Kicking off Individual Peformance Plans August 7, 2007Posted by Darth Sidious in Managing Employees.
The Performance Plan’s primary purpose is to maximize employee productivity, and it does that by setting expectations and goals which ultimately lead to the end result.
There’s a difference between working hard and productivity. Working hard, which in general is good, can be directionless. You want to make sure that all your staffs work is aligned towards Department and Organization objectives (a.k.a nested objectives).
Otherwise it won’t help the overall strategic direction that executives have set fort. So making sure their work somehow supports top level goals fully leverages their effort.
The setting of goals also goes towards productivity by adding accountability. It’s a contract that you and the employee agree to.
A Performance Plan consists of the following:
– Achievements & Review of the previous Term
– Goals for the next Term
– Areas for improvement
Step 1: Determine Length Of Term
This can actually be quite challenging, because even for small teams conducting a round is time consuming. But at the same time, if the Term is too large the reality is so much can change within that time frame that you can’t realistically hold someone accountable for what probably won’t be a priority a year from now.
In any case, the Performance Plan is a living document that requires periodic review and updates depending on changes priorities.
The optimal length of Term is a Quarter (3mos); its short enough that people can mentally size up the time frame while feeling that they should have just enough time if they work hard enough to achieve their goals (vs. in a 2 year plan a couple of days has no tangible impact to the timeline).
But if the administrative overhead is too high, stick with a 6mo Term.
Step 2: Determine Department Objectives
You need to know what the employee’s Objectives are going to align to; make sure that those Department Objectives are listed on the Performance Plan.
Step 3: Determine Individual Objectives
Each employee should have between 3 to 6 major Objectives per every 3 months that they need to complete. It keeps them focused on what they’re accountable for. So during the Term, if some adhoc project comes along they are unlikely to be derailed by it.
Because if they embark on it they take a huge risk that they might miss their prioritized goals (the only thing that they will be rewarded for, anything adhoc that isn’t sponsored by you may be well intentioned but should not be rewarded).
Step 4: Determine Areas of Improvement
These aren’t tied directly to work output, but rather to the advancement of the individual. The more you can grow your staff, the bigger results you should be able to achieve. Identify areas which the individuals are weak at, and pick one or two things that you feel would be most beneficial to the organization if they were to excel at it.
Keep in mind you can’t just tell someone to be better at something and expect success, for if they knew how to be better they would. You have to give them some kind of coaching, tool, or training to help them achieve that. On the Performance Plan identify the steps that will be taken to advance in those areas.
Step 5: The Course of the Term
Once the goals have been communicated and agreed upon, the course of the Term goes on. It would be quite foolish to turn a blind eye and at the end of the Term review the results; you couldn’t even do this with highly skilled individuals.
Have periodic one on one meetings to review how they are progressing on each of those Objectives. If they’re falling behind help get them back on track. If there are things in their way, remove those obstacles.
The idea is that by the end of the Term, there are no surprises. If they didn’t meet the Objectives you can (in a fair way) let them know that they failed to live up to expectations (and if necessary feed them to the Panna Monster), despite all the support that was provided to them.
Step 6: Performance Review
At the end of the Term you review the Performance Plan and rate their level of success on each Objective. It’s important to document not that they just got it done, but HOW they got it done. What Company Values and Behaviors were used to achieve the goals?
This all adds up to a bottom line score.
Studies have found that successful Performance Reviews hinge on one thing: honesty. Employees will not take Performance Reviews seriously if they feel it’s overly harsh, or overly soft. The straight up truth is the key, tell it how it is.
Make sure to print a copy for yourself and the employee where both you and the employee sign the result of each term. The signature doesn’t carry much functional weight, but psychological studies show that the act of signing causes people to become more committed. At the same time it serves as legal firepower if you have to lay someone off; if they sign off on a low score, it’s indicative that they acknowledge it.
And once that’s done, it starts all over.
It may take a few Terms before you figure out a good formula for determining the score.
For example not all Objectives are equal; one may be more important than another. In such a case you may want to use Weighted Objectives that assign a relative importance to each Objective. If the employee is running out of time, it helps them determine what would be the better sacrifice to make.
Say you have the following two Objectives:
Goal 1 – Build 5 new Starships. Weight: 99%
Goal 2 – Feed the Panna Monster. Weight: 1%
Obviously focusing on Goal 1 is going to give them the biggest reward, and missing on Goal 2 will have a negligible effect on their overall score.
Note that Weight is not indicative of time or effort. It’s highly possible that a lower Weighted Objective requires more time. The Weighting is based on its importance to the Empire or the Company.
Use VaderSoft Excel to get this process going; you can use dedicated tools if you want, but even large companies continue to use VS Excel for this activity.
With each Term, be sure to include a copy of the Company Values and Behaviors that they should employ to achieve their goals.
Objectives are S.M.A.R.T goals – Specific, Measurable, Achievable, Realistic, and Time bound. They are tangible deliverables where the level of success can be measured (e.g. new sales of a product, uptime of a server).
You may want to track other Metrics where you could create Objectives around, but would be used primarily for consideration of score amendment. For example if customer satisfaction is important, although it may not be an Objective, if the employee is able to dramatically improve the metric you way want to have that documented and used to boost their score as a reward.