s job description.
  • Manage what you measure! Managers should have assigned SMART goals to each employee for the review period being addressed. Discuss those targets, note progress or shortcomings, and determine next steps. Be sure to write these where indicated on the FIT Matrix for future reference.
  • Set goals for next time! Assign new SMART goals for the period going forward, along with any training/professional development you feel the employee needs. Also note development the employee would like to pursue (job-related). There is space below the main FIT Matrix for these items. Be sure to follow-up on these in terms of budget, scheduling, and expected outcomes.
  • It’s a conversation!  Performance reviews are conversations between you and your direct reports. Involving employees in a conversational manner will build trust, collaboration, and accountability between managers and staff. Talk through how things went over the past period and what can be expected going forward. Give positive feedback when deserved, practical correction when needed, and consider developing a Performance Improvement Plan for those who are struggling to meet goals and responsibilities.

Employees who are empowered and growing in their roles are not only more productive but tend to stay with their employers longer than those who are not. Implementing a reliable performance management system will help build a positive, engaging work environment that reinforces your company values, aligns with your strategy, and leads to a happier workforce.

Kathy Miller, PHR CPTD

Management Tools