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Performance Realities

People do the things that are rewarded.

Companies reward people for things the company evaluates.

The company evaluates people for things easily measured.

Therefore, people do what is easily measured. 

If you only measure "attendance", what do you think you get?

Performance Evaluation Philosophy 

Some companies never have formal performance evaluations, others "go through the motions", and some have evaluation processes that really do result in increased performance and improved morale.

The reason a company should have performance evaluations is to provide and obtain feedback. You need to tell employees what you want them to do, and then recognize (positively) the ones who perform and (negatively) the ones who do not.

In turn, the employees need to have a forum that permits them to let you know that you may be evaluating the wrong things. After all, if evaluations are effective in shaping performance, they had better evaluate the right things!

How Frequently To Evaluate

Could you imagine a professional sports team (let's say football) that had the same evaluation process as your company does? The coaches would wait 90 days before they told the players if they were doing the right things. The evaluations would be written the night before they were due, and they would be comprised of vague generalities instead of specific points. Do you think this sounds like a winning team?

The more frequently and the more accurately you evaluate performance, the more beneficial the evaluations will be. Of course, frequent evaluations would be more work for the managers, but then again, what are those managers managing if not their employees?

No one should have to wait more than 90 days to find out how they are doing at their job, and when the evaluation is given, no one should ever be surprised. Interim conversations should keep people informally aware of their performance if formal evaluations cannot be done more frequently.

Evaluations Made Easy

On the other hand, let's say that you kept a list of your employees with you all of the time. Whenever you noticed someone doing something unusually good or bad you noted it next to that person's name. Just before the end of the week you checked the list to make sure you were actually paying attention to your employees. If you have gone all week and have not noted anything for some member of your team you know you need to pay more attention to that person.

At the end of the week you fit all of the observations into the categories on your evaluation form. If some of the evaluation topics are consistently blank you know that you either need to pay more attention to that topic or design an evaluation form that better meets your needs.

Take Notes Daily

Four weeks of this process should provide you with the data that you need in order to perform a monthly evaluation that would actually have value.  By collecting real data, it will have relevance instead being a mere collection of your impressions from the last couple of days.

Collecting the data daily only takes a few minutes each day. Having collected data means that you avoid the almost impossible task of remembering enough to complete the written evaluation form.

Many people dread (giving or receiving) an evaluation because they feel the evaluations measure the irrelevant, unfairly affect future pay and advancement, and occur when it is too late to do anything about any of the topics being discussed.

Frequent evaluations with relevant observations changes how evaluations are perceived.  It also changes them at a fundamental level - they begin to have meaning!

What To Evaluate

The answer to that question is almost too simple. Evaluate what is important about the job.

Sorry, I realize that you were hoping for a magic list of the right evaluation questions, but no such list exists. So, the first thing you need to do is toss that pile of pre-printed evaluation forms that you bought at the office supply store away (did you actually buy those evaluation forms or have you been copying that original borrowed form without even bothering to "White Out" the copyright line?).

Not Attitude - Performance

You need to look at each job and design an evaluation form that measures what is important. I know this is more work, but why bother doing performance evaluations if they are going to be largely irrelevant? Managing your company properly is more work than managing it poorly, but the results are better.

The next thing to do is make sure that you have no evaluation topic that even remotely looks like "Attitude". I am the first to agree that attitude is important, but you can't see it and you can't measure it, so it doesn't belong on the evaluation form. Attitude is something you can't see, but what you can see is evidence of attitude. If an employee is rude to a customer you might say that they have a bad attitude, but wouldn't it make more sense to simply note that they were rude to a customer? We tend to put a lot of emphasis on attitude because we are not good at capturing data on the real problems, like being rude to customers.

Your job is to manage your people by setting performance goals and then verifying that those goals have been met or exceeded. References to attitude without supporting references to actual events are little more than baseless accusations, and if specific events can be referenced, isn't it sort of unfair to count the event under the category of attitude?

The Problem With Inflation

Without going into a long discourse on a society that is scared to say that anything is wrong or that anybody is bad, suffice it to say that most evaluators tend to rate employees too highly.

Part of this is a survival strategy on the part of sloppy managers. Here's how it works. If a manager says nice things about an employee, the employee is not likely to insist that the manager prove what he or she has said. On the other hand, if the manager says that the employee is less than perfect, the employee might demand proof, a real problem since the manager has not been collecting any data and just wrote up the evaluation the night before based on the few times he or she was actually in the workplace and out of meetings long enough to observe work performance.

This problem is exacerbated by the fact that even if the manager tried to give an accurate performance review, he or she would have to contend with years of glowing evaluations previous manager had given the same employee. Suddenly it appears that the mean manager is picking on the super employee.

Nobody said this was going to be easy!

Forcing Reality

A useful exercise is to have managers rank their employees, from best to worst. This forces the managers to face the fact that some employees are better than others. An optional second step is to pick the person in the middle of the rank order list and put their name at "50" on a sheet of paper with 100 lines on it. Now have the manager place the rest of the employee names where they belong on the list. There doesn't have to be anyone at "1" or "100", but the names have to be spread out over the page. Now you have a better idea of who the real performers are.

