Our company has expanded over the past few years. Everyone used to know what they were meant to do but people are not sure what their objectives are anymore. I don’t have good feel for how my managers are performing. How can I measure their performance effectively?
Performance management is one of the cornerstones of good management and leadership, and you should definitely spend quality time on it. People often think it’s about the manager reviewing an employee’s actions and outputs to see whether they are performing or not, and then dealing with any shortcomings.
This attitude generally results in problems for the reviewer in deciding how to set objectives, review performance effectively and tell people they are not up to scratch.
In reality, good performance management is much more positive and is the pro-cess of linking the people in the organisation with its strategy and business plan.
Go back to your company’s strategic and business plans. These form the foundation for future action and planning. The plans must show clearly the organisation’s goals and, on practical level, what the organisation intends to achieve in the current 12-month cycle.
Next, hold personal planning meeting with each person who works directly for you and ask them to identify key actions in the coming year to help the organisation achieve its aims. This should be two-way meeting with you asking questions, probing and coaching.
The end result will be an agreed set of objectives that have resulted naturally from the discussion and with clear commitment from each of your managers. They should have identified approximately 8-10 key objectives. This ensures both you and your managers keep focused on the important things to be achieved during the year.
The objectives must be directly linked to the organisation’s strategy and business plan. They must also be specific, measurable, have target dates and the manager must be able to influence the outcome.
Then hold regular meetings with each of your managers, (I would recommend at least monthly), where you can both review progress, discuss issues and update the plan as appropriate.
Performance management is not about the manager reviewing the employee’s performance, but series of opportunities for both people to work together and ask “how are things going in achieving our plan?”, “what is working and what isn’t?”, and “what needs to be done?”
By prioritising performance management you will get far greater understanding of progress against goals, leading to improved organisation-wide learning, handling of change and development of people.
I am chief executive of medium-sized company with board of directors. I often feel the board involves itself too much in the operational detail of the business when it should be focusing more on strategic issues. How would you define the role of board?
Unfortunately I have heard many chief executives privately express this opinion. However, I am not sure if they also express it directly to their own board. I agree that sometimes board gets involved in operational detail when it shouldn’t. At other times, exceptional circumstances mean it needs to do just that.
The chief executive is probably not going to appreciate either of these situations. However, your point relates to times when the board shouldn’t be getting involved.
There are some general guidelines on the role of the board. Its primary function is to act on behalf of the shareholder. In general, the focus should be on high level strategy and policy.
On the strategic side, board will ensure the organisation has clear purpose and strategic direction. It will approve business plans and monitor them.
On the policy side, board will ensure guidelines are in place to ensure appropriate legal compliance and financial integrity.
A board’s only operational role would normally be to recruit the chief executive, monitor their performance and plan for their succession.
A board is not usually involved in any other recruiting or employment decisions. Neither does it determine the detail of any operational plans or communicate directly with people within the organisation.
However, there can be times when the board feels it has to become involved in the operation of the organisation and that is generally when the chief executive is seriously underperforming. These can be difficult situations and the board has to act as it sees fit.
Overall, the board governs and the chief executive leads and manages. Boards are independent and in position to ask questions about how the organisation is performing. CEOs often see this as the board becoming too involved but it is also acting to balance the power of the chief executive.
Many people often overlook the board’s final role as support, coach and mentor to the chief executive. good CEO will recognise this and value their board’s input.
Kevin Gaunt, FNZIM, FAIM, is CEO of NZIM Auckland and has been senior executive with, and consultant to, some of New Zealand’s largest companies.
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