by Floyd Rumohr
Performance reviews are a challenge for most nonprofit leaders and managers. Traditional approaches such as skills-based competency evaluations can be time-consuming and not particularly effective according to some compelling research from the for-profit sector.
Jena McGregor of The Washington Post has been writing some interesting pieces about for-profit leadership in general and human resources in particular. One of her most recent is based on a Harvard Business Review report about 360-degree and laborious, once-a-year evaluations. The HBR reported that Deloitte has simplified the process for 10 per cent of its workforce using the following four statements:
- Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus.
- Given what I know of this person’s performance, I would always want him or her on my team.
- This person is at risk for low performance.
- This person is ready for promotion today.
Deloitte uses a 1-5 rating scale for the first two statements and a simple “yes” or “no” response for the last two. Managers respond to the above four points at the end of every project or at the end of every quarter for longer term activities. Time will tell if this will take off at other companies, and what implications, if any, the framework has for nonprofits.
Here’s what I like about it:
- It saves time and could encourage more frequent, formative touch points with direct reports.
- It captures low-performance risk and could trigger a deeper dive into professional development needs.
- Employee performance is reviewed in the context of organizational/programmatic goals.
- The statements are deceptively simple. Just like the Charting Impact framework for organizations developed by BBB Wise Giving Alliance, GuideStar USA and Independent Sector, the statements will encourage discussion and inquiry regardless of where a particular employee falls on the scale.
Here’s what I don’t like:
- The emphasis on extrinsic rewards like bonuses and compensation. Nonprofit team members might be motivated by other factors like mission or culture and not respond to incentives used successfully in for-profit contexts.
- The majority of nonprofits have limited upward mobility options because of their size. Statement #4 could mean that the only way “up” is out.
What do you think? How does your organization conduct performance reviews? What role does the process play in achieving your mission? If a skill learned today could be obsolete tomorrow, then what should the basis be for employee performance at your nonprofit?
Get the Employee Assessment Instrument in the Rumohr and Clarke Video and Template Library. Click here and select title 5.1. Although Deloitte uses a 1-5 scale from “Strongly Agree” to “Strongly Disagree,” we recommend a 1-4 scale to discourage responders from gravitating toward the middle.
References and recommended reading:
— “What if you could replace performance evaluations with four simple questions?” by Jena McGregor, The Washington Post, March 17, 2015: http://www.washingtonpost.com/blogs/on-leadership/wp/2015/03/17/deloitte-ditches-performance-rankings-and-instead-will-ask-four-simple-questions/.
— “Reinventing Performance Management” by Marcus Buckingham and Ashley Goodall, Harvard Business Review, April 2015. Accessed online March 17, 2015: https://hbr.org/2015/04/reinventing-performance-management.