Performance Management via Coaching

Are the managers at your organization doing a good job coaching your MVPs?

Many managers/coaches could use some coaching themselves — especially those at companies that don't have performance measures in place to evaluate and reward employees. Managers at those companies often base evaluations on quick snapshots of what they casually observe during the day. That's how the managers of ABC Electrical Supply, Dallas, (a fictitious name for a real company) supervised their associates before ABC Electrical Supply revised its performance appraisal system to include good coaching.

What is coaching?

Coaching is a collaborative process whereby managers and employees continually set short- and long-term performance goals; listen actively to each other in reviewing results that achieved or exceeded performance expectations; and ask questions, share views, and negotiate solutions upon reviewing results that did not achieve performance expectations.

Why coach?

Coaching, done properly, builds trust between managers and their associates. It provides for continuous learning. And, it helps people to meet their individual performance goals.

How do you coach effectively?

There are three steps to the coaching process:

1. Preparation
2. Discussion
3. Follow-up

Step 1: Preparation

Preparation is the key to coaching success, whether it is on the sports field, or in the electrical-distributorship game. You can't just roll into a coaching session unless both parties have prepared for it.

The coach should write a discussion plan beforehand identifying the things that need to be covered during the coaching session. A coach should keep the discussion plan handy so that during the month, he or she can easily enter an individual's accomplishments, areas of concern and performance goals. A word of caution: formalized monthly coaching does not mean that you save relevant information until the monthly coaching session itself. Coaching is an ongoing process. Informal coaching needs to occur everyday.

The associate should write a discussion plan prior to each coaching session. He or she needs to be equally vested in the coaching session success and needs to put in as much preparation time as the coach.

Step 2: Discussion

Each party should check off the items from his or her discussion plans as they are discussed during the coaching session. Together, they should agree to and list on their coaching report: 1) areas where results achieved/exceeded expectations, 2) areas where results did not achieve expectations, 3) immediate action plans to achieve results in areas where results did not achieve expectations, and 4) additional short- and long-term performance goals.

For short- and long-term performance goals, focus on setting only a few challenging and mutually agreed-upon goals. Good coaches provide their people with the skills and knowledge to be successful during their coaching sessions. They remove all obstacles that prevent their associates from achieving their short- and long-term performance goals.

The coach should close the coaching session by soliciting and addressing any questions, concerns, information on anything related to the company and schedule an agreed-upon next coaching date and time. Once completed, a copy of the coaching report should always be provided to the associate.

Step 3: Follow-up

The coach needs to check on progress weekly, gathering feedback on what's going well and what's not going well. (Pay attention here. This is important.) Good coaches continually reinforce positive performance progress. Good coaches also develop mutually agreed-upon contingency action plans for performance goals not going well.

ABC Electric's Performance Appraisal System

Let's take a closer look at the ABC's revised performance appraisal system. At the core are clear goals for individual employees, their department, the branch and the company. A clear understanding of how an individual's performance goals affect the department, branch and company is also important.

Employee scorecards (Figure 1) like the one for Carl Widget, a counter-person at ABC's Austin branch, state goals for the company, goals specific to his branch and individual performance goals, which are also translated into a reward system.

At the beginning of each year, Widget receives his employee scorecard and his compensation plan, which he and Tommy Tuttle, his manager/coach, sign off on. Widget and Tuttle also meet quarterly for a review to monitor performance goals and to calculate Widget's incentive compensation reward payment. In addition to these quarterly meetings, they meet monthly in a coaching session to evaluate progress on individual performance goals and to talk about critical business information.

Tuttle, like most in electrical distribution, rose from the ranks. He started in the warehouse, moved to the counter, went to inside sales and then outside sales before being appointed branch manager a little over a year ago.

