Performance Management Rating Scale

Boards must ensure that systematic and objective performance measurement

processes are in place. Performance management:
• Creates clear expectations for both parties
• Rewards exceptional performance
• Addresses inadequate performance
• Identifies gaps and areas for development training.

The most important purpose or goal of the appraisal of the CEO is to improve both
the performance of the CEO and the performance of the organisation.

The first step on appointing a CEO is to establish the Baseline Requirements,

• Employment Agreement,
• Position Description, and
• Performance Agreement.

The performance appraisal can be an event, say, each six months or an ongoing
process. If issues arise it is important to discuss performance at that time rather than
wait until a pre-set date for appraisal.

The appraisal identifies gaps for development as well as an opportunity to assess

current performance. It is important to not only to give subjective comments but also
objective comments based on measurable targets. The feedback provides
reinforcement for positive current behaviour but also gives a clear direction for
expectations for the future.

The assessment might determine whether or not the CEO receives a bonus or
affects the level of remuneration.

Appraising a colleague is not easy. People often lack the skills to give constructive
feedback or the confidence to receive negative comments. Some people are
uncomfortable with any sign of conflict. While the appraisal session is recognised as
important, often it is not considered urgent and other priorities cause the appraisal
session to be postponed.

It is always a balance to choose how much to measure. Priorities must be defined.

The appraisal can be done by a subcommittee of the Board or the Chairman with one
other board member. Sometimes boards choose to involve a third party.

At the conclusion of the appraisal session the CEO and Chair agree a development
plan and identify any training requirements. The criteria for assessing performance is
updated to reflect new strategic directions and any barriers to improving future
performance are assessed.

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 RATING SCALE
During the assessment process it is useful to have a clear rating scale, for
example:

Outstanding 9 - 10 Substantially exceeded demands of the KPIs and the

role in general.

Demonstrated hi levels of pro-activity, insight and

creativity to identify and solve issues

Acted as a role model for the Trust Board and for

others within the business

Above Target 7 -8 Exceeded the demands of the role with minimum

supervision or assistance

Showed high levels of initiative and problem solving.

Demonstrated thorough knowledge and ability to
achieve the role requirements

Provided strong leadership to others

On Target 5-6 Met the key objectives of the role

Demonstrated strong ability to deliver to targets and

took a proactive approach to problem solving

Worked well with others to achieve targets

Below Target < 5 Either met objectives with detailed supervision or failed
to meet objectives

Demonstrated a limited level of knowledge and problem

solving skills to meet objectives independently

Either demonstrated poor skills in working with others

to achieve goals or hit own targets at the expense of
others’.

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Some indicators are clearly measurable by comparing statistics over time; others are
more related to behaviour and will require more subjective forms of measurement.
Where possible for satisfaction of customers or key stakeholders a survey is
appropriate. Outputs are more easily measured as they tend to be tangible results;
outcomes are about the impact of the outputs and not so easy to measure in the
short term

Measurable Key Performance indicators will depend on the stage of development of

the organisation, the type of business, but some examples for inclusion are:

• Comparisons of financial results to budget

• Timely and accurate data on key outputs, segmented by activity and
geography, e.g. product sales in the northern region, number of serviced
customers
• Customer complaints – need to have system to record incoming complaints
• Compliance with legislation e.g how many OSH claims, personal grievances
• Staff turnover
• Staff morale
• Quality of services – this might require a customer survey to monitor quality
• Relationships with stakeholders – could be beneficiaries or shareholders,
measured by outputs like newsletters and outcomes like change of attitude.
• Installation of new computer system – based on project budget and time lines
• Opening of new branch office – within budget and time lines
• Completion of office manual for staff
• Hosting an annual conference for all stakeholders
• Implementation of a new communication strategy

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