There has been a lot of focus in the past year on Supplier Relationship Management, and rightfully so. As the efforts of Strategic Sourcing initiatives begin producing diminishing returns, SRM is heralded by most to be the next step: focusing more on delivering value to the organization and developing relationships that can produce competitive advantages in the market. However, an SRM policy is only effective if the proper suppliers are in place, which is why it is routinely classified as the next step after strategic sourcing. There is little value in curating and managing relationships with suppliers that are not firmly aligned with your organization’s strategic goals.
This is the last in a series of posts on performance reviews and objective setting for the start of the New Year. Click here to read my recent posts on performance reviews from the manager’s and employee’s perspectives, as well as objective setting for procurement managers.
Are you just joining us? We’re working our way through a series of posts on performance reviews and objective setting for the start of the New Year. Click here to read my recent posts on performance reviews from the manager’s and employee’s perspectives.
If your company works on a calendar year financial close schedule, your Annual Operating Plan (AOP) for 2014 is probably well-developed by now. While these AOP objectives will form a large part of your staff’s goals and objectives, a more comprehensive approach is required for achieving great things in 2014.
Developing and effectively communicating goals and objectives to your staff may be the most crucial thing you can do as a manager.
Just joining us? Last week we looked at performance reviews from a procurement manager’s perspective. This week we are looking at the same topic from the perspective of the person being reviewed.
You will likely have a performance review coming early in the New Year. Some people see performance reviews as “facing the music” while others see them as an opportunity to “toot their horn”. For the sake of your own career, I recommend thinking in terms of the latter.
Review time is an opportunity to display your accomplishments, demonstrate your capabilities, and discuss potential opportunities with your manager. At a higher level, this is also a good time for introspection to honestly access your future with the organization.
It’s that time of year.
Don’t shrink from the performance review process. It’s a time to reflect on the past year’s results, recognize accomplishments, and reset expectations with your staff for the upcoming year.
Purpose of the Performance Review
The primary purpose of performance reviews is to measure individual performance against the goals and objectives agreed to at the start of the previous year. I’ll dig deeper into this idea in a forthcoming post on Procurement Goals and Objectives.
Ask each employee to gather their final metrics and plot them next to their initial goals. This exercise reinforces the department’s goals and objectives to employees. Moreover, upon seeing their results, conscientious employees will honestly reflect about their performance before the actual performance review with their manager.
Structure of the Performance Review
Companies use a variety of evaluation systems, but most follow the same basic format.
A rating is assigned to a small number of essential competencies such as “Accomplishments and Results”, “Planning and Organizing”, “Interpersonal Skills” etc. There’s often an area of the performance review reserved for Manager Comments (see Practical Tips below). Finally, an overall score or rating is assigned to each employee – often the most problematic part of the process for managers.
High-performers naturally want the highest scores. Anything less may lead to pouting or worse. But what if you are fortunate enough to have a whole staff of high-performers? What if your company has implemented the controversial Forced Distribution or Bell Curve process for employee appraisals where you must assign 10% top score, 80% middle, and 10% bottom?
It comes down to judgment. If you’re hamstrung in the above situation, make it known jokingly to your staff that you can only award one ‘Exceeds Expectations” appraisal next year. Use it as an opportunity to introduce some good-natured competition among your staff, and make the metrics as transparent as possible along the way to avoid conflict later.
Executing the Performance Review
Regardless of how warm your relations are with employees reviews should be formal; this is good time to remind both parties of the nature of the relationship and demonstrates how seriously you take their performance.
Allow sufficient time for each employee appraisal. This is the employee’s one on one time with the boss and it should never feel obligatory or rushed.
Keep the conversation focused on the results. Methodically compare each metric or result vs. the objective. Make sure the employee understands your expectation for each measureable.
The conversation need not be limited to cold metrics. It’s also an opportunity to have a personal discussion with the employee about their strengths, opportunities, and aspirations.
The good might be: “You’re excellent at managing a variety of personality types” or “I really like the way you break down complex information to cross-functional groups”.
The bad might be: “I’ve observed that you struggle to communicate with some Engineers” or “You have an opportunity to sharpen your presentation skills”.
For each improvement opportunity, have potential solutions as well as specific examples ready: “I think you would benefit from Extended DISC training so you are better prepared to deal with different personality types” or “ I want to review your next couple presentations with you in advance and show you how to keep slides / topics flowing smoothly”.
The best performance reviews are the ones where your employees leave fired up and motivated for the New Year; metrics alone rarely accomplish this outcome.
- Deploy a 360 or rounded feedback template to the employee’s key stakeholders; this is particularly useful for assessing interpersonal skills
- Dump the essay format; use bullet points and semi-colons to string together short, sharp language when summarizing the employee’s performance; incorporate final metrics achieved in these comments
- The performance review is not an occasion for “gotcha” moments. Like steering a ship, micro corrections are necessary throughout the year. Nothing shared in a performance review should ever come as a surprise.
The following question and response are in the ISM – Purchasing & Supply Chain Professionals group on LinkedIn. If you would like to join either the group or the ongoing discussion, click here.
Click here for part one of this series.
“SciQuest, originally an e-market exchange, went public in 1999 with a $2 billion market cap. Two years later, SciQuest was on the verge of shutting its doors: the gross profit margin was running at 2% and the company was burning $25 million a quarter. With only $50 million in its coffers, this prototype for the dot.com era was on track to run out of cash by year’s end.”
The above excerpt from The American Business Awards 2008 Winners website made considerable references to the areas upon which I touched in my 2005 white paper on SciQuest. Specifically, was the SciQuest value proposition scalable beyond the cottage industry success that enabled it to grow to the point of going public with a $2 billion market cap in the first place?
In my July 10th, 2013 post “Forrester’s Duncan Jones and His Big Bang Theory Relating to Market Evolution” I had made reference to Jones’ comment regarding the IBM acquisition of Emptoris.
Specifically his remark that it was “too early to expect IBM to have coherent plans for what to do with its (re Emptoris’) services procurement product.”
I of course did not agree with the totality of Jones’ position as it appeared he was suggesting that “acquisitions such as the one made by IBM when they acquired Emptoris are largely intuitive and representative of a nebulous fear of falling behind as opposed to being a reflection of a deliberate, forward thinking strategy.”