“Evaluations Give Workers Little Insight, Survey Finds,” reads the headline (1) in a report on a survey of 1,190 US workers by Watson Wyatt, a human resources consulting firm. “Only 30 percent of workers say their company’s appraisal process helps them improve their performance, and less than 40 percent say the process provides clear goals or feedback… It’s an exercise that can have a negative effect on company results In a previous study, Watson Wyatt found that companies that clearly establish the responsibilities of workers and their connection to broader company goals…perform better overall. .. ‘four times the total return to shareholders'”.
This study confirms what great managers know: people need clear direction linked to organizational goals to perform well. Too often, companies, driven by legal imperatives, resort to putting everything into a “job description” that becomes outdated by the time it hits paper. Many assessment systems try to quantify unquantifiable ‘attitudes’ or create desperately confusing descriptions of ‘competencies’.
The solution starts with a solid strategic plan for your business, government, or nonprofit organization. The plan must be based on the long-term vision AND the most immediate mission of the company. The strategic plan links each employee to that mission:
* The company establishes its high-level goals and specific objectives.
* Objectives describe outcomes that move the mission forward.
* Departments create aligned plans to accomplish a part of the overall plan.
* Cascading, this process continues until it reaches the individual employee.
Each manager and work group creates a very practical plan tied directly to the objectives. Each manager discusses with each team member how their specific work and assignments help accomplish the mission. When the process is complete, each individual has explicit knowledge of how their work contributes to the success of the organization. The manager and the employee develop a Individual Performance Plan with measurable results in two areas, continuous responsibility and growth. The manager and employee then discuss progress against this plan (at appropriate regular intervals) so that feedback is quick enough to reinforce desired behavior and take action on undesired performance.
In his groundbreaking study, First break all the rules, (2) Marcus Buckingham and Curt Coffman found that great managers conduct a formal performance review quarterly. In effect, the “annual” review becomes just another quarterly review. This approach provides:
* continuous feedback
* concrete performance and improvement
* results integrated with the needs of the company
* individual awareness of what they should be doing at all times to accomplish the mission.
When examiners for the US Malcolm Baldrige National Quality Award interview companies, they ask just about everyone, “What is your company’s mission and what is your role in fulfilling it?” World-class companies invariably have a workforce that can answer this question specifically. People know what the company is trying to achieve and what it contributes.
The link between individual performance and the mission is NOT just a ‘nice to have’. The Gallup Organization published its latest study in 2006 based on survey responses from millions of employees and analysis of observed business results at hundreds of companies around the world. When they asked people to rate how much they identified with the statement, ‘My company’s mission makes me feel important,’ they found that “the top quartile . . . averages 5 to 15 percent higher profitability than bottom quartile units. Mission worker-driven workgroups experience 30 to 50 percent fewer accidents and have 15 to 30 percent lower staff turnover.” They concluded that it was “as if the employee couldn’t energize himself to do as much as he could without knowing how his job fits into the grand scheme of things… For reasons that transcend physical needs met by earning a living, [the employee] seeks its contribution to a higher purpose.”(3)
Leaders who want their organizations to succeed are turning static job descriptions and worthless annual performance reviews into dynamic Individual Performance Plans and continuous review and improvement. Everyone is tied to the mission and is clear about what they need to do to achieve the end goals. Not surprisingly, the data shows quadrupled return to shareholders and better morale and productivity among mission-focused workers. (1) Any company can achieve these results by starting with a strong, mission-driven strategic plan and passing it on to everyone to execute. The plan is only as good as its execution, and execution occurs at the individual level where people are fully committed to the mission.
(1) the miami heraldBusiness Monday, page 16, Workplace column, Andrea Coombes, May 10, 2004
(2) Marcus Buckingham and Curt Coffman, Break All the Rules First: What the World’s Best Managers Do DifferentlySimon and Schuster, 1999
(3) 12: The elements of great managementRodd Wagner and James Harter, Gallup Press, 2006