Assessing performance

Once again, it is time to pre­pare for an­nu­al per­form­ance as­sess­ments. Last year, the NIBR IT Seni­or Lead­er­ship team defined and pub­lished stand­ards for in­ter­pret­a­tion of the No­vartis stand­ard 1-3 rat­ing sys­tem with­in NIBR IT. We will use those same defin­i­tions again this year. These are:

A “1” means “per­form­ance im­prove­ment ex­pec­ted”. Many people be­lieve a “1” means “about to be fired” or “in trouble”, but this is not ne­ces­sar­ily true. Sus­tained per­form­ance at a “1” level or a col­lec­tion of res­ults that are be­low ex­pect­a­tions can cer­tainly lead to dis­missal, but a “1” in and of it­self means only that per­form­ance must be im­proved to meet ex­pect­a­tions.

A “3” means “truly ex­cep­tion­al per­form­ance”. It doesn’t mean “great” or “fant­ast­ic” - those are “2”s. Across NIBR IT, we ex­pect to see only a small num­ber of “3”s.

A “2” is com­plex, be­cause it means everything between “1” and “3”. It can mean “ad­equate” or it can mean “very strong”. All team leads in NIBR IT are asked to note, in the text of the as­sess­ment, which of these is in­dic­ated by the “2”. In your dis­cus­sions with your group lead­er, if the mean­ing of the “2” is not clear, you should ask.

I real­ize that these defin­i­tions are still am­bigu­ous and open to in­ter­pret­a­tion. There is no way to change that. How­ever, I hope that these de­scrip­tions bring some clar­ity to the mean­ings of the nu­mer­ic­al as­sess­ments this year.

Some additional commentary, in the form of an FAQ

Q: Why is it ne­ces­sary for us to is­sue these defin­i­tions? After all, the No­vartis per­form­ance as­sess­ment guidelines define the stand­ar­ds fairly clearly.

A: It is be­cause, as with any as­sess­ment mech­an­ism that in­cludes a dis­cre­tion­ary com­pon­ent (as op­posed to be­ing purely based on met­rics) there are gray areas in the defin­i­tions. For ex­ample, what is the dif­fer­en­ti­at­or between a high 2 and a low 3? What sorts of things does a man­ager look for to de­term­ine when a 1 is ap­pro­pri­ate? Which way in gen­er­al do we as an or­gan­iz­a­tion lean? These are not purely nu­mer­ic­al ques­tions - they are cul­tur­al, based on or­gan­iz­a­tion­al norms.

One of the con­tinu­ing goals of NIBR IT is to move “up the curve” – to im­prove our over­all per­form­ance as an or­gan­iz­a­tion. The cul­tur­al norms that we con­tin­ue to es­tab­lish are meant to help with this: to more broadly identi­fy in­di­vidu­al per­form­ance need­ing im­prove­ment, to ad­dress the am­bi­gu­ity with what “meets ex­pect­a­tions” means, and to re­cog­nize those in­di­vidu­als who are truly ex­cep­tion­al in an en­vir­on­ment of very strong per­formers.

These defin­i­tions are in­ten­ded to serve as fur­ther cla­ri­fic­a­tion of the cul­tur­al norm.

The two core mes­sages are these:

  1. Threes are rare: not guar­an­teed, not an ac­know­ledge­ment of ex­pert­ise, im­port­ance, or strong per­form­ance. Don’t ex­pect a three.
  2. Ones are as­signed when per­form­ance im­prove­ment is ex­pec­ted, not just when it is “too late”.

Q: As a group lead­er, I am strug­gling in mak­ing an as­sess­ment. What is your re­com­mend­a­tion?

In or­der:

  1. Think hard about what you would be do­ing if you were in the role of your as­so­ci­ate. What would your ex­pect­a­tions be of your­self? As­sess ac­cord­ingly.
  2. Be hon­est: re­cog­nize in­ef­fect­ive per­form­ance vs in­sur­mount­able chal­lenges; re­cog­nize truly ex­cep­tion­al res­ults, con­sist­ently.
  3. Factor in the as­so­ci­ate’s po­s­i­tion level; ex­pect­a­tions rise with ex­per­i­ence.
  4. If you are con­sid­er­ing a three, take a look at my blog on lead­er­ship. That’s what I’m look­ing for as a basis for “truly ex­cep­tion­al”.
  5. If you are still un­sure, then the lower num­ber of the two is usu­ally ap­pro­pri­ate.

Q: These are pretty tough guidelines. Why?

The No­vartis sys­tem, as defined, really only has two ways to go: very lib­er­al, or very tough.

If you in­ter­pret a “3” as “great”, which seems to be fairly widely done, then nearly every­one prob­ably de­serves a three, par­tic­u­larly if you hire well. In­fla­tion in “3s” means that there is min­im­al space for dif­fer­en­ti­ation, in­tern­al con­fu­sion about what truly is ex­cep­tion­al, and, in a worst case, re­in­force­ment of me­diocrity. It also leads to in­fla­tion in “2s” from the bot­tom end, thus “1s” are as­signed only when someone is in very deep trouble. This is clearly not how the sys­tem was in­ten­ded to be used. Even­tu­ally this us­age causes prob­lems all over the place.

Al­tern­at­ively, one could in­ter­pret the sys­tem ac­cord­ing to ex­act defin­i­tions. Ac­cord­ing to the HR guidelines, a three is defined as “ex­ceeds ex­pect­a­tions”. I don’t know how any­one can ex­ceed ex­pect­a­tions. I have nev­er seen this ac­com­plished. I ex­pect my kids to get straight As. I ex­pect Obama to turn the US around in 4 years. I ex­pect IT in No­vartis to be a hell of a lot bet­ter than it is. We aren’t there.

So, un­der the stand­ard defin­i­tions as in­ter­preted by me, nobody would get a three. This is why, once again, I will be self-rat­ing at no high­er than a 2, as I most cer­tainly have not ex­ceeded my own ex­pect­a­tions. But this strict defin­i­tion is also clearly not how the sys­tem was in­ten­ded to be used.

Hence the defin­i­tions.