Boosting Performance and Morale: The Art of Feedback for Small Businesses

Employee feedback is a crucial element in the professional growth and development of your team. For small business owners, and especially those new to management, providing effective feedback can significantly impact your team's performance, motivation, and overall, your business’s success. In this blog, we will unpack why feedback matters, how to deliver it gracefully, and provide you with the practical steps to structure positive and negative feedback.

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‍And if you’d prefer to hear my collaborator Julie Parker and I discuss this, listen to our Podcast, Episode 20—How good is Feedback… Not!

Why Feedback Matters

Employee Feedback Enhances Performance

Feedback is a powerful tool for enhancing employee performance. When your team knows what they're doing well and where to improve, they can adjust their efforts accordingly. People are generally motivated by recognition, opportunities for personal growth, a sense of purpose, and feeling valued within their organisation. Therefore, while constructive feedback helps identify areas for growth and positive feedback reinforces good behaviours and practices, there are more benefits than just that. According to Gallup, employees who receive regular feedback are 3.6 times more likely to be engaged at work.

It Boosts Employee Morale and Motivation

Regular, constructive feedback can significantly boost employee morale. Recognising and appreciating employees' efforts makes them feel valued and motivated. Harvard Business Review highlights the "progress principle," noting that one of the core elements boosting motivation is recognising progress in meaningful work. This fosters a positive work environment where employees are more engaged and committed to their roles.

Promotes Continuous Improvement

Feedback encourages a culture of continuous improvement. Employees become more open to learning and development, leading to increased innovation and efficiency within the business. Research from the Human Resource Development Quarterly shows frequent and constructive feedback leads to better performance and higher job satisfaction. It also helps identify skill gaps, enabling targeted training and development initiatives.

Strengthens Manager-Employee Relationships

Providing consistent and constructive feedback helps build trust and strengthens the relationship between managers and employees. It opens up lines of communication, making it easier to address issues and work collaboratively towards common goals. The O.C. Tanner Institute reports that 65% of organisations with leaders who regularly recognise employees see higher levels of engagement and morale.

Why Small Business Owners Hesitate to Give Feedback

Many small business owners hesitate to provide feedback for a variety of reasons. They may fear upsetting the other person or see it as a confrontation rather than a conversation. Some might avoid giving feedback because they feel too busy to engage in what they perceive will become a lengthy and challenging discussion. Additionally, the discomfort of potentially justifying or defending their feedback can deter them from giving it. However, overcoming these hesitations is not only necessary, it’s crucial for fostering a transparent and growth-oriented work environment.

How to Deliver Feedback Gracefully

Before we discuss how to deliver feedback to your team, we need to mention the importance of creating a psychologically safe workplace and how this affects feedback. 

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Psychological safety is an environment where individuals feel secure to express their thoughts, ideas, concerns, and mistakes without fear of negative consequences such as ridicule, punishment, or ostracism. It is characterised by mutual respect and trust among team members, fostering an atmosphere where everyone feels valued and accepted. In a psychologically safe workplace, employees are more likely to take risks, engage in creative problem-solving, and openly discuss issues, leading to better decision-making and innovation. 

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Cultivating psychological safety is vital for fostering a culture of continuous learning and improvement, as it encourages honest feedback and open communication.

Choose the Right Time and Place

Timing and setting are essential when delivering feedback. Choose a private, quiet place where you can speak without interruptions. Ensure the timing is appropriate, avoiding moments of high stress or tension. 

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Tip: Scheduling regular feedback sessions as part of your normal processes helps normalise giving and receiving feedback and easily reduces angst.

Be Specific and Objective

Vague feedback can be confusing and unhelpful. Be specific about what the employee did well or what needs improvement. Use clear, objective language and provide concrete examples to illustrate your points. Avoid generalisations and focus on observed behaviours and their actual outcomes rather than personal attributes.

Be aware of  the "Sandwich" Approach

While the "sandwich" approach—where negative feedback is cushioned between positive remarks—has been popular for some time, recent insights suggest it can dilute the message and seem disingenuous. Instead, we now recommend being direct while providing psychological safety. Psychological safety involves creating an environment where employees feel safe speaking up, making mistakes, and learning from them without fear of negative consequences.

Focus on the Behaviour, Not the Person

When delivering feedback, focus on the employee's behaviour or performance, not their personality. This helps prevent defensiveness and keeps the conversation constructive. For example, instead of saying, "You're always late," say, "I've noticed you've been arriving late to meetings, which affects team productivity."

Be Empathetic and Supportive

Approach feedback with empathy and a supportive attitude. Acknowledge the employee's feelings and challenges, and show that you want to help them succeed. Offering support and resources for improvement demonstrates that you care about their development and well-being.

Practical Steps to Structure Feedback

1. State the Purpose: Explain why you're having the conversation and project how you’d like the outcome to be. This helps your team members understand the context and importance of the conversation and creates safety.  

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Example: "I want to discuss your recent project performance to ensure we can improve our processes and meet our goals. I want this to be a positive discussion focused on improvements."

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2. ‍Describe the Behaviour: Clearly describe the behaviour or performance issue. Use specific examples and avoid generalisations.

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Example: "I noticed that the last report contained several errors and was submitted after the deadline."

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3. Explain the Impact: Describe the impact of the behaviour on the team or business. This helps the employee understand why change is necessary.

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Example: "These errors caused delays in the project timeline and required additional work to correct, affecting our overall efficiency."

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4. Discuss Solutions: Collaboratively discuss potential solutions or actions to improve. Offer support and resources to help the employee succeed.

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Example: "Let's work together to identify strategies for better time management and accuracy in your reports. Would additional training or tools be helpful?"

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5. Set Clear Expectations: Outline your expectations for future performance clearly. This provides a roadmap for the employee to follow.

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Example: "Moving forward, I'd like to see reports submitted by the deadline with fewer errors. Let's schedule regular check-ins to monitor progress."

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6. Follow-up: Schedule a follow-up meeting to review progress and provide additional support if needed. This shows your commitment to their development.

Example: "Let's touch base in two weeks to review your progress and address any challenges you might face."

The Importance of Positive Feedback Ratios

Research suggests that managers should aim to provide at least five pieces of positive feedback for every piece of negative feedback. This ratio helps maintain a balance that supports employee morale and trust while encouraging continuous improvement. Management experts like Daniel Pink emphasise the importance of recognising and celebrating small wins to keep employees motivated and engaged. This isn’t about the sandwich method, as discussed previously; it is about your general feedback process with your team. 

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The takeaway here should be that your team should hear more positive feedback than negative by a ratio of 5:1.

Before we conclude – The Benefits of A Culture of Continuous Improvement

When you embed continuous improvement into your business culture, feedback simply becomes part of every day. You can encourage your team to see mistakes as learning opportunities and address them with constructive and informal feedback. This approach not only supports personal and professional development but also drives continuous improvement.

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Start with small steps like brief feedback sessions at the end of meetings or regular one-on-one check-ins. Over time, these practices will cultivate a culture where feedback is valued, and innovation thrives, ensuring continuous improvement is a fundamental part of your organisation's DNA.

Conclusion

Providing effective feedback is an essential skill for small business owners and new managers. You can foster a supportive and productive work environment by understanding why feedback matters, learning to deliver it gracefully, and following practical steps to structure both positive and negative feedback. Regular, constructive feedback not only enhances employee performance and morale but also strengthens manager-employee relationships, driving overall business success.

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As you implement these strategies, remember that feedback is an ongoing process. Continuously seek opportunities to provide feedback and encourage open communication within your team. With practice and dedication, you can master the art of feedback and create a thriving, motivated workforce.

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