Big Red Car here. Bluebird day here in the ATX. Top down day.
So The Boss gets a bunch of emails in regard to the post about Performance Appraisal. He gave away a free exemplar — a form — which showed how he used to do this years ago. You can get one at that blog post or later on in this one. Don’t fret. Useful free stuff coming your way.
Most of these emails are struggling to figure out how you get to this stage — running an orderly enough company that performance appraisal actually happens and more importantly matters. One, in particular, wants to know how to set objectives that set the bar as a frame of reference for performance appraisal.
Any company has a basic set of documents that define its existence. They deal with:
3. Strategy; and,
Here is a little flip book that The Boss has for you under the “Free Stuff” icon.
Take this and drop in your own Vision, Mission, Strategy and work with the Values. Now you have this particular egg sucked and you can print up a bunch of them — little flip books — and look like a well established company. And, guess what, you are.
In the first 5 minutes of every new employee’s employment, go through the book with them. Once a quarter buy everyone a BBQ and go through them. You CANNOT overcommunicate.
You just did something very smart — you got a full tuition scholarship on someone else’s experience. That is what smart CEOs do. Learn from someone else’s experience, in this case someone who has been doing it for a third of a century. He is starting to get the hang of it.
Objectives are connected to these two concepts — the basic organizing documents of a business and performance appraisal — because they are in support of the plan and their attainment is the yardstick that is held up to individual performance in support of that same plan.
Make the plan. Breath life into your Vision, Mission, Strategy and Values. Connect them all with a set of objectives to be attained in support of the plan.
Linkage, Grasshopper. Easy stuff because again, you have that full tuition scholarship.
Objectives have to be SMART
S — specific <<< no problem with understanding exactly what needs to be done, clear
M — measurable <<< a proven KPI or metric which can be sliced and diced — no feel good baloney, please
A — attainable <<< within grasp
R — realistic
T — temporal <<< constrained by time, can be accomplished in a given time period
Take a minute and write out some SMART objectives just to get a handle on how they should look and be written. Make them short, succinct and understandable.
Strategic v tactical
Don’t get strangled in your own creativity but take a second to reflect upon the difference between strategic and tactical objectives.
1. Strategic objectives are ones that directly further the company’s strategy.
2. Tactical objectives are ones that are a subdivision of strategic objectives. A particular strategic objective may have 5 tactical objectives which are the building blocks of the attainment of the strategic objectives.
Don’t sweat this distinction just now, make the objectives.
Now take an individual’s objectives and put them down in writing and append them to their Job Description. OMG, you do have a job description, right? We will cover that later.
When you get ready to perform their Performance Appraisal, look at the objectives.
Grade whether they have been accomplished or the percentage that they have been accomplished.
Be objective — haha, Big Red Car, you crack me up — and be precise.
Now conduct the Performance Appraisal.
Let your colleague evaluate them separately to ensure you do not have some great disconnect. He thinks he hit them all and you think he only hit 72.9%.
[Be fair. If you set the bar too high, admit it. If they knocked it out of the park, make tougher objectives. Learn from the process. Remember when the BRC puts stuff in brackets, only you and the BRC can see them.]
Use this Performance Appraisal to grade performance, evaluate objective accomplishment, set new objectives for the next time period and to take appropriate compensation action based upon objective attainment not whether “everybody feels good”.
[You do not have to perform Performance Appraisals annually. They can be every 6 months or every 18 months. Be thoughtful on this. Similarly, compensation actions do not have to always made. You can have 6 month Performance Appraisals and annual compensation actions.]
This is how the entire process ties together. It is like a conga line. Everything is moving in the same direction and is linked.