The reason such exercises are necessary is that if a performance evaluation form has a 100 point scale, most companies have all of their employees receiving scores of 80 or higher. If you want to use a 20 point scale, fine, but don't play like you are evaluating on a 100 point scale.

The problem with this inflation is that it gives false feedback to your worst employees, indicating that they are actually performing well. It is also insulting to your best employees, when a slacker receives an evaluation only 5% lower than theirs.

Who To Upset

To some extent, all evaluations upset someone. You simply have to choose which employees you prefer to upset.

A "generous" evaluation with plenty of inflation is going to be well received by your slackers for the obvious reason that it fails to tell the unpleasant truth. On the other hand, it is pretty upsetting to your best employees.

They have to ask themselves some pretty ugly questions:

1) Does the boss know so little about this job that he/she actually believes the slacker is as valuable as I am to the company, or

2) Is this job so insignificant that the boss just doesn't care how well we perform, or

3) Does the boss really value what the slacker is doing more than what I do?

Frankly, I would rather have happy performers and upset slackers.

Contracts

Some jobs are not very consistent, making it difficult to develop a standard evaluation form. If the person is always doing something different, they still need to be managed. Try contracting with these people. Have them write down what they will be doing over the next week, what resources will be required, and what benefits the company will realize as a result of that investment. At the end of the week review the list with them to see if the tasks were performed, if the estimated resources were consumed, and if the benefits were realized. Then take a look at next week's list.

Think about it. Any other approach is hardly more than second guessing your employees. You ask them to go about their business and then you suddenly tell them they were doing the wrong thing (after it is too late to change). They need for you to be involved in approving what they do and then paying attention so that you will realize they accomplished their objectives.

Every star wants the world to keep score. Poor players prefer to blend into the crowd. Your job is to tell the stars from the poor players and reward them accordingly.

Now What?

In a perfect world compensation and performance are directly and immediately related.

This is not a perfect world.

Bonuses, raises, recognition….something needs to be different, better, for the people who are making your company succeed. Most incentive programs are a failure because they do not really reward the best employees properly.

Think about your profit sharing program. Some people helped the company make a profit and others consumed more resources than they contributed, they cost the company profits. When it comes time to distribute profit sharing, however, it is distributed according to a formula that virtually ignores individual contributions.

Since the money has (in such a case) virtually no motivational effect, why bother? Once again, if you aren't going to do it right, why do it at all?

Performance Reviews - Vs. - Meetings

If performance reviews steer people's performance, most people are virtually rudderless.

Managers that have time to attend meetings but not enough time to manage their people are not doing their jobs. They are avoiding the difficult task of telling people how they need to improve their performance and neglecting the opportunity to congratulate and thank the best employees for their contribution.

It is easier to hide in a conference room, but the manager's job is to manage, and nothing requires more management than their employees.

Best Picks...

....If you are in a hurry and can only read a few articles, the following five are the ones we hear the most about...

They are a bit longer than most of the others, but they will give you something to think about....

Could You Run A Winning Football Team Like You Run Your Company?

Teamwork - Coaches and players speak to business professionals, encouraging them to build teams that can win.  Let's compare your company to a professional football team....

Eating The Heart Of The Watermelon

The heart of the watermelon is the sweetest and lowest hassle part - so why bother with the rest?  You may not want to follow this thinking at your next picnic, but it sure works when making customer and product decisions!

Quit Your Company - An Exercise

This exercise will force you to see your company and the competitive landscape differently than ever before.  It will help you decide what needs to be done in order to stop the competition you don't even have yet...

Dealers And Distributors (Short Version)

You may need dealers and distributors- or not.  The real issue is whether your end users feel that they need your dealers and distributors!  Companies win when they offer end users what they want....

Dealers And Distributors - And "Going Direct"

If you have a dealer and distributor network, should you consider "going direct"?  Let me ask you this - if a major competitor did, what would happen to you?  That's your answer - this will help you see how to do it....

Management Theories

Not all management theories work - and this section discusses some theories that have problems

Reality Instead Of Theory

You can't believe everything you have been taught about business.  Most of it is true, good information - the trick lies in knowing which parts to believe, and which parts to reject.

Positive Reinforcement Myths

Positive reinforcement can result in training and motivational miracles - but there is one little catch...everyone in the "real world" seems too well fed for it to work!

Truth About Advertising - What Advertising Awards Mean To You

Advertising awards are something ad agencies love to display - perhaps it gives them a feeling of credibility.  It's a shame those awards don't reduce their client's advertising costs or increase their client's sales...

"One Size Fits All" Management Fads

Management fads do a lot of damage - they send companies off in wrong directions, and they erode the confidence of managers.  How?  Managers try the latest fad, and when it doesn't work, they assume it is because they were not good enough - it's a shame, because their instincts are almost always more effective than the fads...

