I’m fascinated by performance management systems. I often ask clients: does your performance management system really help everyone meet performance standards?

Most clients say their performance management system is “OK.” Few (less than 5%, in my experience) say their system is “outstanding.” There is a vital need to refine systems to 1) manage performance consistently well and 2) manage MORE than performance.

Don’t Just Manage Performance; Manage Contribution

In their book, Helping People Win At Work, Ken Blanchard and WD-40 CEO Garry Ridge discuss how Garry completely changed WD-40’s performance management system, with outstanding results.

Garry’s commitment to learning prompted him to join the first cohort (2000-2001) of the University of San Diego’s Master of Science in Executive Leadership program, co-sponsored by the Ken Blanchard Companies. Blanchard’s “Partnering for Performance” philosophy is carefully woven through the MSEL program, and it inspired Garry to change WD-40’s performance management philosophy. (Full disclosure: I taught the Situational Leadership® II/DISC Bridge® course with MSEL 2000-2008.)

Among the best practices emphasized in the MSEL program is the benefit of a values-aligned workforce. Garry took all of these best practices and refined them to fit the unique WD-40 culture.

Manage Values AND Performance

WD-40’s year-round contribution management system includes these three phases:

  1. Planning
  2. Execution
  3. Review and Learning

Planning – once a year, tribe leaders (WD-40’s functional groups are tribes, not “just teams”) establish each tribe member’s “final exam.” This “exam” is a formal agreement that maps out expectations in three areas: essential functions, SMART goals, and values.

  • Essential functions describe the responsibilities of tribe members within their unique job position. Every year, tribe members see their current essential functions description and are asked, “Is this still the way you understand your job?” Tribe members know whether their jobs have changed.
  • SMART goals outline performance expectations. A well-defined goal needs to be specific, motivating, attainable, relevant, and trackable. Utilizing SMART goals ensures all tribe members know what they are being asked to do.
  • WD-40’s values describe HOW tribe members and leaders go about accomplishing their goals. Demonstration of company values is carefully monitored throughout the year, and feedback is provided to ensure clarity of other’s perceptions. WD-40 doesn’t just want good performers; it wants good performers who are also good citizens.

Execution – Once expectations for performance and values are clear, tribe members begin delivering on their goals. Day-to-day coaching is the primary tool tribe leaders use to maintain a healthy partnership with each tribe member.

In this phase, leaders use Blanchard’s Situational Leadership® II model to diagnose tribe member’s task-specific development needs and provide only those leader behaviors the tribe member needs for high competence and high commitment on each task.

Review and LearningThis vitally important phase allows for leaders and direct reports to pause regularly, review progress, and look for the “learning moment” that can help move goals forward. Going to hard, “doing” too much without pause, can send tribe members down the wrong path quite easily. Mistakes are seen as learning opportunities; if caught early, they are rarely “typhoons” – what Garry calls destructive events.

Garry wants all WD-40 tribe leaders and members to take time to find the learning in every action. This results in continuous conversations regarding reviewing and learning.

An interesting focus of the WD-40 contribution management process is the foundation of mutual accountability and mutual responsibility. Both parties – team leader and team member – are 1) accountable for agreed-to outcomes delivered in a values-aligned fashion, and are 2) responsible for the outcome.

To what extent does your company have a contribution management system? Join in the conversation in the comments section below.

S. Chris Edmonds

S. Chris Edmonds

Chris helps leaders create purposeful, positive, productive work cultures. He's a speaker, author, and executive consultant. He blogs, podcasts, and video casts. He is the author of The Culture Engine and six other books.
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