With the end of the year coming up, it’s time to prepare for annual reviews. For many small businesses, it is easy to just not do them, but that is a mistake. Let’s take a look at why we do annual business reviews and how they should be carried out.

Why: Annual reviews can and should take some time to perform. You should think about what you have expected from your employees for the past year and how they have performed individually and as part of the team. The main reason to perform annual reviews is to let your employees know what you expect from them. It has been reported that the main reason employees fail is because they have never been told what their boss expects from them! It is a lot easier to groom a current employee than to hire and train a new one, so use the annual review to set performance standards and set goals.

Another reason to do annual reviews is that it documents the employee’s success or failure in meeting performance standards. If the employee ever needs to be terminated, this becomes a large part of the paper trail protecting you from legal action.

How: It should begin with a standardized annual review form, available from many sources, including the internet. Have the employees fill them out first. Then ask at least a portion of the people with whom the employee interacts to fill out the form for that employee, ensuring their answers and identities are confidential. Many companies make the mistake of only getting input from the person who manages the employee and not those who report to the employee. This can mask some really bad behaviors from upper management.

Then the HR department (or the lab owner in most cases) can review the employee using this information. Set realistic goals for the coming year, give coaching for the areas where the employee falls short, and congratulate the employee on the areas where they excel. Now move forward for a great next year!

Eric Rollins is a veteran of the optical retail, frame and lab industries. His firm, Rollins Consulting, LLC, consults with the three Os to improve profitability. Email him at


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