Evaluating the Boss as Well; Just the Job

By Gibbs, David | The Birmingham Post (England), December 19, 1998 | Go to article overview

Evaluating the Boss as Well; Just the Job


Gibbs, David, The Birmingham Post (England)


In a recent survey, almost 42 per cent of companies in the UK said that they have a formal chief executive evaluation programme in place.

The growing use of CE evaluations can be linked to pressure from both within the company and outside it.

Organisations have become far more sophisticated about their performance management systems over the past decade. There has been a dramatic increase, for example, in the use of 360 degree feedback and pay for performance at all levels of the organisation .

It is much more difficult to justify why the company's most important employee, the chief executive, should not also be subject to a formal evaluation.

The growth in shareholder activism and a related increase in attention to effective board governance practices have also encouraged many companies to adopt a more formal evaluation of chief executive performance. This has intensified with the waves of pu blicity surrounding chief executive compensation.

Introducing a careful evaluation process demands considerable effort from both the chief executive and the board. In all of the companies studied, the process has produced benefits that clearly justify the investment.

The top ten positive results include: Clearer strategic objectives, improved communications to the top management team, increased board independence reinforcing the proper power balance between the chief executive and the board, improved pay-for-performa nce decisions, greater focus on the long term and enhanced feedback to the chief executive.

Once the process has been established a company is more likely to continue the evaluations long term; they will have become part of the ongoing corporate culture. …

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