Judgment, Evaluation, Feedback, etc. LO10028

Tue, 17 Sep 1996 21:28:31, -0500

Replying to LO9999 --

Below is a summary report on a benchmarking effort a team at my site
recently completed. Feedback was also provided by some members of this
list earlier this summer. Companies contacted included BMW, Disney,
Federal Express, Ford, Harley-Davidson, Hewlett Packard, Honeywell,
Kimberly-Clark, Levi Strauss, Microsoft, Sandia National Labs, Saturn, and
Walmart. Due to the limited time and resources availble, the surveys were
by conducted informally by phone and were not QC'd by the interviewees. So
we had an up front agreement not to publish the data by company name. All
the companies listed above were more than willing to share their knowledge
and experiences. We appreciated very much the informal sharing
partnerships that were created.

Geof Fountain tfyy93a@prodigy.com


As part of the Performance Evaluation and Coaching Process Improvement

Team's scope, fifteen company sites were benchmarked between June and
August of 1996. This report documents the results of that effort and
includes key learnings and conclusions and data collected on each company.

Key Learnings

Once the benchmarking data was collected, the team's task was to review
and discuss the data and identify similarities and trends. The company
data obtained from the benchmarking interviews was placed on a matrix to
facilitate comparisons across companies. During the team review follow-
up questions were directed back to a few companies to develop a better
understanding of why certain improvements were made. The results of the
team's review of the benchmarking data follows.

* Most of the companies have either recently improved their performance
evaluation/development systems, or are in the process of improving them.

* Clearly defined competencies that reinforce the values and
interdependent behaviors needed of the employees by the company should
form an integral part of performance expectations (as opposed to
time-dated objectives).

* Discussions to determine performance ratings for purposes of pay
distribution can interfere with the quality of discussions for performance
improvement and development. Forced distribution of performance
evaluation ratings compounds the problem. The majority of the companies do
not force the distribution of performance ratings. The contacts at the few
companies that still practice forced distribution expressed frustration
with the results. Some companies have totally separated the performance
evaluation/development process from compensation.

* The 360 feedback process has recently been implemented or is being
evaluated at a number of companies. Informal feedback systems exist in
others. This appears to reflect a growing need to involve peers, direct
reports, and internal customers in the performance feedback and evaluation

* For all companies, significant effort was spent on training managers on
the process. A number of companies also placed an emphasis on developing
the performance improvement coaching skills of managers. Employees were
either formally trained or orientated by their managers.

* There was a wide variety between companies with respect to the non-
exempt personnel performance evaluation process. No consistent pattern
was identified.

* A well-designed process does not ensure success alone. Success is also
dependent on the quality and skill in implementation between managers and
employees. This emphasizes the importance of training.

Detailed Summary

A sub-team of six team members conducted the benchmarking effort. To
ensure consistency in the data collection effort, a standardized
questionnaire was developed and reviewed by the full team. Based on input
from Level 1 managers, thirteen companies (at fifteen sites) were selected
for the effort. Seven sites were in manufacturing, four in hi-tech, two
in service, one in retail, and one was a government site. A text summary
of the data follows.

The number of employeesthat used the process ranged from a site-level of
400 to a corporate level of 63,000.

About half the companies had one common system for exempt and non-exempt
with variations on whether ratings were used for merit compensation for
non-exempt personnel. The other half had separate systems.

Most companies were on an annual cycle. A few had semi-annual or
quarterly cycles.

Excepting one, all the companies used the process for some form of
performance improvement/development.

All the companies used some form of numeric or alpha rating system.
Eleven used overall ratings as a direct input to merit compensation. Of
these, four forced the ratings into a pre-determined distribution. The
other seven did not. The four remaining companies used the process
strictly for development with no tie to compensation and no forced
distribution of ratings. In these cases, the evaluation/development
process was new or recently improved.

Five of the companies used objectives only. Ten used a combination of key
responsibilities/objectives and competencies. The use of objectives were
limited to three to five, were optional, or were open-ended. Various
terms were used in reference to competencies, including behavioral
dimensions, behavior types, core competencies, personal skills, business
transformation imperatives, operations/leadership behaviors, and work

Eight companies have a formal (HR supported process with surveys) or
informal (manager-driven discussions) 360 process either within the
performance evaluation process or external to it. Four are currently
evaluating the 360 process and three have no 360 process in place.

Training approaches varied from company to company. Most have initial and
periodic formal training for managers. In half the companies, individuals
are either trained or orientated by managers. Three companies emphasize
coaching skills in their manager training.

The system most commonly tied to the performance evaluation/development
process was the compensation system as previously discussed. Other ties
included career development, progression, succession, training, and
disciplinary systems.

Process strengths included face-to-face discussions between manager and
employee (4), consistency (3), employee involvement in the process (3),
employee development (3), clearly defined expectations (2). Process
weaknesses included the system as cumbersome and time-intensive (4) and
employee dissatisfaction with forced distribution of ratings (3).

In about half the companies, the forms were customized by job type, ie,
manager, professional, hourly, clerical, etc.

Improvements being considered or planned included evaluation of 360
process, improvement in hourly process, improvement in forms, and
de-coupling the direct tie to compensation.

The forms were considered user-friendly at eight companies and not
user-friendly at three locations.

Most companies had not or were not measuring the effectiveness of the
process. Two companies receive feedback on this system through annual
employees surveys

Words of advice and lessons learned: drop forced distribution/rankings
(3), use a consultant for 360 process design, and involve the users.


Geof Fountain tfyy93a@prodigy.com

Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>