As a manager, Tuttle trained in both performance management and coaching and has learned to utilize a coaching report during the monthly employee coaching sessions. The coaching report in Figure 2 was completed by Tuttle and Widget during their coaching session Jan. 5 at 10 a.m. Notice that they agreed to a follow-up coaching session on Feb. 3 at 10 a.m.

Under ABC's performance management system, coaches and associates are taught to be jointly responsible for performance management.

As a coach, Tommy Tuttle has signed off on and is accountable to do the following:

• Develop and communicate expectations and priorities to associates.
• Accept input from associates regarding these expectations and adjust them appropriately.
• Observe behaviors that enable or inhibit the associate in attaining individual performance goals.
• Be open to input and feedback from associates.
• Coach associates informally and provide timely feedback.
• Coach associates formally on a monthly basis and provide associates actionable feedback.
• Provide a quarterly formal performance goal review with associates to report how well individual's achieved performance goals against their targets and provide associates with incentive compensation pay-outs.
• Help create and sign off on annual branch performance goals, individual performance goals and employee scorecards, as well as associate compensation plans.

Like good coaches, good players also play be the rules. As an associate, Widget has signed off and is accountable to do the following:

• Attain results and exhibit behaviors expected by Tuttle and other management.
• Listen to and seek to understand all feedback.
• Initiate conversations with Tuttle and ask for timely feedback about his performance.
• Be open to both appreciative and constructive feedback from Tuttle.
• Seek resources and developmental tools needed to enhance his individual performance goals.
• Do everything he can to ensure that he achieves his individual performance goals, the branch achieves its department/branch performance goals, and ABC achieves its company performance goals.

Together, Tuttle and Widget have signed off on and are jointly accountable to do the following:

• Meet or exceed all performance expectations.
• Give one another feedback on an ongoing basis.
• Formally meet monthly and equally participate in their coaching sessions.
• Formally meet quarterly and equally participate in individual performance goals against target review.

Immediately after any coaching session, effective coaches ask themselves two questions: “What worked well?” and “What might I have done better?”

To help their coaches do a better job at coaching ABC Electrical Supply, associates are asked to rate their coaches on an annual basis. Surveys are distributed to employees who are asked to honestly rate their coaches. The company also provides a self-addressed stamped envelope for the survey's return so that employees may complete the survey anonymously.

Using a scale of one to five, with one being never, two being seldom, three being sometimes, four being frequently, and five being always, employees are asked to rate their manager on the following statements.

• My coaching sessions are held every month.
• My coaching sessions are long enough.
• My coach sets challenging but achievable performance goals for me to accomplish.
• My coach sets too many performance goals for me to accomplish.
• My coach shares with me his/her thoughts and feelings, not only facts.
• My coach asks for and appreciates my ideas and suggestions.
• My coaching sessions are stimulating and help me do my job better.
• Because of my coach's position, I would be afraid to question his/her decisions.
• Because of my coach's personality, I would be afraid to question his/her decisions.
• My coach is too tolerant of poor performance and poor performers.
• My coach plays favorites when resolving conflicts.
• When my coach delegates work to me, he/she checks and rechecks the smallest details to my frustration and annoyance.
• My coach provides me with the skills and knowledge to be successful.
• My coach is eager to explore my career path at ABC and what I need to do to get there.
• My coach continuously keeps me informed about where ABC is going and keeps me updated on what the other departments and branches are doing.

The survey provides an area for employees to make general comments.

The coach assessment survey is then used with each manager/coach to reinforce the individual coaching strengths and outline coaching skill development needs.

When you get right down to it, coaching is the bulk of a manager's job. Performance management means providing constant, thoughtful feedback and factual data on individual performance.

If the manager/coach and the associates set mutually agreed-upon individual performance goals and formal constructive coaching sessions are used, employees can consistently attain their performance targets.

Distributors that continually focus on performance management will maximize their profitability through our current uncertain economy and beyond.

Tom O'Connor is a consultant on performance management systems for wholesale distributors. He can be reached via phone at (860) 676-7876 or via e-mail at [email protected].

