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Why your Family Businesses needs to make regular assessments on the job performance of non-family employees.

In family business speak, we spend much of our time talking about family issues. Relationships are complicated, performance is hard to measure, opinions are often shaped by issues outside of the business—there is, obviously, a bunch of stuff that makes family business tricky!

In the wake of all these issues, however, small business owners need to be careful to make time for regular assessments of non-family employees as well. This can be done in many ways—the key is that it needs to get done!

Here is why—employee performance is, in the end, the number one factor in maintaining a profitable and growing business. Let me repeat that for emphasis—employee performance is the number one factor in maintaining a profitable and growing business.

I get kick back on this assertion—what about cash flow, what about innovation, what about technology.

All of these are important—and we could list more—but what happens in your business is almost always driven by employee performance. For many small businesses, the owners are the top performers—they are, frankly, magicians that multi-task, multi-perform and work like dragons to make sure every detail is adequately addressed or resolved.

But…unless the business is a one-man/woman show, there are other players on your chess board that are vital to your success. Their level of their performance and skill is incredibly important.

Some stories to illustrate.

A client of mine had been in business for 25 years and all the sudden—because of a poor economy and some bad luck—fallen upon hard times. He was forced to pull back his business. He had to let some people go, he had to sell a few pieces of equipment and he had to put a hold on asset purchases, like new trucks, which he normally did every year.

The writing was on the wall that the business was struggling even though my client was discrete and kept the lion’s share of the business problems on his own shoulders.

Long time and loyal employees were a little nervous about their futures, but the company was hanging in pretty well and there was hope on the horizon.

One pay day, even though my client had enough money to meet payroll, his payroll admin, who had been with him for years and was normally flawless, made a mistake and did not get the payroll processed correctly through the bank. She discovered her error early in the morning when a few employees called her to state that their money, normally deposited in their accounts at 6:00 AM, was not available.

What did she do? Before the owner even got to the office, she sent out a group message to the entire company that she had made a mistake. She was on the phone with the bank right at 8:00. She figured out how to solve the problem and even wrote a check to the owner for the penalty the bank charged for having to run the payroll same day (which he tore up, of course).

She recognized how serious the issue would be and the message it would accidentally send. She understood what was going on intuitively and took the axe upon herself purposefully to help the business owner from taking the credibility hit.

She apologized through tears. She did everything she could to make it right and in the end, it worked out just fine.

Story number two from client number two.

This client owned an online parts business that supplied white label replacement parts for industrial-sized generators, compressors, air filtration machines. His customer base literally included on-line buyers from across the globe. Many of their business and sales transaction happened on-line but often customers would call in for customer support or questions they felt needed answering in person.

These phone calls were important because they were often an indicator that the customer wanted to purchase something that would be a higher sales amount—hence wanting some personal touch.

My client had several customer support specialists working for him. For the most part, they did a good job, however one of his employees had little patience for customers that would call in with poor English because they lived outside the US and English was not their native language.

Admittedly, some of the conversations where very difficult over the phone but this specific employee began to infect, as it were, the other support specialists with his attitude “that if they can’t speak English, I don’t have time to help them.”

My client had no idea this attitude was starting to prevail over his support team until one day he got an email from a customer explaining how rude he was treated and also explaining that he had a very large order that he had wanted to place. Naturally, my client started to investigate the claims. He discovered, to his great disappointment, that they were true. As he investigated further, he was able to root out the issue, but a bunch of damage was already in place—not to mention the lost sales that had certainly been missed.

These two stories are very real and stark examples of what employees can do to help or hurt you.

In general, I have had success putting employees into four categories: A, B, C & D.

“A” level employees are the kind that are always meeting your expectation or even over performing. They get to work on time, they have great attitudes, they solve problems, they take ownership of their job and look for ways to improve the system.

They rarely backbite against fellow employees and generally bring joy and harmony to the business.

They are the ones that you depend on and feel like you would die if you lost them.

“B” level employees are the kind that show up to work every day but never really shock you with their performance. They get their jobs done and are consistent but are often not motivated enough to take ownership in their work and look for ways to really improve the system.

They are good enough to keep around but every time you give them a raise you are feeling like it is something you are forced to do rather than want to do.

