I shouldn’t be giving this away for free, but I hope that readers see the simplicity of this, and stop wasting time, effort and money on this topic, and move on to more complex things that are more worth time, effort and money. Here is the secret to the optimal CEO performance evaluation system:
The job description and a pencil.
There. I just saved you several hours of consulting time, half a dozen fruitless education sessions at conventions/conferences, dozens of calls to your colleagues and a lot of frustration. No 80 question Survey Monkey questionnaires. No tabulations, no averages, no formulas.
Here is the logic: You hire your CEO to run your organization. As a Board, you determine what the responsibilities of the CEO are in running the organization. You set forth the qualifications, and the qualities of the individual hired to be the CEO in the job description. If they are essential to optimal performance of the job, you put them in the job description. What are the priorities of the CEO? Operations? Advocacy? Provider recruitment? If they are priorities, you set them out in the job description. Perhaps annually you give the CEO specific objectives, which, honestly, should be consistent with what is on the job description, because that’s what you hired the CEO to do, right? So what better tool could you possibly have to measure performance.
Now the tricky part. The ratings. For each item on the job description, you give one of three possible ratings: 1, 2 and 3. You rate “1” when the CEO is not completing the item (or possessing the characteristic) the way the Board wants it done. For every “1” explain why, and develop a specific action plan. Rate “2” if the CEO is doing it the way you want it done. Rate “3” if the CEO has demonstrated something so far above what you expect that pretty much anyone would agree. You have to document a “3” with real world examples, not just “because he/she is the greatest!”
Go back and look at the ratings. If there is anything that is less than a “2” then the CEO is not “fully functioning” in the job, and shouldn’t be in the part of your pay range appropriate for the “fully functioning” CEO. Don’t average!!! Being great at one thing doesn’t make up for being deficient in something else… you didn’t hire your CEO to do part of the job.
Okay, in less than 400 words, I’ve solved your CEO performance evaluation dilemma. Feel free to contact me at firstname.lastname@example.org if you’d like to know how to put this in action.