Stop Measuring Employee Performance and Start Evaluating This 1 Thing Instead

ValueYour performance reviews are doing very little to impact the results of your organization. Although they are an annual ritual in most organizations, the traditional performance evaluation of whether an employee “meets” or “exceeds expectations” or “needs improvement” is missing the mark. It’s measuring the wrong thing.

Instead of measuring an employee’s performance or effort against some generic set of competencies or how well they did in accomplishing their goals (which are almost always ill-defined or not completely within their control), we should be measuring the value they are creating and adding to the organization.

What does value look like compared to performance? Cy Wakeman’s recent Forbes article sparked an interesting discussion with my leadership team this past week. She has an interesting perspective on what value creation looks like in today’s business environment and I have to say I agree with her. The bottom-line is that adding value to the organization is much more important than meeting the minimum level of requirements in your job. Value is about delivering results that tangibly move your organization forward in fulfilling its purpose and mission. Value is about making you and your role indispensable to the organization, not just showing up to do a job.

Here are five practical ways you can move from just doing a job to truly adding value:

1. Adapt to change, don’t resist it – What did you say? You don’t like change? Get over it! The days of landing a job at a large company, plugging away for 30 years to earn your pension and a gold watch, then retiring to play golf or do needle-stitch the rest of your life are long gone. It’s 2015, not 1955. Flexibly adapting to change is one of the most critical skills needed in today’s business environment. What you’re doing today may not be what you’re doing tomorrow. The goals of the organization today may look different tomorrow when a new competitor enters the arena or economic conditions change suddenly. You have to be ready to adjust the sails and move in a new direction at a moments notice.

2. Keep improving your skillsEvery day at work is a job interview. As employees, all of us should expect our employer to help develop us in our role, but career development should be seen as a privilege, not a right. Organizations have an obligation to provide the right training, tools, and resources to enable employees to maximize their potential in the job they were hired to do, but career development (promotions, moving into new roles, etc.) is a privilege and is not the employer’s responsibility. Is it a smart thing for employers to facilitate career development in order to attract and retain key talent? Absolutely! But it’s up to you to keep learning, to further your education, improve proficiency in your job, and develop new skills in alignment with the direction of your organization’s goals and strategies. No one else except you is responsible for your career development.

3. Be easy to do business with – Results have to be delivered and you have a choice in how that happens. You can choose to make it hard or easy. Hard looks like staying in your box, not considering alternatives, and religiously adhering to policy and losing sight of the spirit behind those rules and regulations. Easy looks like creative problem solving, understanding the needs of your customer, and changing systems and processes that may get in the way of serving them effectively. Easy looks like developing a brand reputation of being a “go to” person, someone who will find a way to get things done in spite of internal barriers and frustrations. Easy to do business with also means you have a no-drama factor. In fact, your emotional contribution to the organization adds value rather than taking it away.

4. Deliver results – Adding value is about contribution, not effort. Many people work extremely hard in their jobs but don’t necessarily contribute to the organization’s bottom-line. Working hard is a necessary ingredient for success but it’s not the end game. The end game is helping your team and organization succeed. Your hard work needs to translate into tangible results that contribute to the success of the organization. Delivering results means you’re constantly looking for ways to improve systems and processes, both personally and organizationally. It means you’re a problem solver and not just a problem spotter. Are you more valuable to your organization today than you were yesterday? People who focus on delivering results, and not just fulfilling the requirements of a job description, make themselves invaluable contributors to the organization whose worth grows day by day.

5. Have an ownership mentality – How would the value of your contribution be different if you acted like you own the place? Would you be more emotionally invested and passionate about the work you do? Would you produce higher quality products? Would you be a little more prudent or cautious with company expenses? Would you care a little more about the customer experience? People who approach their jobs with an ownership mentality care about these sorts of things. They view themselves as stewards of the company’s resources and work hard to promote the success of the entire organization, not just their particular role, team, or department.

Measuring performance is a good start but we can’t stop there. We have to move toward measuring value contribution and it’s our job as leaders to help our employees see the difference. Most importantly, we as leaders have to see our jobs differently. We have to see our jobs as facilitators of value creation and not just managers of performance.

Feel free to leave a comment and share your thoughts about how you, as an individual contributor or leader, are adding value to your organization.

22 Comments on “Stop Measuring Employee Performance and Start Evaluating This 1 Thing Instead

  1. You can’t measure value if the outcomes of an individual contributor are clear and agreed upon. Value is subjective without clear goals. So I’d assert that you should consistently measure performance, around agreed outcomes that are aligned with the organizations goals. Measuring employee value is a set up without this agreement.

