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More than the product, service or other specific offering a business generates, what defines a company is its workplace culture. Large corporate entities may operate one way regarding everything from policies on vacation time to dress code, while small businesses and startups are often known for their looser, more flexible structures.

Believe it or not, this corporate culture can play a significant role in more than just office environment – it may impact the efficacy of performance reviews as well. Here are some things to keep in mind to better balance a comfortable workplace atmosphere with efficient and effective evaluation practices.

It comes down to interpersonal relationships
The relationship between a manager and his or her employees is a crucial one. If an executive doesn't get along well with the workers he or she is responsible for, overall company performance can suffer. At the same time, there are those who caution against too much familiarity in the workplace for similar reasons.

One such cautionary tale comes from a report published by psychology professors at Rice University, Human Resource Executive Online reported. According to their findings, offices with looser structures and cultures tended to have difficulties when it came to performance reviews. Simply put, the more comfortable and friendly employees were with their managers, the less likely they were to provide thought-out and constructive criticism in a review format, and vice versa. In many cases, these companies produced performance reviews that were consistently higher than those with more rigid cultures – not necessarily because employees were performing better, but because there was a greater concern about demotivating employees or managers. 

The importance of encouraging feedback
Everyone likes to feel good about going into work, and a friendly office environment is a huge part of that. However, executives should be aware of the importance feedback and performance reviews can play in refining a company's operation. Employees must be encouraged to be honest with their feedback. Many companies already take measures to assure this, such as implementing anonymous review scorecards or holding private interviews. 

Managers can also turn to HR services for help refining the review process. For smaller companies that don't have an in-house HR department, PEO companies can be a valuable resource in this regard, offering the expertise of necessary HR solutions without the associated payroll cost of supporting a whole department.