“C” level employees are the ones that barely perform well enough to keep their job. In fact, half the time you want to fire them, but they are just good enough to keep around and because you don’t have time to find somebody else—and even worse, train them.

They often don’t show up to work on time. They are the first ones out the door and have the most personal issues at home.

Sometimes they quit and you don’t even care. In fact, you are relieved when they quit.

These employees are not saboteurs or deviant, but they just suck the life out of the room.

“D” level employees are saboteurs and anarchists. They go out of their way to make people miserable and cause constant upheaval in the business. They strike down every positive thought or intent. They seem to take more joy in chaos than making things better.

They are blood suckers, energy suckers and make work impossible.

As small business owners, you would be wise to make a regular assessment of all your employees and put them into their category. I like the 2×2 matrix below:

A,B,C,D level players

The goal is to fill your team with A level employees—the more the better. In fact, the reality, back to my original assertion, is that every employee on your team should be an A level performer.

If you could build up your employee team with all A level performers your business would become almost bullet proof. Imagine, for a moment, a few of your A level performers already working for you. Now imagine if all your employees where that good. I know, at first, that thought seems impossible but consider what might happen if you had a plan to regularly work on it.

The easiest part of that plan and one you must do right now—I mean right now—is fire, terminate, lay-off all your D level employees.

We have talked about these types of sabotaging employees in other blogs but those types have got to go immediately. Not only are they horrible to work with, but they drag other players down the tubes with them. It is like keeping a deadly virus around your business. Imagine Ebola or the Black Plague—those are morbid examples but that is what you are spreading in your business.

The longer you keep those types of employees, the more likely they will be at infecting others. Soon, instead of firing one or two employees, you will have to fire several more who become infected.

Just as important as eliminating D level employees is making sure you have a plan to keep your A level performers happy—you don’t want them leaving the company!

Intentional planning may include things like personal notes for a job well done, unexpected prizes like movie tickets, gift cards to restaurants (I like things that they can share with their spouses because it is a two for one kind of prize), gift cards to a nice local hotel or spa.

These kinds of things are easy to forget, hence my recommendation that you have something intentional and planned. These types of planning meetings and schedules are easy to do among your leadership team and although it may feel like it takes the spontaneity away, it also takes away your team forgetting to do something or procrastinating too long.

The toughest employees, admittedly, are your B & C level performers.

For your B level performers, I would recommend trying to organize an employee development plan. You can often move B level performers over into the A quadrant—you want them to get better. You want to explain to them that you need them to be better.

This is where honest and regular evaluations are so important. There is so much written about effective evaluations with employees. I will readily concede that doing these is a pain in the butt—pulling no punches here. I know it is time consuming and the conversations, if done right, can be quite difficult.

Still, coaching employees, even when you have to say hard things, is a sign that you care about them. People intuitive know that—it is when coaches stop asking their players for better performance that people know their coach has given up—the story is written, as it were, and cannot be changed.

Silence or no feedback to an employee is not a sign of your contentment and it does not go unnoticed. Employees can perceive, almost spidy-sense if you will, when you have given up on them ever getting better.

Candid conversations will usually do one of two things—give your employee the motivation to get going and get better or put them on notice that they will eventually lose their jobs because they don’t have the heart to get better.

Ultimately, most companies are forced to keep B level employees on board—especially if the labor market is tight.

However, C level employees, though not diseased and infectious, also need to be removed from your organization. It is not an emergency but it needs attention and constant effort.

C level employees fit the bill of the customer support specialist in my story above. They hurt your business, they cost you money and they bring other employees down with them.

I will end where I started, employees are absolutely crucial for any small business, family owned or not, that wants to be profitable and grow.

Business owners would be very wise to have a human resource plan in place, meaning something that is talked about and acted upon regularly. It is so easy to let it slide because these kinds of issues can often wait a day amidst the many fires that need tending.

So much can be done to improve your workforce but not without a plan and conscious effort to make it a part of your management and even your strategy.

Consider how many of your competitors are addressing these issue—likely few of them since they are as busy as you are. This is a strategic play that is relatively easy to implement because most of it is based on planning and effort.

Being a small business owner ain’t for the weak of heart. I salute what you do—you are the backbone of our society. Best wishes moving forward.