TQM - The Quality Myth

TQM has been a major force for a number of years.  Although it has lost some of its luster in many circles, its proponents (consultants getting wealthy, perhaps) continue to re-invent it under a constant flow of new names....

Your Departments

The last group of articles in this section apply to sales and marketing.  The reason this area is receiving so much attention here is that there seems to be more confusion in that area.  Let's just take a quick look at some of your key departments...

Accounting Excitement

If business was a sport, the accounting department would be keeping score.  Unfortunately, the accounting department seldom provides the kind of information managers need in order to make good decisions....

Purchasing

Purchasing is more than "buying what you said you wanted", it is a proactive role that investigates better products and anticipates demand.

Engineering And R & D

Engineering creates your "new and improved" products - you need to make sure they know what your company and your customers want from them.

Manufacturing

Manufacturing - Manufacturing efficiencies largely determine your costs - and costs largely determine your competitive position!  Efficiency requires great management, management willing to do what it takes to attract and retain the very best people.

Entering New Markets - Then Closing The Door Behind You

Entering new markets - you couldn't do it if the companies already in those markets were staying in touch with their customers!  Remember that after you enter a market - or you may become someone else's "new market"!

Innovate, Renovate, But Satisfy Your Customers

Things have changed faster than most companies have changed - the web, overnight delivery, long distance charges, longer lasting products, direct (to consumer) sales - there are many ways to combine these things to satisfy your customers - and gain market share.

A Winning Marketing Campaign - Lousy Sales

Heartbeat Of America.  The ad campaign won awards, but market share slipped.  Winning companies match great marketing with great products - then the competition loses while consumers win.

Strong Companies Win In Efficient Markets

Marketing is not the art of lying without getting caught.  When your product is the best choice, there is no need to lie.

Applied Market Research - Satisfied Customers

Market research can come from a consultant, but it should also come from your own employees.  Having market research means nothing, however, if you don't use it to make customer driven decisions.

Selling To People - Not Markets

Sometimes we can forget that markets don't buy anything, people do.  Market research is valuable, but make sure it tells you about real people.  Nobody wants your product - they want a way to solve a problem or meet a need - perhaps your product can help them accomplish that.

Advertising For Sales, Not Awards

Advertising - why are you doing it?  If it is for sales, you may need to make sure your agency understands your priorities - instead of pursuing "awareness" and "impressions" - if you want sales, hold them accountable for sales!

The Rest Of It...

Not everything fits into a file, box, or compartment - this is the rest of it....

StrategiesThatWork.com Homepage

Marketing should not be a lie - build a company with productive labor, efficient purchasing, great design, accurate accounting, rational distribution - and the result is a truth you are proud to tell.  Marketing becomes a simple matter of telling the truth to people who are interested!

Eating The Heart Of The Watermelon

The heart of the watermelon is the sweetest and lowest hassle part - so why bother with the rest?  You may not want to follow this thinking at your next picnic, but it sure works when making customer and product decisions!

Dealers And Distributors - And "Going Direct"

If you have a dealer and distributor network, should you consider "going direct"?  Let me ask you this - if a major competitor did, what would happen to you?  That's your answer - this will help you see how to do it....

Dealers And Distributors (Short Version)

You may need dealers and distributors- or not.  The real issue is whether your end users feel that they need your dealers and distributors!  Companies win when they offer end users what they want....

Quit Your Company - An Exercise

This exercise will force you to see your company and the competitive landscape differently than ever before.  It will help you decide what needs to be done in order to stop the competition you don't even have yet...

Three Kinds Of Employees

The right employees are one of the most important resources a company has. Most employers are quite aware of how valuable a great employee can be, but have a difficult time figuring out who the great ones are.  It helps to divide the work force into three groups.... 

Your Mission Statement - What It Means

A mission statement is not something you can carve in a plaque next to your door, because it needs to change.  Mission statements establish priorities, and if customer satisfaction is not at the top of those priorities, you may have a problem.

Could You Run A Winning Football Team Like You Run Your Company?

Teamwork - Coaches and players speak to business professionals, encouraging them to build teams that can win.  Let's compare your company to a professional football team....

Performance Reviews

Performance reviews.  Yawn.  While performance reviews are not exciting, few things can do more to shape your company.  Done right, they can make a big difference...

"Honey, We Need To Talk"

"Honey, we need to talk" are terrifying words when they come from your spouse.  You may feel that you have an "open door policy", but walking in that door feels a lot like "Honey, we..." to most employees.  You need an easy way to stay in touch - like lunch!

Partnering And Sole Sourcing

Partnering - we hear a lot about it, but if you aren't willing to be a partner in your purchasing, you are not ready to ask your customers to trust you in that role....walk in their shoes for a moment.

Customer Focus

"Customer Focus" is something we hear a lot, but seldom results in much action.  Funny, isn't it, that customers are the only people who leave money in your company - everyone else is there to take some out....

Science Of Yourco

You don't have to look further than the nearest business magazine to find a few easy steps to management success - so why bother to develop a "Science Of Yourco"?