Performance appraisals—most organizations do them but few, if any, enjoy them. Usually, performance appraisals are an HR-driven process intended to create an objective analysis and development plan for each individual’s work performance. In addition, performance appraisals often trigger increases in compensation. They can include a number of components, from supervisor-driven appraisals to co-worker input and personal evaluations by the person being appraised. But what about performance management systems for leaders, and particularly for business owners, presidents and CEOs?
We have several experiences working with top management and governing boards on compensation and performance, and it is rare when we see a balanced, meaningful and invigorating process evaluating and driving executive performance. Even large organizations often fail to develop an effective approach and they often revert back to politics, arm-twisting and adversarial discussions when dealing with executive performance. In some instances, the governing boards surrender to the direction of the chief executive because they have never received the training or resources to conduct effective evaluations of the executives they oversee. This is a shame when considering the significance of an executive’s performance in determining the overall success of an organization. It may also be part of the cause for the wide disparities that exist in executive compensation today.
How do you define superior performance at the executive level? How do you measure it, plan for it in the future, and maintain a proactive relationship with the executives that drive your organizational results? These are significant questions to be answered by anyone who cares about sustained success in any business.
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