Managing a small or medium sized business can be a tough thing. A lot of things can go wrong and a disgruntled employee is one of them. While creating your dream team with your current set of employees you have to take great care that they are motivated, committed to your vision, and devoted to their workload. This article by Melbourne business coach David Guest tells you how avoiding of performance appraisals and dismissals can actually kill your business.

First, you have to know the purpose(s) of a performance appraisal. It determines which employee is working diligently, who deserves a raise, and who is fit to be terminated. It also tells the employees what is expected of them in the dream team. It gives them scope to develop their positive skills and cut down on the negatives. Lastly, it tells the employees of their relative performance ranking, creating a healthy competitive environment in the office. Regular appraisals and dismissals thus form a critical part of team building and performance management.

To maintain a beautiful and healthy lawn, you need to check it regularly for weed and remove them. So too in a company you have to regularly fire the employees who are holding back the true potential of your dream team. However, most managers find it hard to fire their employees for either emotional reasons or for fear of litigation after the termination takes place. This is where business coach, David Guest in Melbourne can help you out. No company wants a litigation stamp on their name and if it’s a small one, a lawsuit can actually close you down by draining your finances. This is where a performance appraisal comes in the picture.

A performance appraisal is a powerful tool in managing your company if used properly. For this, you have to ensure the following. First, they should offer a clear documentation of performance, preferably with the use of a common and standard appraisal method that is widely recognized, such as the graphic rating scales, the 360-degree feedback, or the behaviorally anchored rating scales (BARS). Next, your appraisals should be consistent, both over time (year after year) and over all the employees. There should not be any bias or subjectivity in the process and this is another reason to use a standard appraisal method. Then, the appraisal should be honest and truthful. Neither should there be any softening of the hard truths nor any cover-up lies. A clear cut appraisal and dismissal system can help you face any unhappy former employee in court with confidence.

However, you need to be very transparent and cautious while carrying out an appraisal. If a performance appraisal is conducted negligently, or they are not consistent throughout, or if they are too charitable and sweet, they might not stand up as strong evidence in court regarding the performance of the employee.

Performance management is not easy. Appraisals and dismissals are an important powerful tool that helps you out, but you have to truthful and sincere to actually reap its benefits.