Performance Looking Low...Try MBO

Attention Leaders and Small Business Owners!

Picture this for a moment – you are about to enter your yearly performance review.  You have no idea where you stand.  How does that feel?

Let me answer this for you – it feels pretty terrible.  Your feelings about it range from “I’m doing OK” all the way to “I’m getting fired”.  It’s probably causing you some anxiety, and causing you to generally hate performance review time.  Assuming your reviewer feels you are performing OK, you will probably get some mediocre feedback, and leave the review session just to work another year and end up in the same anxiety filled discussion with your supervisor next year.  It’s no wonder that most people hate performance review time.

Now…picture that you were given 5 distinct goals and objectives to achieve above and beyond your daily tasks and your boss outlined what success looked like against all 5 goals.  Going into your review, whether you nailed all 5 or not, at least you know where you stand and can appropriately prepare for the discussion with your manager.  Now, let’s take it a step further and brainstorm…what could make this process even better in terms of managing your performance?  Let’s say you got to be involved in the setting of those annual goals – how would you feel then?  It would be pretty fair to me at the end of the year, particularly when I had a say in the goals that I set out to achieve.  In addition to feeling fair, I would be appreciative that I knew exactly what I had to do to meet (or even exceed) expectations at work.  In this scenario, it’s up to me how successful I am in my career.

Academia calls this process “management by objectives” or MBO.  It a process first conceived in the 1950’s, and while some consider it a dated process, I argue that it still has a place today.  I would caution that if you use MBO, you should be aware that context can sometimes be lost if not properly managed (i.e. availability/quality of resources and relative buy-in by leadership/stake-holders).  I also argue that ensuring goals are SMART is essential to making the process effective.

Are you ready to make a change in your leadership style?  Are you interested in implementing MBO for your team or organization?  Not exactly sure where to start?  I recommend business owners look at what the organization needs to accomplish over the course of the year for you to define it as a successful year.  This is an entire process unto itself, deserving of another post.  However, I would assemble your leaders if applicable, and ask where they want/need to be at the end of the year for their piece of the puzzle to be successful.  They should be prepared for such a meeting by gathering any necessary information from their subordinates.  Make sure the voices of your front line are heard when setting organizational goals – you’ll be further along as a company, and likely better serving your customers.  Be prepared for, and encourage brainstorming – organization of the company level goals can come later.  I’ve seen companies come away from these sessions with anywhere from 5-50 organizational goals (depending on the size and complexity of the organization). 

Now we know what needs to be achieved, but we need to decide who is going to achieve what.  If you have leaders in your organization, divvy up the responsibilities according to who has strength in particular areas.  If those leaders have teams, then it is their responsibility to divvy up responsibilities among team members to help the department best achieve results.  Now, we remember that MBO is an inclusive process.  So while the organization may dictate WHAT needs to be achieved, the employee may have great ideas regarding HOW.  Actually, they probably should…that’s why you hired them, correct?  While collaborating, it is the responsibility of the manager to ensure the goals meet SMART criteria (specific, measurable, attainable, results-oriented, and time-bound).  Call on staff to be creative in the ways they help solve the company’s problems, but make sure it’s done in a way that does not compromise values which may be important.  Running someone else over in order to achieve your goals is not the right way to go about it.  Also remember that if you have staff that is frustrated by processes needing improvement within the company, finding a solution can be part of their goals.  Call on your staff to do more than identify problems, make sure they’re helping you solve them also.  Again, this should be why you hired them.

Ask your employees to be honest about their performance against goals and objectives.  Most of them will be, and may even be harder on themselves than the manager by not accounting for circumstances outside their control.  You must do this as their leader, and re-calibrate them if it happens to keep them on track to achieving what is necessary.  I recommend a minimum of a mid-year session to review goals and help make sure everyone is on the same page.  Remember, I called this a process earlier, which means it’s ongoing, and not an event.  Some managers use the event model to assess performance and give feedback in a manner where they just can’t wait to see the expression on an employee’s face when they read it.  That’s not the point of performance management, and is a waste of your company’s time.  You should never feel surprised in a review session – you should know EXACTLY where you stand because you have been measuring yourself and receiving feedback regularly.

If your organization would like assistance with implementing MBO or goal setting processes, please contact me today!