After considerable work and consultation, we recently developed our own Performance & Objectives Management Policy Statement and thought that it may be of interest to other business owners and managers.
We use the terms Objectives, Outcomes and Goals interchangeably.
The policy below has been developed to accompany the simplest possible reporting system of a table included in a Job Description (see more below). Some minor changes may be required in the case of businesses that use cloud based systems.
Principles and Policy
- The ability of a business to achieve its Broad Objectives is a function of the ability of each Individual (or each Role) within the Organisation to achieve their Objectives. (Think Julius Caesar; think a Jigsaw Puzzle)
- We believe in shooting for the stars but being happy with landing on the moon (although performance is measured against past – see below). This approach should result in motivation and working towards a purpose rather than demotivation. (Remember Canadian Hernia Hospital with 98% success rate).
- Objectives can be cascaded down from your direct report OR self set
- Where objectives are cascaded down, the individual is being asked to take on the Objective. If the individual does not consider that to be part of their responsibility or cannot complete in required time, then they will advise the Direct Report within 24 hours.
- Objectives setting will follow 2 rules:
- be based on MAT – Measurement, Aligned (to the organisations overall objectives) and Timebound
- objectives will begin with a timebound word such as By, When, Every, Within, After, Each – or on rarer occasions – Ongoing.
Note that if the Objectives are cascaded down from your Direct Report AND you follow rule (ii) of starting with an appropriate timebound word, then all you need to worry about is whether they are “Measurable”.
- Objectives and Performance are inextricably linked. You can’t talk about one without the other. And you can’t measure one without the other.
- Objectives review and performance measurement will take place as follows:
- each Friday (in a place where the individual so chooses OR place agreed with their direct report
- this will help with (1) tracking achievements, and (2) build esteem
- by the 4th of each month for the previous month
- very 6 months for a more major review (see more below)
- Individuals are responsible for measuring whether their objectives have been achieved and for setting up necessary measurement systems (although in some cases measurement systems will be set up by or in conjunction with their direct report eg where 2 individuals have the same objective, eg Op data entry)
- All of the above will also help individuals to develop great Resumes of References or Testimonials/Case Studies. (Should they at some stage decide to leave Distil, they will have a great chance of getting excellent work elsewhere)
- Unless otherwise agreed, all action to be taken within 72 hours (called “usual”).
- all reference to ‘hours’ is ‘business hours’ based on Sydney time (ie excludes weekends)
- Unless otherwise agreed, budgeted time for one off jobs is 1 hour. (If you need more than 1 hour, then advise your Direct Report.)
- Performance shall be measured as a function of 2 things:
- Objectives Achieved in Comparison with Past
- Monthly report shall be in the following format. this table can be kept in the Job Description for each role (along with Objectives):
Outcome Progress EXAMPLE 1: 1a. By 15 July we have identified our top 5 Marketing & Sales Projects EXAMPLE 1: July – completed EXAMPLE 2: 1c. For Sept 13, we have achieved monthly GPAMC of $35,000 EXAMPLE 2: July – See above. GPMAC for July steady
- Monthly report to include what (if anything) the individual needs to continue working towards their objectives. This report need not be long or extensive – eg sometimes one word or line. Here is an example of what the Bookkeeper might report to the Finance Manager:
“Delays this month due to problems at bank. Need to either take XYZ action or change Objectives”
- The Purpose of the 6 monthly review will be:
- Clarify major objectives for the next 6 months; and
- Help the individual get to a position where they have maximum chance of meeting those objectives
- As part of the 6 monthly review the Individual and Direct Report will score the Individual’s performance based on the 5 Level Performance Scoring System. (The Individual and Direct Report will separately do Scoring and then compare results). The purpose of doing this, in the context of this System, is simply to help the Individual and Direct Report to decide how well they are placed to achieve their Objectives over the next 6-12 months. (The Scoring System will also be used for Salary Review purposes, however, this is a separate function.)
- The first 6 monthly review will be due by November 2013.
We hope this helps. Should you have any questions, let us know.