Personal Objectives, Performance Evaluations and Employee Ratings

Every year again, the phase of setting personal objectives comes. Because of  to the huge effort behind it, more and more people are wondering how meaningful that is; especially in a lean and agile working environment.

In fact, setting personal objectives are used today in almost all organizations and are often mandatory. This means that even if they make only limited sense, the question should be: how can personal objectives be meaningfully used and how could meaningful objectives look like?

Where does it come from?

  • Management by objectives (steering by goals) was introduced by Peter F. Drucker in the 1960s
  • He had the idea of breaking down top level goals to departments, teams and individuals
  • (Mis)used as rating system for the performance of individuals with direct influence on bonuses and promotions
  • Because it’s so commonly used, it is often not questioned

The mindset behind performance evaluations

  • “We want only the best people and get rid of the low performers”. This should lead to success behavior
  • Many systems press managers to rate someone below average, if somebody else is rated above average.

Personal evaluations drive people to compete against each other, not to play together as a team

What are today’s goals

  • Achieve the milestone Y at time Z in project X.
  • Bring the organization forward so that it successfully launches product P by time Z.
  • Successful creation and test of the prototype R until time K.

Benefits of these goals: They are easy to create and review. Disadvantages: As the delivery times and contents change very fast these days, either the goals have to be constantly improved or the supervisor only assesses the initial intension.

OKR as a New Work approach?

OKR (Objectives & Key Results) helps changing goals frequently, but unfortunately it doesn’t introduce better goal types. In the essence, OKR tries to follow the change rate of the Product Backlog. I’ve seen bad examples that  just copy the Product Backlog on a high level.

Goals about business, product development and projects are no longer needed in an agile environment, since those are defined by the Portfolio-, Product- and Team Backlogs

What is a good goal?

Good goals should be achievable but also challenging. So what is a good goal:

  • Increase the number of units sold by 5%: Why not 3% or 10%? And, reaching this goal on the expense of what? Quality, margin?
  • Decrease product cost by 6%: Again, why not less or more? What about the other factors (that I might not have under my control)?

OK, since we don’t want local optima, we set several different stretch goals that individuals have to balance. But balancing means, that the individuals will lose in all goal areas or they lose in all areas but one (which is again a local optimum)!

A better way of setting goals is to rate behavior, not success!

We could write exactly those behavioral points into the goals that are “actually self-evident” but ignored by some employees, perhaps because other things are in the goals and are therefore considered more important.

  • Strengthen and enable teamwork
  • Think entrepreneurially
  • Distribute knowledge
  • Improve the team and the personal skills

A clear career path guides the personal goal setting process

Acquiring knowledge and skills of the next step in the career path is never a bad idea, but needs career path options for all three directions:

  • A Career path for Product Owners (and Project Managers)
  • A Career path for Servant Managers (and Line Managers)
  • A technical career path for Engineers

All career paths should have the same granularity (i.e. career steps)

 

Considering all of the above …

Examples of good goals

Three suitable goals for Engineers (Working Team Members)

  • The musketeer goal: Behavior holding the team success higher than the personal success
  • Team behavior goals (the same for all team members)
    • Highest possible transparency
    • Balance of built-in Quality and Innovation (Carefulness vs. Courage)
    • Balance of Predictability and Speed (time-to-market)
  • Team behavior that holds the organization’s success higher than the team’s success
  • A goal about personal skill development (social or technical)

Four suitable goals for Product Owners

  • The musketeer goal: Behavior holding the team success higher than the personal success
  • Generating and prioritizing Backlog items to best improve the value of the Product (or to best suit the priority of the superseding Backlog), while …
    • balancing short term wins against enabling long term successes,
    • balancing risk mitigation against innovation chances
    • increase customer value with less effort
  • Generating transparency of Backlog and Product to Stakeholders to enable fast Feedback
  • A goal about personal skill development (i.e. being a better PO)

Five suitable goals for Servant Line Managers and Scrum Masters

  • The musketeer goal: Behavior holding the team success higher than the personal success
  • Enabling and coaching the Team and the PO in such a way that they can improve their job
  • Improving the organizational and team’s processes and environment, so that the organization becomes more effective as a whole
  • Demanding rule discipline of the team, the PO and the Stakeholders
  • A goal about personal skill development (i.e. being a better SM)

Who evaluates the achievement of goals?

Today, the line manager usually rates alone. But she often has little contact to the employee, because most of the work is done within projects, and she has to interview team colleagues and project leaders.

Why shouldn’t team mates directly rate the behavior of people then? This is very simple by an anonymous survey. Especially for common goals within a team, all team members may allocate goal points to the other team members to indicate their part of contribution.

A few hints about personal feedback

  • Feedback should be given in both directions
  • New Work also means that Managers get feedback from “their” people
    • How well and fast are they in solving problems?
    • How well are they in supporting and improving the organization?
    • How well are they finding new employees and keeping them in the organization?

 

I would be happy to get feedback to these ideas and even more happy if the ideas help you finding and defining better goals.

 

[Photo by @SamuelZeller from unsplash.com]

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