How to Create Motivational and Rewarding Staff EvaluationsBy Stephen Karbaron
Constructive evaluations are a powerful way to build a loyal, motivated team, who deliver the results you want, whilst working on their own initiative, feeling valued and appreciated. Here is how I was able to achieve this when I went to work in Moscow for the leading Optical retailer in Russia.
In 2005 I was offered the opportunity to be part of the senior management team that would take Lensmaster Opticians from 12 stores to 87 stores in 6 years, before selling out to the second largest optical retailer in the World. This was an exciting time to be in Russia, with a fast-growing economy and a business landscape that was changing almost daily. It was also a completely different business culture to the one I'd grown up with in the UK.
At the end of 2008 I was asked to tell my team they would not get their usual annual bonus due to the World economic downturn. I was not thrilled at the prospect of sending my team home for New Year with this news to mull over during their celebrations. I proposed to our board that I could offer a bonus system that could increase their pay, if they increased performance, with the caveat that we reduced their basic pay. We agreed and I was tasked with finding a solution that would meet the boards expectations, while motivating my team in a positive way.
Until then staff had been paid a small bonus on top of their salary, based on the team staying within the parameters set out by the board. I had never found this very motivational, as when targets were not achieved and bonuses not paid, staff often complained the targets were too high, or the workload too much. My offer was that they take a 5% reduction in basic salary, with the chance to earn a bonus of up to 10% each month, this way if they performed well, they would get their usual 5% annual pay increase. In addition, we agreed an annual bonus based on the team meeting monthly performance goals.
Here are 5 tips that turned the situation around, meant my team became more loyal and my board were happy to pay the higher bonuses when targets were reached.
1. Initiate Staff Commitment
Ask your staff to create their own KPIs, based on daily, weekly and monthly work responsibilities and targets.
By doing this you will find out what they really believe are their responsibilities, how aware they are of their full job description and what they believe to be their most important roles. Once they have done this, meet with them and together decide if they have understood their work responsibilities, you may be surprised to see how misunderstandings may be present. If this is the case, discuss your opinion with them and ask them to review their KPIs based on your comments.
Once this is finally agreed it will be the bases of the monthly appraisal.
2. KPI Based Bonus
Ask your staff to rank each KPI on importance and difficulty.
Now that you have agreed the KPIs with each member of staff, they should allocate points to each KPI based on its importance, suggest that this is equally proportioned over daily, weekly and monthly tasks. The total number of points for all KPIs should add up to 100, which will give an easy to use score to calculate the percentage of their monthly bonus to be paid. Again, staff members allocate the percentages, you will usually find they understand the importance of each KPI, but you can always adjust this by agreeing it with them when you review to finalise the figures.
3. Bonus Distribution
This is the key element; at the end of each month you have an evaluation meeting with each member of staff in your team. They come to you with the KPIs that they have agreed, adding their scores, out of the pre-agreed percentage, to each KPI. To my surprise, they always under graded their results and were usually more critical of their performance than I would have been.
4. Review and Revise
Address each KPI individually, comparing their mark with what you would allocate for the same KPI, then discuss why they gave their mark, if different, why you have a different mark and then agree with them what seems a fair mark. In my experience you will usually be giving them higher marks than they gave themselves, which is a great motivational boost. This also allows both of you to evaluate where they could improve and perhaps find a colleague, with different strengths, who can mentor them and perhaps they can mentor too.
5. Improve yourself
Always leave time at the end of the evaluation for your team members to give you feedback, what are you doing well and how can you improve and be a better leader for them? When doing this, be truly clear that you want honest, constructive feedback, in the same way that you give them constructive feedback. This will build trust, whilst giving you tips on how to be the best supportive leader you can be.
Please comment below or send me a PM with your thoughts and ideas how you are keeping staff motivated, especially at this testing time for all of us. Working Internationally in a new country with a completely different business culture was a terrific challenge for me, what's challenging you right now?
Stephen is a serial entrepreneur, world citizen and protagonist for World Peace. Born in the UK, he has also lived and/or worked in England, Russia, Spain, Chile, France, Italy, The Netherlands, Germany, USA and China. His love of people, planet and personal development has taken him to many countries and cultures, now focusing on bringing his experience to companies for a more conscious and sustainable future. Stephen is currently working with businesses who would like to focus on their purpose, embrace all stakeholders and create a corporate culture that attracts and nurtures the best people, through conscious, ethical, service leadership. Contact Stephen at https://www.linkedin.com/in/stephenkarbaron/