The supervisor and the employee not only look back together over the past year's achievements and areas needing improvement. They also look forward and set performance objectives and output targets for the upcoming year. That's what creates each employee's individual index of accomplishment and gives the supervisor and the employee something constructive to talk about during the evaluation interview. And setting those objectives and targets together also makes sure that everyone understands the business goals of the company and the family and how his or her performance fits into them. The intermingling of family relationships with supervisor-subordinate relationships in a family business can make it even harder.
Any structured method helps to relieve the unpleasantness of an evaluation's downside.
But performance evaluation is one of the best methods because the performance checklist has been created jointly by the supervisor and the employee, and the employee's performance targets are there in black and white. The performance of family and non-family employees is easy to verify, so there's less opportunity for the hurt feelings and family conflict that can grow out of a more subjective evaluation. When family members' work plans and performance targets are being set for the upcoming year, salary increase percentages and non-salary incentives can be attached to those targets right up front. Later, when it's time to calculate each person's reward for contributing to the company's success that year, it's clear who deserves what size piece of the pie. No questions, no excuses, no eleventh hour renegotiation.