This post first appeared in the Corridor Business Journal.
One of the responsibilities of the board is evaluation of the organization’s chief executive.
In most organizations, performance evaluation is done annually. Too often, however, the executive must remind the board of this responsibility; in some cases, the executive even provides the evaluation structure and process. This puts the executive in the awkward position of guiding his or her boss. The effective board embraces the responsibility of conducting an annual performance evaluation of its chief executive and develops the systems to do so efficiently.
Because the chief executive is so integrally linked to the success of the organization, it makes sense to tie his or her annual performance evaluation to organizational performance. Therefore, it is critical that the executive’s goals are explicitly stated, rather than simply implied by the strategic plan.
Explicit, mutually developed goals enable the board and its executive to define successful performance for both the executive and the organization, whereas implied goals fail to promote a shared understanding of success or achievement.
How to get started
A simple evaluation process is better than no evaluation process, so the board should start with the basics of setting mutually agreed-upon goals with its chief executive.
The goals should involve measurable, observable behaviors linked to the goals of the organization. Measurable goals ensure that everyone is on the same page about what success looks like; they remove guesswork and perceptions about personality or personal style from the discussion. Once measurable, observable goals are determined, they should be documented and included in the executive’s personnel file.
When it is time for evaluation, the board should evaluate the chief executive on his or her performance in achieving the stated goals. Evaluations are often handled by the executive committee with input from the full board. Boards often ask the chief executive to conduct a self-evaluation as part of the process. Before the evaluation, the board should determine the process it will use.
The process should provide an opportunity for discussion and reflection on lessons learned from the year’s successes as well as its failures. Evaluations that do not promote reflection and learning are a missed opportunity to develop staff skills and build the organization’s capacity.
As the board and executive set goals for the next evaluation period, the board must be clear about areas in which performance improvement is needed. In some cases, the board might work with the executive to develop a performance remediation plan. Once again, goals for performance improvement must be clear, measurable and related to observable behaviors. If the need for performance improvement is critical, the evaluation period can be shortened from the standard annual review to a six-month or even three-month time period.
Once the board has an evaluation system in place, it should not overlook the need to provide regular feedback to the executive throughout the year. Like any employee, chief executives need recognition for jobs well done, encouragement with more complex tasks and immediate feedback when things aren’t going well. It’s critical that the board president and executive committee have a strong enough relationship with the executive to provide feedback and support when appropriate.
With less seasoned executives or for larger-scale projects, it may be helpful for the board president or executive committee to check in more frequently on the executive’s progress toward annual goals. This may be a way to provide support to the executive and his or her growth as a professional. Naturally, the board should take care that this doesn’t drift into micromanagement or convey a lack of confidence in the executive.
Performance evaluations are often avoided because they may involve difficult conversations or because the evaluation process seems time-consuming and daunting. The effective board uses evaluations as an opportunity to strengthen its relationship with its chief executive, to develop staff skills and build the organization’s capacity, and to align the executive’s work with the goals of the organization.