Wednesday, May 7, 2014

Holding Leaders Accountable for Performance

How does your organization hold leaders accountable for overall performance?  Does overall performance include interpersonal relationships and interaction with staff, peers, customers, etc?  Do business outcomes weight more heavily than interpersonal interactions?  If so, how do you deal with a leader who is great in delivering business outcomes but lacking in interpersonal skills?    

Judging a leader’s interpersonal skills can require some thought since their roles are highly intangible with a significant portion contributed to the attainment of goals, organizational stewardship and accountability to senior leaders, board members and stakeholders. 

If you have a leader that routinely performs at a high level by exceeding goals and expectations, their interpersonal skills may be often overlooked, especially if the leaders’ performance has a significant effect on the bottom line.  Executive compensation is often tied to results.  When the results are great, other items may only be consider minor nuances and possibly not get full attention.  This theory holds true for other leaders as well.  Perhaps, the lack of interpersonal skills may not be transparent to the person(s) evaluating the leader. 

A great working relationship between the leader and the individual(s) they report to is important.  They create opportunity and challenge.  The opportunity is a relationship of trust and support where Board members, chief executives and other leaders can have honest dialog about what is being accomplished, where the gaps may be and how to maintain progress.  The challenge is when relationships are too close, overly supportive and friendly.  This sort of relationship can create a reluctance to bring up areas of performance deficiencies and a perhaps a tendency to avoid conflict.           

If there are no standard processes or procedures in place to deal with leaders who are ineffective in interpersonal relationships, your company can find itself lacking in credibility and in an awkward position of being viewed as "do as I say, not as I do" from employees.      

Business outcomes and achievement and attainment of goals are extremely important in evaluating a leaders overall performance.  Effective interpersonal interactions and their ability to effectively lead staff in their reporting structure are just as important. 

Some tools to assist in evaluating leadership performance could include the following:

  • Annual 360-degree evaluations – the leader is evaluated not only by the person they report to, but the staff that report to the leader and the leaders’ peers as well.  In order to get honest feedback, the 360-degree evaluations should be anonymous for employees and peers.  The person the leader directly reports to should also play a part in the employees being selected to participate in the evaluation.  The goal is to receive honest feedback that can be utilized to improve or enhance performance.  Selecting some tough critics to participate in the process can get excellent results on how your leadership is perceived from varying perceptions.  There are some great 360-degree electronic software versions available from a variety of vendors.  This method delivers a full assessment of the leaders overall performance.  This should also be conducted as a coaching session between the leader and the person they report.  Although this is considered a formal process, there should be several coaching sessions throughout the year as well.
  • Regular updates with the leader and the person they report to – these meetings can enhance communication and be utilized to clarify goals and objectives, give status updates, and address any actionable items and concerns.
  • Employee Opinion Surveys – this method gives employees the opportunity to voice their opinions about management, the organization, their specific job duties, their department, benefits etc.  There are specific questions in the survey that are leadership related and can be directed toward specific leaders.  The survey can measure employee loyalty, satisfaction and engagement.  In order to be successful and get true opinions, these surveys should be highly confidential whereas the employee completing the survey cannot be identified.  Feedback and results of the survey should also be shared with employees including any actionable items resulted from the survey.  Surveys that are completed without feedback and results to employees will lose the interest of employees over time.
  • Customer Satisfaction Surveys – this method gives customers the opportunity to voice their opinions and experiences regarding the product or services rendered.  The survey can measure their satisfaction, loyalty and willingness to recommend.  Data from customer satisfaction surveys can be focused on the organization and specific areas of the leaders’ responsibility. 
  • Outcomes – these will include business results, achievement of goals, budget adherence, ability to lead staff effectively, and all of the above.       

If your organization is going through some operational changes in which the goal is to hold leaders accountable, you may think about designing separate processes and procedures for leaders that are independent from regular staff. 

Discussing performance issues with leaders are tough.  The best way to achieve an acceptable agreement is to make sure leaders are aware of the process prior to accepting the leadership role and prepare a set of exit guidelines and procedures should performance expectations are not met.  Below are two available exit options to consider among others for leaders who become ineffective over time.  

§    A notice period – this would be a standard time frame between 30-90 days to turn things around after the leader has been notified of the performance deficiency.  If unsuccessful, then an exit would be the result.  This option would come with behavior expectations from the leader. 
§    Immediate removal – in this case, the leader would be paid out the notice period Vs staying onboard to correct the deficiency.  This option also comes with behavior expectations from the leader as well. 

Some organizations offer a severance package as an option.  The notice period payout could also substitute as severance.  The severance could be in a lump sum payment or salary continuation.  Some organizations give the leader the option to choose.  A severance package serves two roles.  It provides financial support for a specific timeframe for the leader, including an option to continue health coverage while receiving payments (salary continuation option), and it releases the organization from future litigation, which is a condition of accepting the severance. 

Some organizations consider paying severance to ineffective leaders a reward for poor performance and prefer not to choose this method.  This is all relative to organizational culture, goals and objectives.  Other organizations see it as a benefit of being a leader.  Leaders take on a tremendous level or responsibility.  Some will be successful, others will not.  Since their exit is not based on gross misconduct, some organizations consider it a strategy to exit ineffective leaders swiftly and gracefully with a low level of resistance.       

The goal is to remain consistent as possible in your approach and only deviate from the process when there is a potential risk to the organization.  The risks could include, the possibility of destruction of vital organizational documents, written or electronic, breech of confidentiality, negative interactions and speaking badly of the company to employees, customers, suppliers, vendors and stakeholders, sabotaging the company for failure, etc.  These incidentals should be covered under the severance agreement as well.   

Are there any notable and unique methods that your company utilizes to hold leaders accountable?  I would love to hear your thoughts!

Joseph Conrod Sr., SPHR

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