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When is a 3 a 10? Some new ideas about performance evaluation

Airplanes seem to be a great place to write blog posts. I’m writing this one as I fly to California to meet with partners from Haeger, Inc. Folks are flying in from Netherlands and China to meet together in Oakdale and work on processes and OGTE!. I am really looking forward to the first face to face meeting of the Haeger Community Exceleration!Team: Sally Chen, Gena Beck, and I are the Haeger CE!T, and we have only met via Skype so far.

The latest innovation in OGTE!, our proprietary performance management system, is the posting of regular evaluations. Our culture resists traditional performance evaluations because we feel that leaders and their partners should be in continual dialogue to the extent that a formal, uncomfortable annual meeting should be unnecessary. Our belief in the power of learning by taking on seemingly impossible goals also makes traditional performance reviews problematic. How do you rate someone who has taken on a heroic challenge, who accomplishes a great deal, but who may fall short? If someone hits every goal, were the goals audacious enough?

We have tussled with this built-in contradiction for some time, and have arrived at a solution for now by focusing on the quality of planning, thinking, and executing against the plan. With the first deadline being March 31, leaders will have a performance dialogue with their partners  three times a year to answer the following questions:

Q1.      Quality of Thinking

Given the way this partner is thinking, planning and reflecting where on the path are they to becoming the performer described in their Role Description?

Q2.      Quality of Results

Is this partner on the path towards increasing know-how and improving results?

The partners and leaders will arrive at a conclusion, and write an explanation based on the following 4-point scale:

The Evaluation Scale for both questions are:

Level 1:  In comfort zone – business as usual (not improving)

Level 2:  Improvement pace uneven

Level 3:  On the path of rapid improvement

Level 4:  Is a Virtuoso  —  both a master at his/her craft and irrevocably on the path of improvement

My hunch is that very few if any Phillips Corporation partners are 1’s, but let’s take a look at 2. The scale reminds me of another one I helped with at a prior employer. One of the ratings on that scale was “meets expectations”. This sounds a lot like a “C” grade in school. Not bad, but not great. But what if the expectations are extremely high? Then “meets expectations” is really more like an “A+”.

My thinking about “2: Improvement pace uneven” is similar. Really fine performers will have up and down days. I will forget to use the new process, get stuck in an old habit, or get distracted by the many other tasks that need to be done but that don’t necessarily address my priorities. I will still accomplish a whole heck of a lot. Does that make me a 2? If so, then 2 is a very good rating. “3: On the path to rapid improvement” is probably a mark that will be met only rarely.

One challenge as we experiment with this new scale is that we are mostly all used to a 4-point scale from school, where a 2 is “average”. I would like two things from the partners using this format this month:

1.  Forget about the old “ABCDF” grades, and read what the ratings actually mean.

2. Let us know how it goes as you get your head around the concept and have performance dialogues with your partners.

Would also love to hear from readers who are not Phillips partners. What do you think of this approach? Is it “new”, or just new to us? Upsides? Downsides?

Thanks — Bill

 

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6 Responses to When is a 3 a 10? Some new ideas about performance evaluation

  1. Melissa Hyatt says:

    I just read the article on Matt’s facebook wall. A few years ago, I took a weekend relationship building seminar that also used a four level system. I will say that by the end of the weekend everyone was very conscious of their actions and the affects of their existing behavioral patterns versus new relationship contributions and patterns. The descriptions of each level created a motivating mindset. No one person wanted to know they had level one or two relationships and I believe the descriptions of level one and two here will be a motivator as well. I would be interested to know the results. If I can put my hands on the workbook I had from the seminar, I will see what other motivators were included. Thanks for sharing!!

  2. Bill Withers says:

    Thanks, Melissa. Good to hear from you. Let us know what you find.

  3. Bill,
    We use a 1-4 rating system, where 1 is the best and 4 requires you to go onto a 3 month “parole” type system to make sure you improve. Like you, a 1 is reserved for the one or two colleagues who clearly ‘have it’ and continue to shine and add value. A 2 is above average and a 3 is performing to expectation. It used to be a 3 was considered acceptable, until all kinds of dependencies on the grading were introduced: want a raise?…sorry, only for 1’s; want a promotion?…sorry – only with 3 consecutive years of a 2 performance or above. And so it went. Shortly after this system was introduced, it was modified to include a 2+, presumably because we couldn’t stand the shame of being anything less than marvelous, but also because performance marks are given on a curve in which a certain number of people have to be a 2 or lower (ensuring that only the top 10% get raises and other recognition), but not everyone can be a 1. This system seems flawed, and I think it does have flaws, but it sure takes the relativity out of it and let’s you know where you stand in comparison to others. One thing I like to mention to HR when I have the chance is that performance ratings should be quarterly and not annual – things change too much in a year and we are driven by quarterly performance as a business, why not drive our personal contribution on a quarterly drumbeat? I know I know – because we don’t have time to go through the hassle of the rating rounds, building evidence, the moderation rounds and disputes that are an inevitable part of this process.
    So – the thing I like the best about your system is your Part I – “quality of thinking”. This is innovative and hits the nail on the head. If we would all just THINK, then plan-do-check-act, then that’s a job well done. You can forget all about the grades, the 1-4’s and whatever else!

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