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The Elements of NCCIs Performance-Management Success

April 24, 2002
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At NCCI Holdings, Inc., developing an innovative evaluation system has been asignificant factor in reducing turnover, pumping up performance, and improvingcompany revenues. These are the key elements:
  • Evaluate employees semi-annually, instead of once a year. More frequentevaluations are more work for supervisors, but they curb the tendency ofemployees to lose focus during that long time-span between reviews. Atwice-a-year system gives employees an opportunity to demonstrate improvementmore quickly.
  • Split the process into individual and corporate evaluations. A companyhas a need for both day-to-day competence and above-and-beyond creativity thathelps achieve larger goals. Evaluating each type of performance separately is away of ensuring that both are properly valued.
  • Show individuals precisely how they contribute to the organization'ssuccess. Take the scorecard of company-wide goals and figure out what eachdepartment can contribute to achieving them. Then break down the goals evenfurther, into pieces that an individual worker can have an impact upon. When aperson can see how an individual effort -- reducing the turnaround on paperwork,for example -- helps achieve higher profits, she is going to be more motivated toaccomplish it.
  • Link compensation to performance in a clear, tangible way. When employeesknow exactly what they have to accomplish to earn a pay raise or an end-of-yearbonus, they're better able to focus on achieving those goals. Eliminatingsurprises at evaluation-and-pay-raise time helps keep morale on an even keel.
  • Provide coaching to help employees achieve their goals. Evaluations helpemployees see how they're doing, but they still have to figure out how to usethe feedback to improve their performance. Well-trained corporate coaches canhelp them turn insights into specific action.
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