CEO Performance Evaluation
Caroliso
352 Posts
Our Board of Directors has asked me to create a performance review process for our CEO that involves his own assessment of his performance, feedback from relevant staff, and their own comments of course. This being a very laid back, hands off board, there has been nothing formal or consistant up to this ponit.
Do any of you have a process and/or documents that you are willing to share, or a reference for such a process? I am particularly looking for suggestions on how to select staff to provide feedback, what they should write, and how that iinformation gets shared with the CEO
Thanks in Advance, Carol
Do any of you have a process and/or documents that you are willing to share, or a reference for such a process? I am particularly looking for suggestions on how to select staff to provide feedback, what they should write, and how that iinformation gets shared with the CEO
Thanks in Advance, Carol
Comments
You have touched on some rather important issues, so I will go on a bit. I apologize in advance for the length -- though this is really not nearly enough. Feel free to call if you want to talk about any of this more.
First, I am guessing from the tone of your comments that you are not a public corporation. If you ARE a public company, then you really need to stop and look at this much more carefully, as board oversight and CEO accountability are rather major and sensitive issues for such firms. Assuming you are not a public firm . . .
Second, I find myself wondering if the laziness of your board is such that they are wanting to put you in the hotseat instead of taking responsibility for what is simply their only major job: oversight of the CEO. Enough of my rant, but be sure to not take on that for which they are paid and positioned.
Third, as you suggest a process, I think you are mixing up a couple of issues that must, at least initially, be kept separate.
A. It may well make sense to have a 360 process with the CEO, wherein various staff give feedback on his/her performance -- but I would urge, especially if there has been no such feedback before, that that this be a developmental process initially and not tied with any appraisal process. I would further urge that either a skilled member of the board or, better, an outsider be engaged to facilitate. That will involve setting the ground rules and determining an appropriate process, ensuring confidentiality, coaching the CEO through the feedback, and providing any follow up if that is necessary. Generally, you will have more luck with an outsider, which gives better assurance on confidentiality questions.
There are large number of reference materials available on doing a 360 process. I would suggest, in particular, those produced by the Center for Creative Leadership -- who could also have a great 360 tool, can manage the process and provide the coaching, by the by (as could, with all due humility, HR Futures).
Were I you, I would manage this process personally only if I had supreme self-confidence, excellent relationships with the CEO and board, and no pressing need to keep my job.
It may be that at some point the CEO 360 process will become a part of the CEO evaluation. But to do so initially is a lose-lose: it will lead to a very limited and potentially biased "appraisal" . . . and a lousy 360.
B. A CEO appraisal can be quite valuable -- and contrary to feedback from most participants in appraisals, indications are that boards and CEOs generally give good marks to the value of a careful appraisal (I believe you can find some of this research through the Center for Effective Organizations at USC). It consolidates and reinforces organizational goals, builds communication, and allows continuing development of someone (the CEO) who can become stagnant in what is often the most isolated job in the company.
Initially, you may want to use an outsider to help set up the process of the evaluation, but this is not rocket science. I would urge that they begin at the beginning -- start with goal setting and criteria. The board needs to go through the process of specifically deliniating their goals for the organization, and any process/capability criteria for performance (attending to all the normal SMART issues in goal-setting). It is important that they not just be financial goals.
Where this really begins can vary. Quite often, the first draft is done by the CEO in consultation with his/her staff. An appraisal process we conduct for a university president each year is premised in large part on broad goals outlined by a major association of university boards. However begun, the final set of goals/criteria needs to be formulated with and signed off by the CEO and the board, together. Quarterly meetings with the exec comm of the board to review progress would generally make sense, mid-year at minimum.
At the end of the year, the CEO will submit a self-appraisal, and the board or comp committee chair would solicit quantitative and qualitative feedback on the various goals/criteria from board members. The executive commitee or compensation committee will actually deliver the written comments and conduct the oral appraisal, supplemented often by private conversation with the chair or some other board member appropriate to provide some degree of coaching.
C. We have not touched on the myrid issues of setting base and incentive compensation in relation to the appraisal process. Let me end here before exhaustion sets in and simply note that if you are going to tie this in with the hornets' nest of compensation management, you really need to demand the resources necessary to do this right and avoid unnecessary battles.
Again, feel free to call if we can be of help.
Regards and best wishes,
Steve
Steve McElfresh, PhD
Principal
HR Futures
408.605.1870
As the President & CEO of a company I would echo the comments from Steve. It appears that the board may require some education about the entire process before you present a tool to them to use in evaluating the CEO. Nothing can be more disruptive to an employee, even a CEO, than being evaluated on performance criteria that have not been expressly delineated and agreed upon in advance. To be candid, at this point, the 360 eval is only valuable in assessing the personality and management style of the CEO since the respondents are not evaluating performance against preset criteria, rather just opinions about arbitrary points of interest. The CEO may be doing an excellent job of running the company, but be doing it in a manner that his/her employees don't like. Personality factors are not as important as the results that he/she brings to the table. Measurable Performance criteria such as: financial results, quality of product, employee satisfaction, customer satisfaction, and compliance with federal, state and local laws etc. should be set in advance so if the board wants a 360 eval the persons selected to perform the evaluation know what the CEO was trying to accomplish that year.
I would strongly urge the board to take a long-range approach to this issue. Being laid back is one thing, but failing to fulfill a fiduciary responsibility is entirely another. My performance is tied to the strategic plan that I worked with the board to create. The leadership, staff and I break the strategic goals down into measurable objectives for the fiscal year which constitute some of targets for my performance review. While this is not the forum for my personal process, I would be more than happy to share it with you one on one. Send me an email and we can make contact. [email]pmhceo@shentel.net[/email]
John
What a nail-head-hitter that comment is! Precisely. Somewhere in a dark Cheers-like saloon, there is a wrinkled, bespectacled academician in an unpressed blue threadbare suit still patting himself on the back for having come up with the 360 concept twelve years ago. The only experiences I have had with them taught me that three possibilities will come into play anytime a 360 is launched. They're either a valueless popularity assessment instrument, a personal agenda platform or a pissing contest.
360s can be done well and can be useful, even if they generally aren't.
Don't go the way of the prohibitionists! Just because good beer is commonly misused does not mean it should not be drunk at all.
Must be Friday . . .
Warmly,
Steve McElfresh, PhD
Principal
HR Futures
408.605.1870
While I envy your fried oysters, I don't quite follow the buckboard & patent medicine.
Nonetheless, I accept that your experience with 360s is singularly negative. I also accept your position that neither the contrary experiences of others nor supportive research is likely to change your opinion. Doesn't leave much to talk about on this subject, does it?
So, back to really important part of this discussion, fried oysters . . .
Warm regards best wishes for a great weekend,
Steve
Steve McElfresh, PhD
Principal
HR Futures
408.605.1870
I've also learned that whatever information is gathered if filed away and never used for anything. I think they are too time consuming, costly, and doen't produce any valuable info. They are almost a fad (whose time, I feel, may have passed.)
Sorry guys who do this for a living. I know you beleive in it and may be in a ideal work situation they might work.
Good luck. I am glad I am not having to deal with CEO on this issue. I would think that he wouldn't want to do it either.
E Wart GA