Performance Review Q&A

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Attorney Jathan Janove recently conducted a Q&A session with Howard Goodman, senior vice president of people development at Savage Cos., and George Myers, senior vice president for HR at Zions Bank. Here, they elaborate on their performance review processes.

What performance criteria do you use to provide feedback to your employees?

Goodman: The quarterly feedback sessions, which we call “one-on-ones,” are based on the Savage Leadership Competencies. We identify competencies as the combination of skills, attributes and knowledge that help employees contribute at a high level in the Savage organization. Examples of a few of those competencies include communication skills, problem-solving, integrity and teamwork.

Myers: We begin with the bank’s overall “Wildly Important Goals” [WIGs]—those three or four WIGs that have been established. In both the weekly group sessions and the monthly one-on-ones, the focus is on what each employee has done and will do to bring us closer to accomplishing the WIGs. For example, one year a WIG had to do with increasing total bank deposits. Each department head, regardless of the business group function, would ask questions and encourage efforts to help the bank achieve this WIG. That year, our HR group—despite not being sales officers—ended up bringing in over $250,000 in new deposits to the bank.

Can you elaborate more on the quarterly one-on-one sessions at Savage and the employee performance meetings at Zions?

Goodman: One of the foundational components for effective leadership is to provide those being led with clear expectations about what success looks like and then to provide feedback on how actual performance compares to those expectations. While most leaders feel like they do a good job of providing feedback to their employees on a regular basis, when you survey those receiving the feedback, they feel like the frequency and the quality of the feedback are severely lacking. Having a quarterly scheduled feedback session where expectations are reviewed opens the dialogue for regular, ongoing discussions between the supervisor and direct report about successes and shortcomings. A supervisor often follows up on progress between the quarterly one-on-ones. We have some specific tools we use to assess our employees, which then generate great discussion around the results of those assessments. We clearly communicate that these particular assessment tools are used for personal development discussions, not for discipline or for job assignments.

Myers: The WIG sessions have two components: weekly group sessions and monthly supervisor-employee one-on-ones. The group sessions involve peer-driven efforts more so than management-driven. Each employee shares their success story and other efforts from the previous week. Afterward, the employees make commitments for the following week toward achieving the WIGs. Going back to the prior example I gave, one of my HR officers went in for a dental procedure and came out with her dentist agreeing to deposit his money in Zions Bank—while hopefully getting her tooth fixed, too. Other employees’ engagement increased when we all celebrated her success. As for the monthly one-on-ones, they focus on clarifying expectations, addressing any performance gaps, recognizing progress made and assessing the path ahead.

What about documentation?

Goodman: The supervisor is given a binder with forms to record the date of each session, notes and discussions related to the goals, and any follow-up items that articulate who does what by when. The form, by design, does not allow the supervisor to check off boxes—for example, “poor” to “outstanding”—but it does require recording the percent completed of each goal, and written narratives about progress. Reports of one-on-ones are reviewed by the senior executives of the company.

Myers: Each manager receives a weekly e-mail asking him or her to confirm that the group session was held and to provide any comments regarding progress, obstacles, etc. At the monthly one-on-ones, we use the “Triple Two” technique from your “8 Deadly Sins of Mismanagement” program [Janove’s lecture on this topic is available on YouTube]. It’s an exchange regarding what two things the employee and supervisor should start, stop or continue doing to ensure progress on the WIGs. This exchange gets written up. Disciplinary matters are documented but are dealt with outside the WIG feedback program. We don’t require annual performance reviews; however, individual managers may use them if they desire.

How do you handle resistance to the process?

Goodman: We have relatively little resistance to the process once participants understand that the underlying assumption around giving feedback is for personal development and improvement. The first few feedback sessions between the supervisor and the direct report are designed to establish and build a trusting relationship. Once that relationship is built, the process of giving and receiving feedback is much less threatening.

Myers: We make it clear that when it comes to the WIG process, “That’s not in my job description” is an unacceptable response. For example, when the increased bank deposits WIG was first announced, there was some resistance in my department: “I’m in HR, not sales.” Everybody soon got on board, however, as it became clear that this goal was important to our overall organizational success and did constitute one of the criteria on which our department and employees would be evaluated.

What kind of time commitment is involved?

Goodman: It depends. For a front-line direct report, the supervisor may only spend 15 minutes to 20 minutes per quarter after the initial relationship-building sessions have been completed. When developing the relationship, or in more complex job assignments, the quarterly session may last one to two hours. While one to two hours per quarter may seem like a lot of time, it is still only a four- to eight-hour annual investment in that employee.

Myers: The weekly group sessions average about 10 to 15 minutes. The monthly one-on-ones typically range from 15 minutes to an hour. We haven’t received any complaints that the process is too time-consuming. In fact, managers and employees report that they have been more efficient by spending this time to regularly focus and refocus on the WIGs.

Does your system tie into employee compensation?

Goodman: Yes, it does, but not normally into base compensation. We offer compensation bonuses linked to achieving goals. In some cases, the bonuses are paid quarterly, in conjunction with the goal achievement.

Myers: Not really. We consciously tried to separate the process from pay to avoid the “give me the feedback but show me the money” problem. Once a year, we assess compensation according to four factors:

• The employee’s current compensation in relation to the internal and external market.
• His or her overall performance.
• Budget accountability.
• Impact on client retention.

What would you recommend to an employer interested in upgrading its performance management system?

Goodman: Make sure that your system has clear expectations, is as simple to administer as possible, and is tied to the company strategy—that is, it ultimately leads to being able to serve your customer more effectively. The effectiveness of the system will be realized if supervisors and subordinates feel they can have regular, ongoing, meaningful discussions about how to improve individual and company performance.

Myers: Don’t begin with a performance management system. Instead, identify the behaviors that will drive your business in the direction it needs to go. Then develop a system that will encourage and promote those behaviors. Unfortunately, HR often gets the process backward. Instead, HR can add real value to the organization’s bottom line by helping leaders identify core goals and the actions employees need to take to achieve these goals. Doing so will put leaders and HR professionals in the proper position to develop a feedback system that zeros in on those necessary behaviors and actions.

Goodman and Myers are happy to respond to HR professionals who want to learn more about the performance management processes at Savage Cos. and Zions Bank. Their e-mail addresses are Howard@SavageServices.com and George.Myers@ZionsBank.com. The interviewer welcomes reader response to this article and can be reached at jathan.janove@ogletreedeakins.com.