ABC EMPLOYEE SCORECARD

Name: Carl Widget

Date: January 2, 2002

Department/Branch: Austin branch

It is important for me to understand company goals and my department or branch goals because my individual work contributes to the accomplishment of these goals. Therefore, I must clearly understand the expectations and priorities. I also understand that my goals and expectations may change throughout the year, as the goals of the company and my department or branch change in order to meet evolving business needs.

Company Performance Goals:

• Achieve average customer satisfaction index (CSI) of 80 percent
• Achieve total employee satisfaction index (ESI) of 80 percent
• Achieve continuous order fill rate (OFR) of 94.6 percent, order accuracy rate (OAR) of 99.7 percent, and on-time delivery rates (OTDR) of 98.4 percent
• Achieve net income before taxes (NIBT) of 4.2 percent

Department/Branch Performance Goals:

• Achieve average branch CSI of 80 percent
• Achieve total “Knowledge & Skills” ESI of 80 percent
• Achieve continuous branch OFR of 94.6 percent, OAR of 99.7 percent, and OTDR of 98.4 percent
• Achieve branch net income before taxes (NIBT) of 4 percent

Individual Performance Goals:

• Achieve branch Counter Salesperson CSI of 80 percent
• Achieve daily sales-order writer average of 35 orders and 140 lines
• Achieve branch NIBT of 4 percent

ABC ELECTRICAL SUPPLY CO. MONTHLY COACHING REPORT

Name: Carl Widget Date: 1/5/02, 10 a.m.

Coach: Tom Tuttle Next: 2/3/02, 10 a.m.

Individual Performance Goals:

• Achieve branch counter salesperson customer service index (CSI) of 80 percent.
• Achieve daily sales-order writer average of 35 orders and 140 lines.
• Achieve branch net income before taxes (NIBT) of 4 percent

1. Areas where results achieved/exceeded expectations:
   • We hit our Austin branch NIBT goal of 4 percent for January.
   • Customers and associates continue to praise you for being friendly, responsive and thankful.
   • You continue to maintain 80 percent CSIs. Keep up this great effort!
   • Thanks for the extra effort last Saturday with making two deliveries after closing the branch.
   • I continue to observe that you are very attentive to ensuring our counter dump bins, gondolas, wall displays, and end caps are continually full of stock. Thank you.
2. Areas where results did not achieve expectations:
   • January numbers. You averaged 36 orders, but only 122 lines. You are leaving a good portion of your quarterly incentive pay-out on the table by not averaging 140 lines per day. Keep suggesting add-on sales. For example, you're selling boxes and enclosures but not connectors, wiring devices, plates, conduit, conduit fittings, etc., to go along with it. Same with lamps — also sell customers ballasts, lighting fixtures, reflectors, lighting controls, etc. Ask every customer for related products, and you will hit your line goal every month.
   • Last quarter's Customer Satisfaction Report Card results of a low CSI of 65 percent for being “knowledgeable.” This must be improved to 80 percent.
3. Immediate Action Plans To Achieve Results In No. 2
   • Attend Leviton training session on 1/30/02.
   • Review “Guide to Add-On Sales” and be prepared to take a written test on “If your customers orders…ask them if they also need…” on 1/20. Create your own add-on sales checklist to use as counter guide with customers.
   • Observe co-workers' add-on counter sales transactions. Seek advice on add-on sales opportunities.
4. Additional Short- And Long-term Performance Goals
   • Achieve 80 percent CSI ratings for being friendly, responsive, knowledgeable and thankful on third quarter Customer Satisfaction Report Card.
   • Average 35-plus orders and 140-plus lines per day for February.
   • Help branch achieve 4 percent NIBT for February.
   • Organize Customer Counter Breakfast on 1/25 from 6:30 a.m. - 10 a.m.
   • Attend Datacom 2002 Symposium on 2/19.