Replacing the annual review
Dear Karen: Is there a better way to assess my employees’ performance than the traditional annual review?
Answer: Managers typically don’t like writing performance reviews and employees don’t like reading them. A recent poll of small-business owners by management consulting firm George S. May International Co. showed that nearly half of business owners rated their own performance-review processes as fair or poor.
Try “catalytic coaching” as an alternative, said Paul Rauseo, managing director of George S. May. Employee and manager exchange written feedback, goals and aspirations, then create a road map for contributing to each other’s success. Coaching sessions should be done twice a year, Rauseo said.
Keeping workers after a merger
Dear Karen: My company is being bought out and I’m staying on as chief executive. How do we retain employees?
Answer: Employees worry about their job security when a merger is announced. “Listening to the employees’ concerns and creating transparency about future opportunities is more than half the battle in engaging them and obtaining their commitment to proceed with the new entity,” said Oris Stuart, chief executive of Global Lead, an international management consulting firm. “It’s best to create this transparency as early on in the process as possible, so they feel part of the future growth of the new organization and stay committed to going forward.”
Consider incentives for employees who stay. “Bonus compensation, stock options and other benefits can help send the message that the new company is serious” about keeping key employees, Stuart said.
Make sure any statements or commitments you make are in partnership with your buyers. “The message will be that much stronger when all the players are at the table and communicating consistently,” Stuart said.
Don’t cut prices to increase sales
Dear Karen: I want to increase sales. Should I cut my prices, given the economy?
Answer: It’s natural for you to consider lowering prices now, but it’s not the wisest choice, said Duncan MacPherson, co-founder of Pareto Systems, a business development firm. “Such an approach can come off as projecting a reactive -- and even desperate -- vibe to the marketplace,” he said
If you cut prices, prospective clients may focus on cost, not value. “The best way to convince new prospects is to spend more time with the people who are already convinced,” MacPherson said. “Now is a great time to convert your existing clients into referral-generating advocates. Many of your competitors may be neglecting their clients as they attempt to recruit new business, and those clients could be friends of your clients.”
Call the top 20% of your clients and ask how they are doing. “You aren’t trying to sell anything or be the bearer of any profound news, just placing a courtesy call. As the conversation is winding down, remind them that as a value-added service, you make yourself available to answer any questions that their friends or family members might have regarding your type of services,” MacPherson said. “Simply planting the seed gets the concept of referrals embedded in your clients’ minds so that they may respond when the opportunity presents itself, without making you appear needy or putting them on the spot.”
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