I am not and never have been a fan of annual appraisals. It’s rather like running your business only on looking at the end of year results and hoping that we can make any adjustments that for issues that come to light. The answer is regular and formal one-to-one meetings.
These one-to-ones are not to the leader’s agenda. It is the individual who determines the topics for discussion and the leader listens and makes comment as appropriate. Not an easy task for the leader to keep relatively quiet but a very important one.
As I said before, business is or should be simple and it is the interaction with people at which we are not always very competent that often gets in the way and leads to complications.
Over the years I have come across a couple of very simple and very subjective assessment techniques which I have found invaluable for any leader to use.
· The PAEI Code assessment
· The 9½ rating assessment
The PAEI method can be used to assess both the business and individuals within it and it stands for:
- Productivity: the amount of effort being devoted to the business
- Administration: how effectively is the business administered
- Entrepreneurship: what is the level of imagination and innovation?
- Integration: how well are the people engaged and included?
Giving each test a rating from 1-5, in the early start-up days of the business the productivity rating is very high, administration is generally low, ntrepreneurship rating is again high and as there are very few people integration is usually automatic.
As the business grows and takes on more people the PAEI code changes. For example, while P is or should still be high, A will have increased, E may well have reduced and I will probably have improved.
If we asses an individual on the same basis then certain traits will emerge. For example, an accountant typically will have high P, high A, low E and low I. Conversely an owner/manager will have a high P rating, low A, very high E and average I.
That makes for significant differences in approach and using the PAEI code can give a subjective judgement on an individual.
The 9½ assessment is very simple. Look at your top team and give them a rating from 1-10 (10 being high) which covers their total influence in the business.
The aim should be to achieve a 9½ rating for everyone on the top team which says that you have the right people on the bus, all in the right seats and all facing the same way.
If, for example, you rate someone as 8, then it is feasible with mutual co--operation, to develop that individual to a 9 or 9½. If sadly you have a 6 or 7 then it is almost impossible to develop that individual to achieve top rating and some decision needs to be taken.
Yes, this test is very subjective but it does help to shed light on people’s abilities, enthusiasm, alignment, engagement and all the other great traits which go to make up a good top team member.
I saw a great item on the web last week: Conversation - CFO says to the CEO: “If we spend all out time and effort developing people, they might leave” “True” says the CEO “but if we don’t develop them they might stay”
These two tests can give you a clue as to whether you want them to stay and add value to the business.
Download my book "Leading to Success" from the Amazon Kindle store