With a small work force of about 50, Noseworthy Chapman CA, an accounting firm based in St. John’s, has been operating for the past three decades without a human resources department.
Until two years ago, the company did not have a formal system for reviewing employees’ work performances.
“Nobody had the time to do it properly,” recalls managing partner David Howe. “And we’re not large enough to have an HR department or a full-time HR specialist.”
Nevertheless, the company decided in 2009 it needed to make time for formal performance reviews, a process where one of the firm’s partners sits down with an employee for a frank appraisal of the worker’s on-the-job performance.
“We should have done it sooner,” Mr. Howe says. “But we’re challenged with the day-to-day demands of a very busy business, and not having the HR expertise also presented a barrier.”
No time. No resources. No performance reviews.
It’s a state of affairs familiar to many small businesses – and even to a number of large companies, HR experts say.
As they work to grow their business, small companies often push aside formal employee appraisals. In many cases, they do this because they're operating with a lean staff and don’t have anyone trained to do performance reviews.
In other cases, entrepreneurs may feel the reviews are not necessary.
“For a majority of small businesses, a lack of time and resources is probably the key reason for not doing a performance review,” says Michael Haid, senior vice-president of talent management at Right Management, a Philadelphia-based HR management consulting firm with offices around the world.
“But there are also those who think that they're already spending enough time working closely with employees and giving them feedback on a daily basis, so why bother with performance reviews?”
However, small businesses that ignore reviews run the risk of losing good employees, Mr. Haid warns.
They're also missing out on opportunities to develop workers who can really contribute to the company’s growth.
“Performance reviews are important for three reasons,” Mr. Haid says.
“By having a more formalized process where you can be very specific and explicit about goals, you can drive better employee performance, increase employees’ accountability for their work, and help them feel part of the business and its goals.”
Cherry Cusipag, HR manager for Kitchen Stuff Plus Inc., a Toronto-based housewares and home décor retailer, says that some small business owners may be avoiding performance reviews because they think it’s a complicated process.
“There’s this perception that performance management systems have to be large and elaborate and led by HR departments that only big companies can afford,” she says. “But in fact, you don’t need a fancy-schmancy system with numbers and graphs to do performance reviews.”
For the enterprise with limited resources, Ms. Cusipag suggests a simple form with a checklist of an employee’s responsibilities and performance measures, such as dependability, communication skills and the ability to work as part of a team.
It’s also a good idea to prepare a set of questions that can help shed light on how employees feel about their job and the company, she says.
Companies don’t even need to build these forms from scratch, she notes.
“Just go online to HR websites and you’ll find templates you can download, many of them for free,” she advises. “There are also all kinds of pamphlets and other training material that can give you guidance on how to conduct a performance review.”
To create its performance review system, Noseworthy Chapman drew on the experience of other small accounting firms through its membership in DFK Canada Inc., an Edmonton-based national association of independent accounting firms.
“The association has an HR committee where members can talk about their HR challenges and share best practices, and our firm has a representative on that committee,” Mr. Howe says.
