Tuesday, January 05, 2010

Judgment Day at Work

As the new year begins, managers all face that difficult time of the year. You made it through the holiday slow-down of income, the empty budgets and staffing problems from everyone demanding the same days off, but now you have to face a bigger, nastier pair of monsters: Key Performance Metrics and Employee Evaluations.

Sorry, I know those are ugly topics, but we have to deal with them, because they only get uglier if we put off dealing with them. Of course, some managers have no problem setting up KPM or issuing evaluations, but too often that’s because they don’t really make the best use of those tools or worse, don’t care about their people enough to do the job right. What I mean, is that if a manager plans his groups’ metrics effectively and handles evaluations in the best way, he not only satisfies a requirement but can also improve his groups’ performance and his own results.

Let’s start with the metrics. First off, every manager struggles to produce effective results. All too often he or she is under pressure to produce results which assist some other group which has gained influence in the company structure, some politically correct goal, or which is based on the modern idol of “efficiency”. I do not dislike efficiency, except that efficiency does not necessarily mean achieving effective results, is not necessarily profitable, and is not necessarily the best focus for long-term strategy. That’s not to excuse sloppy or poor performance, it’s about making sure your numbers are relevant and in line with the company strategy. While many managers will develop metrics based on what their superiors say they want to see, and you have to be responsive there, it’s important to have a real sense of how your group contributes to the bottom line and what measurements reflect how well you are doing. Knowing this not only helps develop relevant metrics, it also helps managers focus on things they can actually control and assign the right people to key tasks and responsibilities. For example, perhaps your company is emerging from the recession and plans to enjoy a good year of growth. In that case, you’d look for metrics that increase revenue and traffic, whether production, acquisition, volume of communication or speed of response. On the other hand, perhaps your company is dug in, expecting hard times for a while, in which case you need to control costs and waste, reduce exposure to risk and be able to defend the expense for your group. You would want to assign roles and direct priorities for your team to match the company’s needs and goals, even when the company leadership may not have announced them yet. That requires careful attention to the company’s stated vision and strategy, as well as how well the company and your department have performed with respect to past goals. I know that’s vague, but I think you can see what I mean.

Once you know your group or department goals for the coming year, you can decide specifics on who will be assigned what, who needs to be cross-trained or brought up to speed to make sure bases are covered, and how you plan to reach your targets. And that gives you information for your planning and strategy meetings with your people, which brings me to the employee reviews.

There are, actually, three parts to the annual review for employees, and I strongly suggest you handle them in a non-chronological manner. That is, a lot of managers try to handle everything at once, and so the meetings turn into long unfocused sessions which glance at the year past, provide only general discussions about the coming year, and focus for the most part on raises, bonuses, or why they aren’t being given this year or are not larger. That’s natural, of course – we all show up for work in large part because we want to make money, and we want as much money as we can get. And so, we are not surprised when our people see the annual review in the same light. But the actual performance from the prior year is important to review, the coming year is critical to accomplishing the goals which will give you the best chance to produce the results which bring in those coveted raises and bonuses, and so the three parts should be held in separate meetings. Yes, that can be difficult when you have a large staff, but if there’s ever a time when it has to be done that way, this is that time.

First, schedule reviews for the year just past. I personally recommend an hour for each of your employees. Not that you’ll need that long for everyone, but having it available is a good idea, and if you use less time than you have scheduled, it frees up time for some of the other work you have to do. But if you need the full hour for an employee, it’s important to show them that they are worth a significant amount of your time. Speaking for myself, I try to not be obvious about the order of the meetings (some managers speak to their employees in order of review grade, in essence telling the staff how well someone did by when they see them), but I will mix in my more difficult employees on the same day as I plan to meet with some of my better employees, if only to help keep a balance to the mood. Then again, sometimes my best employees have the most questions, take longer to speak to, and may object to something in the company policy that seems (or is) unreasonable.

This is, of course, when you will inform the employee how he was rated, graded, or otherwise judged. These days, just about every employee in a good-to-large-to-freaking-huge company will either be given a grade of some kind, a ranking among his peers, or both. And most managers despise the grading system for the same reason that employees often hate it – it seems a useless sacrifice to bureaucracy, and too often the review amounts to little difference between the best and the worst in how the company rewards effort. So, the obvious thing to do is to think about the review in terms of what it should do for your goals, for the group’s effectiveness, for justifying raise and bonus requests, and for documenting the accomplishments of your people.

While I am opposed to the notion of formally ranking your employees (after all, your worst may still be better than average for someone else, and a sub-average performer one year might improve significantly with experience and coaching), when addressing the review of you employees I prefer to start by separating my staff into the generally average, generally below average and generally superior employees, then start with the weakest employees. This is because you will want to identify where things went wrong and if several of your “bad” employees have the same problem, that indicates that the problem might be yours, not theirs. And this group (hopefully small) is where you will want to focus your teaching skills – except for ethical conflicts, many performance issues can be resolved with time, clear instruction, and optimism. It will also help you identify strengths in your better employees. Whenever you write about an employee’s work, whether in praise or criticism, be specific. For this I strongly recommend you keep a journal, and anytime something stands out – good or bad – make a note so you can use it to counsel or commend the employee. Obviously, I also recommend mentioning it soon after it happens, but also at the end of the year so the employee will see that you remember. If you think the employee was average, explain why. If they failed at something, explain why. And if you are impressed with them, explain why. This will make your coaching more effective, it will strongly improve their chances of getting the bonus or raise you propose to upper management, and it will show that you are objective and perceptive.

Schedule the coming year assignments and planning the same way as your prior year review; an hour each person so you will be sure to have enough time. This is an area where you want to be clear, direct, and complete in your instructions, because you are laying the foundation on which your entire year of work will be built. Since these meetings come after you review the prior year, you will have a fresh idea of how well each employee should be able to take on duties, and you may note any promises of improvement or request for greater responsibility you receive from your staff. Be specific, and make sure each employee knows what he is expected to do, and what defines “above expectations”. Write down everything promised, by the employee and by yourself. Let each person know they will be held by their promise, and that you will be accountable for your own. In addition to meeting company and department goals, this is also the time where you should try to find out where each employee wants to go and become, and to provide them with opportunities for growth and learning, so that they have a full opportunity to increase their skill set and show what they can do. This is not just being ‘nice’, it helps you identify leaders and provide resources for your company and group that were not available the year before.

Now we come to raises and bonuses. Obviously, I have no personal power in how your company will compensate employees, but many manager have a say in how well their people are treated. Even in lean years, it’s important to stand behind your people, especially the ones who have done exceptional jobs. Most executives will understand that they need to keep their very best, so if you can be specific and enthusiastic in saying what your top people have done, you can and should fight for the best raise and bonus you can get each of them. If for no reason than the fact that top managers produce top performers; if you can show your people are excellent, then that is evidence of your own worth and quality. And believe me, your people will know if you fight for them, and if you do, it will be repaid in their future results.