How to Evaluate Employees
One of the most difficult things to do as a manager is to properly evaluate employees. The difficulty stems from many factors including one of the most fundamental – what aspects should you evaluate? We believe there are three fundamental aspects upon which you should evaluate all employees. These are performance, behavior, and potential. As shown in the AKF Employee Evaluation Cube below each of these factors are independent and in total make up the overall rating of the individual. Individuals who excel in all three are truly superior employees. Let’s first consider why we choose these three aspects and then we can discuss ratings in each quadrant.
Performance – employees in every role must achieve their goals. Assigning these goals to employees should be done via the AKF Goal Tree as discussed in Chapter 5 of The Art of Scalability. One strategy for evaluating individuals against their goals is to have them first rate themselves (0-10) on achieving their goals and then the manager should rate them using the same scale. By doing this you allow the employee to spend time thinking about their own performance prior to hearing their manager’s rating. This is also a great starting point for a conversation about where the two ratings are discrepant. Should you start by presenting the manager’s rating the employee might not be prepared for the conversation.
Behavior – this is the most important aspect to evaluate. Employees who perform really well but don’t behave in a manner that is in line with the corporate culture must be let go. You cannot have employees who don’t have the same beliefs, morals, and culture as the company does. We often see employees who are great performer but don’t fit within the company described as ‘brilliant jerks’. These individuals might be great for a three person startup but they will destroy the morale and productivity of larger teams.
Potential – as a matter of course you should periodically evaluate the potential of employees to take on more responsibility. Individuals who are superior performers usually have greater potential and will be interested in bigger challenges.
We often use the terminology that we picked up from GE for rating employees – A, B, and C players. An A player is someone who meets or exceeds expectations on all aspects – performance, behavior, and potential. You can also make an argument that A players can be superior on performance and behavior but limited on potential…not all our A players need to be promotable.
B players are employees who are under performing but demonstrating great behaviors. With some coaching these employees are expected to be A players. This might be a new employee, junior employee, or someone in a new role. While they are demonstrating behaviors in line with the company they need more time or help with meeting their goals.
C players are ones who are either demonstrating bad behaviors (regardless of performance) or who despite coaching have not been able to meet their performance goals. If an employee isn’t a great cultural, behavioral, or moral fit they must go.