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Tuesday, March 31, 2009

Self-Assessment

The Basic Standard for Enterprise Internal Control mandates that company management set clear goals for themselves (in relation to risk management) and then assess themselves on whether they met these goals. This provides a tremendous opportunity to bring performance management best practices to companies that may not have had exposure to them yet.

The key elements of self-assessment are:

1) That the business and personal goals be clearly defined. SMART (specific, measurable, attainable, realistic and timely) is the most widely-used method for setting and managing objectives today. The idea is that the goals should be based on business needs and be measured and analyzed.

2) The goals should be transparent to others, especially managers. Setting goals in a vacuum does not count. An integral part of self-assessment is sharing your objectives (as well as key metrics, potential challenges, and expected outcomes) with you manager and (if appropriate) others on your team.

3) Collect and analyze business data. This is the hardest part because companies generate so much information that it can be difficult to collect and analyze it (let along make meaningful business decisions!). The data will allow you to make an honest and independent assessment based on the facts.

4) Conduct the self-assessment. This should be based on the original goals and objectives and include as much data as possible.

5) Most companies will follow the self-assessment with a manager assessment, where the manager rates the employee on achievement against the same objectives. The outcome of this process is then a discussion where both sides can review their assessments and discuss the employee’s performance.

6) Some companies also do 360 degree assessments where the employee’s performance is reviewed not just by their manager but also by their peers and other stakeholders. This can yield a more complete picture of actual performance against goals.

While this all seems like a time- and labor-intensive process, there are many ways to automate these steps. Using a system to manage the performance appraisal and self-assessment processes can reduce administrative burdens, give access to more complete performance data, and provide a repository for information throughout the entire year.