By Glenn Tecker, Chairman and CO-CEO, Tecker International, LLC
By instituting an accountability program for the CEO, associations demonstrate a strong commitment to achieving, recognizing, and rewarding competence. That commitment motivates all professional staff. This approach has significance for organizational culture. How the CEO is evaluated is a reflection of whether the enterprise’s expectation for its chief staff officer, and by association its senior staff, is that of an administrative manager or a partner in leadership.
CEO evaluation is one of the instances where there are no best practices. However, there are effective practices and practices that don’t work. Effective practices share some common characteristics that can be used both as design specifications for good CEO evaluation and criteria to evaluate existing appraisal processes. The association has a right to expect that they will be held accountable for performing their jobs effectively. Establishing a performance evaluation program and holding the CEO accountable for success should be an organizational priority.
An effective accountability program enables associations to:
- establish sound and practical performance appraisal,
- link compensation to decisions about performance effectiveness, and
- link evaluation and recognition of performance to achievement of organizational objectives.
The best CEO evaluation approaches merge the association's strategic planning process with its appraisal of professional performance. If designed properly and implemented seriously, it provides a structure for purposeful and continuous attention to effectiveness. Performance is evaluated in a framework that promotes successful management and balanced attention to achievement of mission, efficient operations and successful personnel.
An effective CEO evaluation program demonstrates nine important characteristics that represent goals every association has, or should have, regarding top management.
Good CEO evaluation involves collaborative decision-making that results in shared accountability between governance and management levels of the association. Really good CEO evaluation employs an approach that can be cascaded through the entire professional staff. Critical objectives are identified through data collection, analysis, and discussion. Decisions about what needs to be accomplished are understood and owned by everyone. Plans for achieving identified objectives are developed systematically by the person responsible. He/she develops those plans with those who report to them and with their superior. Collaboration is built into decision-making procedures.
Merging planning and evaluation
In good CEO evaluation programs, planning and evaluation activities are merged. Standards that will be used for measuring accomplishment of objectives are determined as part of the planning process.
The process of developing standards helps to clarify the objectives, and to test the feasibility of plans proposed to achieve the objectives. The standards, suggested by the staff responsible, will be used to judge whether plans were implemented successfully and whether the implemented plans achieve their purpose.
Early warning system
Because planning and evaluation activities are integrated, a good CEO evaluation program has a built-in early warning system. Formative evaluation lets planners, doers, and evaluators monitor whether plans are leading toward achieving stated objectives; it lets decision-makers correct a plan during its use rather than waiting for it to fail. A good CEO evaluation program has an inherent bias toward success because it promotes continual adjustment of activities to improve the probability that desired outcomes will be achieved.
Good CEO evaluation promotes coordination of activities among governance and management and among different staff units. Planning and decision-making are collaborative in nature, and because written statements of objectives, measures, and plans are produced, each organizational unit can understand what the other units are doing and why. This process increases the probability that the association’s program priorities will not be ignored.
Clear and common understanding
By coordinating activities among the association’s units, good CEO evaluation results in a clear and common understanding of “where we’re going,” and “how we’ll get there.” That promotes understanding of group and individual roles and commitment to the association’s central objectives.
Focusing on critical objectives
Good CEO evaluation enables an association to focus on its critical objectives without neglecting critical ongoing activities. It structures planning and evaluation, with a specific focus on outcomes that are defined collaboratively as most important, and then lets busy and complex associations attend to them. When objectives, plans, and measures are written, the association can demonstrate its success in achieving objectives defined as most important. The association is holding itself, as well as its CEO, accountable for accomplishing priorities.
Preventing surprises during summative evaluation
Because the good CEO evaluation process is formative in nature, adjustments to action plans increase the probability that objectives will be achieved. If an objective is achieved partially or not at all, those involved in the planning, implementation, and formative monitoring of progress will know it far ahead of the final evaluation. When it’s time for summative evaluation, the responsible staff member and superior know when an objective isn’t being achieved and actions are probably underway already to respond.
A good CEO evaluation approach that integrates planning and evaluation produces a clear and defensible record of performance by the association and by the CEO and staff. By linking management accountability to performance compensation, associations can establish both monetary and non-monetary reward systems for effective performance. Good CEO evaluation - and a staff performance appraisal system consistent with it - contributes to sound personnel decisions about selection, assignment, promotion and retention.
Time well spent
Developing and executing a good CEO evaluation program takes time, but it is time well invested. It can be implemented and debugged in a pilot first year.
Good CEO evaluation soon becomes the accepted means for focusing continual attention on the achievement of important outcomes.
Good CEO evaluation is not just another faddish management technique. It takes full advantage of successful applications of several proven governance and management techniques and blends them into a practical process. Good CEO evaluation significantly enhances the probability that the association’s CEO and senior managers will be successful in achieving their declared and approved intentions.
Glenn Tecker is co-hosting CSAE’s Your leadership team: Who says you are doing a good job? webinar on September 16, 2016. This webinar will give the leadership partnership an opportunity to explore the effectiveness of their evaluation process for both the chief staff executive and the board. How effective is your current process in assuring that continuous improvement will help your organization achieve success? Structured dialogue will allow cool heads to prevail over what is sometimes perceived as a hot topic.