What are the qualities of effective Performance Agreements?

Well-written, SMART objectives and clearly defined Values are the basis of effective Performance Agreements.

Employee Performance Agreements are working tools used to (1) define and document expectations for performance objectives and Values, (2) guide completion of specific goals in conjunction with set timeframes, (3) provide the ability to measure results of and set clear direction for individual job roles. Refer to, use, and update Performance Agreements ongoing throughout the year to monitor and guide performance.

 Performance Agreements should:

  • Be developed by every manager or supervisor in conjunction with each direct report at the beginning of the calendar year (or of the performance review period) or whenever a new employee joins the work group.
  • Clearly state specific details focusing on both financial and non-financial goals.
  • To keep the organization competitive, contain breakthrough levels of achievement, stretching beyond where individuals are presently performing.
  • Include unconditional accountability for full implementation of the organization’s Values.
  • Focus on achievement and measurable results that are perceived by the employee’s stakeholders (individuals directly affected by the employee’s performance) and the entire organization as value added.
  • Identify expected levels of performance and measures for meeting requirements.
  • Contain weights for performance objectives to help employees prioritize.
  • Include the improvement of processes for which individual employees are accountable.
  • Contain a plan for continuous personal growth and improvement in current job functions.

Performance Agreements should help employees understand that business success and individual success are linked.

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