BERKONOMICS

How often do you take the time to rate your employee-associates?  Is it really worth the time and effort when measured from the perspective of the company and of the employee?

First, like any important process, the metrics used to measure effectiveness and progress are so important to a successful outcome, that a good manager will spend time reviewing those metrics used by others and create an appropriate set of measurements for your company that reflect the most important attributes of the employee as they relate to the needs of the company.  There are many formats for use in rating and reviewing employees, and selection of the proper form and format is the first step in a successful process.

I’ve been asked often if such reviews should be performed quarterly, semi-annually, or annually.  Note that few ever ask if they should be performed at all.   When an employee is subsequently dismissed for any reason, the documentation of past performance and reviews, including any past notification of weaknesses or warnings, becomes an important shield to protect the company against a subsequent lawsuit or challenge from a state employee review process.  Many companies do not take the time to perform such reviews, and end up paying the price in adverse rulings by courts or commissioners based upon verbal statements alone. So protection of the corporation is reason number one for investing in such a process.

Second, employees most often genuinely want to know how they are performing against the company’s standard and management expectations.  It is human nature to desire praise; and the review process is one tool to provide such positive feedback to employees.

[Email readers, continue here…]  Third, every employee should be directed to work toward the goals of his or her department, which in turn are aligned with those of the company itself.  By providing a format for review that includes a number of key performance indicators that measure just such alignment, both the employee and the manager keep focused upon the real goals for productivity.

Fourth, corporate values are passed on to employees in a number of self-reinforcing ways, including discussion of values during the review process.  Many a business would not have strayed into a dangerous regulatory and legal abyss if employees were shown, told, and measured by their adherence to the values stated by their corporation as important to all stakeholders.

To answer the question of how often to perform such employee reviews, from experience I suggest that quarterly formal written reviews are too much of a task for all.  Semi-annual reviews are excellent, especially for companies that offer stock options as well as merit increases for outstanding performance.  With such reviews, option grants could be tied to one review and merit increases to the other.  Two carrots in a year are better than one for obtaining desired outcomes.  The very minimum level of acceptability should be one annual review for an employee.

Review the CEO?  I participate in a number of CEO reviews as board chair of those companies.  In such reviews of the top executive, I reach out to his or her direct reports for input, and then I turn to other members of the board of directors.  With such a comprehensive view of CEO performance, it is much easier to sit with the CEO and provide valuable input that is useful for CEO development.   And even founder-CEO’s are thankful for the input received, usually taking criticism as a challenge to grow in the position.

I’d have a difficult time thinking that any company, large or small, could perform at its peak without great employee metrics including individual key performance indicators, capped by consistent reviews and feedback.

You may have been a Girl Scout or a Boy Scout in your youth.  Certainly you are aware of the top rank in each – the Gold Award for girls and the Eagle badge for boys.  Scouting teaches leadership and even if we were not members in our youth, there are lessons for us all.

For example, the Boy Scouts of America motto is “Be prepared.”  And from that comes training in first aid, disaster preparation, and outdoor skills, planning for events and outings, and any number of simulations or practice runs at rescue training – from snake bites to earthquakes to fires to broken limbs to heart attacks in the wilderness.  We could learn from this simple oath taken by boys from ten to eighteen.  Simply learning to ask “What if?” of our direct reports is a good first step toward reducing exposure to bad outcomes, whether attempting to plan for handling a natural disaster or workplace calamity.

[Email readers, continue here…]  Every Scout memorizes the twelve points of the Scout Law: A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.  That may seem an overwhelming list of aspirations, but would it not be a better world if each of us practiced most, if not all, of these?

By the time a boy reaches Eagle Scout, he has internalized the Scout Oath and Scout Law to a degree many employers later recognize makes him a better candidate for a job merely by that attainment in his youth.   After all, only two percent of all Boy Scouts do reach Eagle rank.

We adults cannot revisit our youth to live seven years of our lives with these principles always in close sight.  But we can aspire to act like an Eagle Scout, an adult who recognizes the values and attempts to practice them in business and personal life for the betterment of ourselves and our companies.

If you want to best describe the motivation behind the action, think “What’s in it for me”?  Your employees, your shareholders, your customers, and your suppliers are all driven by this question.  So why not put yourself in their shoes and develop your action plan and goals to help each of them to achieve theirs?

