Good performance

Entrepreneur, June, 1998 by Jacquelyn Lynn

It's easier said than done: building a company based on performance instead of seniority, credentials or contacts. But it's hard work that will pay off in the long run, says Roger Fritz, president of management consulting firm Organization Development Consultants in Naperville, Illinois. "In a performance-based company," he explains, "measurable objectives are negotiated, agreed on, then monitored, and rewards are based on performance."

Fritz has created a quiz to help you determine if your company is performance-based. Answer "yes" or "no" to each of the following questions:

1. Do you have a strategic plan?

2. Do your employees understand the particulars of your plan?

3. Have you defined key job duties for each employee and set performance standards in each of these areas?

4. Have you established connections between performance and salary increases or bonuses?

5. Does your performance appraisal system tie individual performance to key job duties? Does it show employees how their performance is tied to overall company performance?

6. Is the company mission statement placed prominently in business literature and advertising?

7. Do employees have job descriptions that define their responsibilities?

8. Does your performance appraisal system contain goals in each key area for the quarter?

9. At the end of a quarter, do employees submit brief summaries of their performances?

10. Do you keep the summaries until year-end, at which time you meet with individual employees to discuss job performance in detail?

11. Do you hold a group meeting with employees once a month? The topic: "How are we doing on reaching our goals? What changes, if any, need to be made to attain them?"

12. Are salary increases and incentive awards tied to how well individual employees meet their responsibilities?

Total up the number of "no" answers. If you have one to four nos, you have some good intentions but a lot of work to do; five to seven means you have not yet begun to put even basic requirements in place; and eight or more means you are most likely running your company by emphasizing factors other than performance.

If you want a better performing company, work toward being able to answer yes to all 12 questions. "Being performance-based frees you from dependence on any one person," says Fritz. "You'll build an organization that is more than the extended shadow of its founder; it will be stronger than the strongest individual."

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How to handle employees' bad behavior

Employee misconduct takes a variety of forms, including harassment, theft, drug use, threats and violent behavior. When you become aware of actual or suspected employee misconduct, act quickly - but carefully - to resolve the situation, says Michael P. O'Brien, a labor and employment attorney with law firm Jones, Waldo, Holbrook & McDonough in Salt Lake City. "Treat the complaint as valid until it is established otherwise, and treat the accused as innocent until proven guilty," O'Brien advises. "Also, treat the matter confidentially to the greatest extent possible."

The first step is to conduct a thorough investigation. O'Brien recommends the investigation be handled by someone who is removed enough from the situation to be objective. Your attorney can provide any needed legal guidance.

The investigative process should include a review of all relevant documents, such as personnel files, time sheets and performance reviews, and any applicable financial records. You may also want to interview witnesses, victims and others who may have knowledge of the situation and the accused.

If your investigation confirms misconduct, take immediate and appropriate disciplinary action that is consistent with your policies, When the misconduct includes breaking a law, you must decide whether or not to involve law enforcement. In a theft or drug situation, weigh the potential for negative publicity against the potential good (which could include restitution and the fact that the perpetrator may receive rehabilitation). If the case involves threats or physical violence, O'Brien says the police should always be notified; otherwise, you risk being held liable if the behavior is repeated or escalates.