    This is also true to the 5th point, having a mentality of ownership is s romantic notion, but when employees actually start acting like owners, top heavy, higharchy driven organizations freak out and it can become very complicated for that innovative employee.

    In short, value is tricky to measure unless both parties, the organization and the individual, have clearly defined and agreed upon outcomes that are measured consistently and justly.

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    • Jason,

      Thank you for your insightful comments.

      I agree with you that clear agreements on goals and the outcomes needed are necessary to determine the true value of an employee’s contributions.

      What’s not helpful, for the employee or organization, is to settle for just “meeting expectations” on some generic list of competencies that are disconnected from the results the organization needs to thrive. Having an ownership mentality may be a bit of a cliche but the intent is valid – exhibit a higher level of responsibility and commitment to your job beyond doing the minimum to meet expectations on your performance review. Of course that places the onus on leadership to foster an environment where that level of ownership is encouraged and rewarded.

      Thanks for adding to the discussion.

      Randy

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  2. Randy, when I was in my first supervisory role as a manager, my own manager told me I should be looking for ways to return value to the company “equal to at least 1 1/2 times my salary.” I struggled with that for a while, but it was my introduction to “thinking like an owner.” And it changed my entire perspective of employee evaluation. Thanks for a great post.

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    • Hi Pat,

      What a great example your manager set for you. It requires a shift in mindset, but once you make the transition, it expands your horizons of how you can and should be contributing to the organization.

      Thanks for taking the time to comment.

      Randy

      Liked by 1 person

  3. Thank you for the post, Randy. I think you bring another great example of how (what I refer to as) “traditional based businesses” have to start re-thinking how they engage with their employees altogether. Hiring should be done based on specific projects/goals and success should be based on those projects/goals being achieved. We still have employers hiring based on very open ended positions (“Application Development”, for example) versus specific goals (“Developing V3 of the AP portion of our Financial software”). Given businesses still hiring in an open ended way, they are still evaluating employees in an open ended way. If we put more clarity around what someone is being hired to do, we can then evaluate their performance based on hitting the objectives. It just makes much more sense.
    Thanks again – I agree with each point!

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    • Thanks for your comments Lori. It’s clear you’ve thought through this issue and have a good grasp of how leaders and organizations need to shift their mind sets. Thanks for adding your expertise to the discussion.

      Randy

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  4. This is a great read. A great way to keep your job is to show your company or boss that you are helping them make money and make their business successful. The more an employee create measurable, positive, powerful outcomes through their actions, the more people will sit up and take notice. Part of growing your value at work also includes motivating and inspiring yourself to take control of your own career.

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    • Thanks for commenting Ed! It’s all about demonstrating how we are adding value to the organization through our everyday actions.

      Randy

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  5. What a unique take on perf mgmt. This value-delivered approach could also be used to “extend” the traditional process if targets n components are well-aligned to company goals, possibly even serve as differentiator between dead even performers. Thanks!

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  6. I believe that performance targets that are focused on strategic focus of an organisation are already value biased unless the targets of an organisation are misplaced. It must also be noted that when we measure performance, it is employee’s value contribution to the organizational achievement we measure, because a phenomenon called “performance” cannot be measured in itself.

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  7. It seems the same but… it’s not. Sounds very good (and different) to me. To me, “value” is placed one step beyond (and above) Performance. Just one thing to keep in mind: take care with our managers…If they are not (in general) quite good delivering feedback and feedforward, just imagine how trained they should be at the moment of assessing ‘value’ delivered. For them (in simple terms), performance = behavior; but ‘value’ = ?? (tell them that not only money please!)…Thank you!

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  8. Pingback: Stop Measuring Employee Performance and Start Evaluating This 1 Thing Instead | HENRY KOTULA

  9. Not everyone is the same! I think it’s awesome that you suggested that companies start looking at a person’s value they create. Value is a very important quality in organizational performance.

    Alex Jennings |

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  10. A good contribution to this debate Randy. I’ve been interviewing a group of high performing leaders recently and it is clear that the best of them measure themselves almost entirely on value creation for the organisation. It is equally apparent that the systems and processes we have in place to ‘manage performance’ are inadequate for the task. The translation of organisational intent into meaningful, measurable goals remains elusive and too often feels like a barrier rather than an enabler. Part of the issue is the desire to stick to an annual cycle when performance is delivered daily. From my perspective. the most productive performance conversations are the regular check- ins on priorities for the week, what was achieved in the prior week and what has been learned. The resulting re calibration and subtle tuning of approach in light of feedback & changing context is powerful.

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    • Great insights Richard! I agree that regular check-in meetings (we call them 1 on 1’s) is the best way to assess and calibrate performance.

      Thanks for adding to the discussion.

      Randy

      Like

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