Rave Reviews Automation can earn you two thumbs up at employee evaluation time.

Erin O'Leary-Rallis knew employees should get regular performance reviews, but it wasn't happening for the 20 employees at Nittany Embroidery. "We've grown quite a bit, and things have gotten increasingly difficult to manage in terms of human resources," says O'Leary-Rallis, 40, who co-founded the State College, Pennsylvania, screen-printing and logo company in 1998. As Nittany Embroidery grew to $2.25 million in annual sales, reviews typically happened only when someone asked for a raise or announced they were leaving. "It's not a good way to do business, and we knew that," says O'Leary-Rallis.

Most small businesses are doing about as well as O'Leary-Rallis at evaluating employees, according to a survey by Success Factors, a San Mateo, California, vendor of performance and talent management tools. The company's 2007 survey of 726 HR professionals found that more than 80 percent of small companies had no talent management score card, which is a set of measurements used to determine how well you're attracting and retaining talent. Sixty percent had no formal plans to develop and keep employees.