HPMD Bullets
BULLET #9
A PERFORMANCE MATRIX
Early in my career, I worked for a Senior Vice President of sales for a financial information services firm. He used a competitive annual review process that I believe he borrowed from DuPont. The process went something like this:
1. Each district manager would rate their staff using the typical 1-5 scale, with pluses or minuses where appropriate.
2. The SVP would then hold a meeting of the managers to compare and defend their ratings.
3. He drew a two-by-two grid, with Potential on the x-axis and Contribution on the y-axis, each with a low and high cell in the matrix (see the attached sample). Managers wrote the employee names and their rating in appropriate cells. New employees tended to group in the High Potential, Low Contribution cell, since we always had high expectations for new hires, but they required a significant period of adjustment and learning before they could maximize their contribution. High performers that were not promotable in the near-term grouped in the Low Potential, High Contribution cell. The "stars" were in the High Contribution, High Potential cell, while the "Problem Children," to borrow a Boston Consulting Group (BCG) term, were in the Low Contribution, Low Potential cell.
4. Once all the names and ratings were included on the grid each manager had to defend her ratings. Any other manager could challenge a manager's rating. For example, "why is John rated a 4, but in the Low Contribution side of the matrix?" If the consensus was that a position on the grid needed to change, then the change was made. The same was done for the ratings.
5. When the discussion ended, the SVP focused on the upper-right, High Potential, High Contribution, cell. These were the "stars" who merited the highest ratings, and were next in-line for higher positions in the company.
6. The key element in the process was the open debate. Most managers knew the people in other districts, and certainly knew what percent of sales quota each delivered, as well as what the district as a whole delivered. This required a high degree of mutual trust and respect to be successful. It also required the leadership of the SVP as the meeting facilitator. In the end, it ensured that the ratings were fair across the division, and that the group agreed on the star performers.
7. The review meeting also served as a learning session, where expectations about the skills and performance required to achieve the top evaluations were communicated. And it eliminated "grade inflation" and "fluff" ratings by any manager.
The attached file has a blank grid, plus a completed one from an actual session, with fictitious initials and ratings.
HPMD Bullets
Document File
BULLET #9
A PERFORMANCE MATRIX
Early in my career, I worked for a Senior Vice President of sales for a financial information services firm. He used a competitive annual review process that I believe he borrowed from DuPont. The process went something like this:
1. Each district manager would rate their staff using the typical 1-5 scale, with pluses or minuses where appropriate.
2. The SVP would then hold a meeting of the managers to compare and defend their ratings.
3. He drew a two-by-two grid, with Potential on the x-axis and Contribution on the y-axis, each with a low and high cell in the matrix (see the attached sample). Managers wrote the employee names and their rating in appropriate cells. New employees tended to group in the High Potential, Low Contribution cell, since we always had high expectations for new hires, but they required a significant period of adjustment and learning before they could maximize their contribution. High performers that were not promotable in the near-term grouped in the Low Potential, High Contribution cell. The "stars" were in the High Contribution, High Potential cell, while the "Problem Children," to borrow a Boston Consulting Group (BCG) term, were in the Low Contribution, Low Potential cell.
4. Once all the names and ratings were included on the grid each manager had to defend her ratings. Any other manager could challenge a manager's rating. For example, "why is John rated a 4, but in the Low Contribution side of the matrix?" If the consensus was that a position on the grid needed to change, then the change was made. The same was done for the ratings.
5. When the discussion ended, the SVP focused on the upper-right, High Potential, High Contribution, cell. These were the "stars" who merited the highest ratings, and were next in-line for higher positions in the company.
6. The key element in the process was the open debate. Most managers knew the people in other districts, and certainly knew what percent of sales quota each delivered, as well as what the district as a whole delivered. This required a high degree of mutual trust and respect to be successful. It also required the leadership of the SVP as the meeting facilitator. In the end, it ensured that the ratings were fair across the division, and that the group agreed on the star performers.
7. The review meeting also served as a learning session, where expectations about the skills and performance required to achieve the top evaluations were communicated. And it eliminated "grade inflation" and "fluff" ratings by any manager.
The attached file has a blank grid, plus a completed one from an actual session, with fictitious initials and ratings.
HPMD
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