Step 4: Grade Individual Performance
Similar to the Organisation, each individual must have their own top 3 Objectives for the year.
These need to be S.M.A.R.T., challenging and realistic, and aligned with Organisational Objectives.
These 3 Objectives are set by their manager, tailored to each individual in the team. It’s very important that the manager also signs off on these at the beginning of the year for alignment and accountability and file it with the Human Capital/Org. Development team.
For example, an individual might have these 3 Objectives:
#1: Improve communications using S.M.A.R.T. (35% weightage)
#2: Improve delegation using RACI (35% weightage)
#3: Attend Scrum certification training and apply it within 90 days effectively (30% weightage)
At the end of the year, the manager has the discretion to adjust the payout for each Objective based on factors like effective communications, core values, culture code, teamwork, leadership, and so on.
Here’s an example of what the payout might look like at the end of the year, after the performance review.
Again presume the allocated bonus is $10,000 per employee:
◦ $5,000 determined by Organisational Objectives
◦ $5,000 determined by Individual Objectives
Based on the manager’s scoring, the individual has achieved these payouts:
|
% Objective Weightage |
$ Objective Weightage |
Manager’s scoring |
$ Payout Unlocked |
Objective #1 |
35% |
$1,750 |
80% |
$1,400 |
Objective #2 |
35% |
$1,750 |
70% |
$1,225 |
Objective #3 |
30% |
$1,500 |
90% |
$1,350 |
Individual Payout unlocked: |
$3,975 |
Example Calculations for Objective #1:
35% x $5,000 = $1,750
80% x $1,750 = $1,400