As a business owner, you do a good job of juggling many different tasks: payroll, task delegation, accounting for small business – you name it. but it’s impossible to accomplish everything. Unfortunately,  the employee performance review can be one of the first items to fall off a business owner’s To-Do List.

Writing an employee performance evaluation can be a tough assignment for any manager (even when you’re dealing with a stellar employee). Preparing a thorough employee evaluation also takes time and careful thought, and if you’re a small business owner, you most likely don’t have an HR department to help with the task.  That means you have to stop whatever you’re doing and focus on your employees, which takes you away from the sales floor. And it puts you in the position of sometimes delivering bad news, which can be uncomfortable for both parties. So why is an employee performance review even worth your time?

5 good reasons why you need to do employee reviews

Consider these five proven reasons to do employee reviews.

1. Your employees deserve a review

Every staff member should be given the time for a performance review, whether they do their job well or not. In the performance review process, you can discover the goals your employee wants to achieve and share your own vision for their role in the company. Use this time to not only offer clear guidance on how to improve, but to give a sincere “thank you” to your employee. These simple words show that you appreciate their efforts and they haven’t gone unnoticed. It is also a good time to evaluate your employees’ pay wages. Keep current with the cost of inflation and reflect that with cost-of-living raises for employees when within your power. Of course, if an employee deserves more, now is the time to evaluate that also.

2. Performance reviews can help you manage more effectively

Certainly you strive to communicate with employees on a regular basis, but sometimes it just doesn’t happen that way. The one-on-one performance review may be the only time that you’ve had for weeks to catch up with a key employee. Through this process, you may discover that communication is lacking on your end, or your employee has personal issues that are impacting their ability to do their job. A frank conversation can help you guide the employee through a crisis or highlight ways to improve your relationship going forward.

3. Performance reviews help you nip a performance issue in the bud

Many performance problems start out small — a bit of slacking here and there or annoying  inconsistencies — and are certainly not grounds to fire an employee. While everyone makes mistakes, a compounding number of poor decisions can leave you wondering how things got so bad in the first place. During the performance review, you can present a sobering look at the problem and the improvement you need to see in the employee’s performance.

4. Performance reviews help you document any areas of concern

A face-to-face performance review with an employee ensures that you are both aware of how they are doing in the job. But by signing the evaluation, you both agree in writing that the information contained in the review is correct. Every review should also have a place for an employee response, which will then be included as part of the employee file.

5. Documenting performance issues is the only way to later prove the problems occurred in the past

Without a documented review, it can be difficult to show a history of performance problems. This can lead you into tricky waters if an employee conflict ends in termination. When it’s necessary to fire an employee, make sure you have proper documentation that backs up your side of the story.

Even if you think employee performance reviews are a waste of time, use this opportunity to regroup and reiterate your expectations for each employee. Giving everyone feedback on where they stand helps you build a stronger company. Don’t blow off the performance review — it’s still a vital tool in the workplace.

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