Friday, March 14, 2014

Small companies are not big companies - on performance reviews

I have adopted a personal crusade to remind many wide-eyed startup proponents that things are a little different in the Fortune 500 world.

But I have to remind myself that the reverse of this is also true.

I was reading a print publication that summarized this study and noticed something in one of the tables (reproduced in slide 16 of the online presentation). Only 70% of the surveyed firms perform employee performance reviews.

I've gotten so used to performance reviews that they're almost a subconscious activity now, like breathing. Despite changes in corporate structure, and changes in the performance review itself, I've probably been reviewed on an annual basis for two decades now. So to me, the idea of NOT having a performance review is foreign.

But then I began thinking...

Brad's manager told him that he had to attend an important meeting on Friday. This was confusing to Brad, because the QwikShop Zippy Store was not the place to have important meetings. He entered the store, caught his manager's eye, and joined him in the small closet at the back of the store.

"Now, Brad," the manager, "I realize that you've only been here three weeks, but this is the time for performance reviews, and you need to participate also."

Brad was only seventeen years old, so he didn't know what his manager was talking about. "Performance reviews? What's that?"

"Oh, that comes down from corporate."

"You mean Manny?" Manny was the 74 year old man who, with his wife, owned the QwikShop Zippy Store and the adjacent gas station.

"Yeah, Manny. He got a hold of some business book and decided that the QwikShop Zippy Store needed to be professional."

Brad still looked a little confused, but his manager continued.

"Now, Brad," said the manager, "I've evaluated your performance based upon our corporate mission statement. If you leafed through the papers that you were given on your hire date, you remember that the corporate mission statement of the QwikShop Zippy Store is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The company's primary financial goals are to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value."

"What does that have to do with the QwikShop Zippy Store?" asked Brad.

"I don't know. Manny took the mission statement from Disney. He figured that if it's good enough for Walt Disney, it's good enough for him."

The manager paused for a moment. "So, Brad," he asked, "how have you driven long-term shareholder value?"

Brad mumbled incoherently.

"Let me help you with this," offered the manager. "When you walked here this morning, I saw you picking up a cigarette butt in the parking lot and throwing it away. That contributed to the intangible valuation of the firm, didn't it?"

Brad began to wonder if community college were such a good idea after all. If this was what they taught you in community college, it wasn't worth it.
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