By Virgil Carter
Annual performance planning and related annual performance
review of association CEOs is often a mysterious “black box” process for which
little is known and even less is written.
As a result, the planning process and the review process may be very
different in every organization. In
fact, these two processes may often be very different year to year, in the same
organization, unless some education and discipline is applied to make planning
and review positive and helpful year in, year out, regardless of changing
personalities. Here’s five critical
elements which may help performance planning and review to be the constructive
learning experience they should be.
Purpose of CEO
Planning & Review: There are a
variety of reasons for CEO planning and review, which should be reflected in
the annual process, including 1) achieving a clear strategic plan and
supportive annual operational plan; 2) strengthening the CEO as one means of
achieving organizationsl progress; 3) making the processes a professional and constructive
process for all involved; 4) matching the organization’s culture and
characteristics (there’s no “one size fits all” process for CEO planning and
review)
Formalize and
Document the Full Annual Process: This
element should address 1) a written policy that formalizes the purpose,
process, schedule for common understanding and consistent annual commitment of
all parties for a successful process; 2) written annual performance objectives
and metrics prepared by the CEO and approved formally by the governing board;
3) written documentation of the results of each annual process with copies to
the CEO
Recognize and Foster
a Clear, Open Process: In most
non-profits, the only employee of the board is the CEO. Everyone else is an employee of the CEO. Therefore, a
clear, open process is needed to support and aid the CEO in achieving
the mission of the organization. This
should include: 1) the CEO being a full
participant in the planning, execution and assessment of the performance
planning and evaluation process; 2) direct CEO communication opportunities with
the board at every board meeting, keeping communications channels open and
working.
Provide for Lessons
Learned and Annual Improvement: Performance
planning and evaluation are like every other association function: subject to lessons learned and the need for
continual improvement. Thus the process
should: 1) work to build trust, honesty
and mutual respect—teamwork should be stressed; 2) incorporate lessons learned
and improvement into the process annually as mutually agreed.
Compensation
Principles: CEO compensation varies
by type, size and location of the non-profit organization, as well as by the
level of knowledge, experience and duties of the CEO. Annual compensation should consider: 1) reliable association-based compensation
studies for similar organizations and CEO roles; 2) both fixed and variable
compensation, with the variable compensation, in most cases, being
discretionary bonus programs, rather than the higher paying incentive programs
common in industry; 3) CEO and staff annual compensation are not comparable to
the compensation levels of association volunteers in their personal line of
work—CEO and staff compensation are only comparable to their peers in similar
non-profit organizations.
A couple of closing
thoughts: A non-profit CEO is not a
“manager”! The CEO is really a leader,
thus the executive performance and evaluation should reflect the
characteristics of leaders, i.e., vision and initiative, accountabilities,
delegation/monitoring, outcomes, communications and relationships.
A subsequent article will explore various methodologies for
CEO planning and evaluation.
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