MANAGING BY OBJECTIVES
Assessment of an employee’s performance against their objectives is typically the most common measure used to define bonuses in banks. Every year, based on the overall company goals, quantitative and qualitative challenges agreed by the board and executives are cascaded down to the various areas and employees. As a result, each employee has a list of objectives or goals with a mix of quantitative and qualitative challenges aligned to the bank’s overall goals.
Objectives must be clear, measurable, achievable, relevant and time-based and must set the employee’s expectations in terms of numbers and the development of soft skills that will help them do their job and with their career progression.
The process of managing by objectives
Sample Objectives
| Objective | Reporting |
| Contact five customers per day, complete a CRM report on the outcome. Total 1,100 customers per year. | Daily measured every quarter. |
| Achieve a 95% customer contact satisfaction rating every quarter. | Quarterly, from customer satisfaction questionnaire. |
| Sell a product for every five customer contacts. Total 20 per month. | Monthly. |
| Show empathy and communications skills by attending training and achieving an 80% pass rate on tests. | Course delivered every quarter. |
| Show leadership skills through mentoring program, reach a satisfactory grade in the program as a minimum. | Commence mentoring programme supervised by HR. |
Each objective will be reviewed by the manager and the employee on the defined date. For example, every quarter the manager will check if the employee has contacted a minimum of 300 customers. If not, they must explain why not and if they continue to deliver below the agreed target, this will affect any bonus or future promotion. The outcome of a review is a set of actions to ensure the agreed target will be achieved. An appraisal will be completed for each target on the agreed date and frequency.
On top of the above technique, there are many others to help the bank assess the employees. Next, we will list the most relevant techniques.
Nine Box Talent Grid
Nine Box Talent Grid is a tool commonly used to plan succession in banks. It helps managers identify which employees are in line for development or promotion by measuring potential against performance. It also helps to identify individuals who are performing poorly and therefore require closer supervision or a development plan.
It is based on the assessment of the employee’s immediate supervisor, supported by other techniques such as profile assessments completed by HR and 360º assessments (discussed later). The actual performance is determined by performance against objectives.
The manager or supervisor assesses the employees into one of the nine boxes, providing a clear view of the talent available and the valuable employees. This placement must be presented to an assessment committee or the executive committee who should challenge each employee’s placement. It is critical for the manager or supervisor to have data that corroborates the decision. The exercise will help decide how to improve productivity, and promotion and career plans.
The manager or supervisor assesses the employees into one of the nine boxes, providing a clear view of the talent available and the valuable employees. This placement must be presented to an assessment committee or the executive committee who should challenge each employee’s placement. It is critical for the manager or supervisor to have data that corroborates the decision. The exercise will help decide how to improve productivity, and promotion and career plans.
360º Appraisal
360º appraisals enable the employee to be evaluated by themselves, as well as their peers, superiors and subordinates
Completed anonymously, the 360º Appraisal can deliver a fair analysis of many aspects of performance and include technical and personal skills needed to perform the job. This helps to define a development plan for everyone and serves as a basis for assessments such as the Nine Box Talent Grid, as HR has access to the results.