When Elizabeth Duffrin got the word from her bosses that the company needed a better way to evaluate performance, she developed one — and got great results.
The tough message came down from upper management: We were in a dogfight with our competition, and every part of our operation – including performance reviews – had better contribute to improving our operation.
Our performance-review process had been pretty much by-the-book: once a year, with a raise determined by the rating in the review.
It was clear, however, that the reviews weren’t leading to improvement. We decided that cosmetic changes weren’t going to work. We had to take some bold steps. How bold? How about dumping annual reviews altogether? We did that – and more.
Shorter is better
When we made the decision to get rid of annual reviews, we knew we had to find a results-oriented system to replace it.
Our answer: monthly reviews.
We didn’t call them that; the new name was “monthly goals evaluation.” Yes, monthly. That gave us quicker and better information on when we needed to change and make improvements in any part of our operation.
OK, so we knew how often we were going to do appraisals and why we were doing them that often. But we also had to figure out what to appraise and how to measure it.
When we analyzed our performance standards under the old system, we realized most of the standards were just too soft – there was little or no way to measure improvement or dropoff. We needed numbers – hard, realistic numbers.
That’s what we told all our supervisors. They:
- had to come up with monthly numerical goals for each employee, and
- involve each employee in setting those numbers, so no one would feel as if the goals were dictated.
One more thing we told them: No one will suffer for not making a numerical goal. Instead, we’ll look at why the goal wasn’t met and what we need to do to meet it. Then we’ll determine raises based on overall progress during the year.
Did it work? Well, after a year under the new system, we increased revenues and surpassed our original goals for profitability.
Further, we didn’t have to lay off anyone. We found our increased productivity allowed us to do more with fewer people, meaning we were able to use attrition to cut employment.
And now, monthly goal evaluations seem as natural to us as the sun rising every day, rather than some big change.
Elizabeth Duffrin, Reno, NV