Employees want to be challenged, appreciated, and rewarded for good work.  So create a plan for each that will accomplish these goals upon successful achievement of their tasks over time.  Be bold enough to ask each during their periodic reviews to tell you what they want to achieve.  Be a good manager by creating paths to achievement that reflect those ambitions and allow the employee to measure success in a meaningful way during the effort to progress.

[Email readers, continue here…]  Suppliers need you to be a good customer, to pay a reasonable price for goods or services, to pay your bills on time, and of course to reorder when the time comes.  But suppliers also want to know what makes you productive and help you win at your game.

Good suppliers want to create solutions to your needs and distance themselves from their competition.  So meet with critical suppliers and challenge them to meet your needs, asking how they can help solve your problems.  Both sides win when you take the effort to inform, challenge, and partner with suppliers.

Your customers want to be treated as special.  Each would like to know that they are important, genuinely important, to your success.  Many would gladly share their problems with you hoping that you could provide solutions that would benefit both parties.
Your board members would experience a special feeling of accomplishment if they, as a group, could help you solve a problem that is strategic to the success of the company.

But deep within each of these stakeholders is the question baked into our psyche: “What’s in it for me”?  You can unlock lots of energy, talent and effort from each of these stakeholders merely by thinking ahead and planning your approach in response to that simple question.

Most of us are driven by the competitive spirit, the desire or need to win.  It reinforces self-worth, provides closure at the end of a good effort, and energizes us during the effort to achieve.

Many of us as managers – and our employees as workers – are driven by process, actions required to achieve a result.  And many of these actions are repetitive to a fault, contributing to boredom and ultimately to restlessness and desire for something new, in or out of the company.

There is a solution.  Everyone loves a good game.  It provides a short competitive experience with a measurable outcome in which the players know who won and by how much.  And it challenges each player to play again with learned skills and an incentive to beat the past score.

[Email readers, continue here…]  So think of ways to make each process into a game, one in which there is a defined metric or measure of the winner at the end of a cycle short enough to permit teaching, celebration, challenge, and motivation for the next time played.  Create small but meaningful competitions between groups or individuals for which recognition or small rewards are published in advance.  Allow for wins to be accomplishments of the team, as much as the individual, so that competition is a team sport, not an individual play for power.  Create and publish metrics as goals and comparisons to past accomplishments.  And pause to celebrate each new first or top score.

There are so many places where routine jobs can be made into a game.  Sales people know the rules and play to win, celebrating each small success along the way.  Why not empower each person or manager of each task in other areas to create similar challenges and metrics?  These cannot be viewed as corny or artificial ways for management to gain more output from a group without significant recognition or reward.  Or you will risk a backlash in which employees see the effort as merely a way to increase productivity in disguise, with no reward worth the effort.

Be a good coach, and be creative.  We all want to play to win and be recognized for our efforts.

Dictators are not great leaders in the long run.  People follow such leaders by fear, rarely by devotion.  Employees want to have a stake in their own destiny, and above all want to understand why actions are taken which affect them, even if the outcome is not in the employee’s favor.

The best leaders are those who share problems and alternative solutions with their direct reports, then seek consensus in decisions as a result.  Obviously, there areexceptions.  If the group cannot agree upon a course of action, the leader must act, even if the action taken is to defer the decision until more information or a consensus is reached.  And obviously, an emergency is rarely the time to seek consensus before acting to protect lives and assets.

[Email readers, continue here…]  In non-profit enterprises, such as educational institutions, the pace of decision-making is usually much slower as the executive director, president or chairman seeks consensus from the community wherever possible.   Many business executives first joining a non-profit board are surprised by the slow speed of deliberation and the resulting consensus-seeking that results.   Especially in collegiate academic communities, a dictator chancellor or president rarely lasts long in the position.

And this rule becomes a part of the DNA or culture of the organization.  Employees throughout the organization want to feel empowered to make suggestions, to know the reasons for decisions that affect their jobs, to have some small control over their environment.

Without a doubt, if you interview employees and managers in companies large and small, you will find that those feeling most appreciated, most productive, and most creative are the ones allowed and encouraged to participate in the decisions that affect their jobs.