SOLS Publications - Trustee Tips and Trustee 20/20

Library Trustee Development Program
Spring 1993, Issue No. 6

Why conduct CEO performance appraisal?

Early this year, board members of the Services and Communications subcommittee of SOLS included CEO appraisal as a topic for discussion at a recent round of area meetings.

Thirty-four boards sent representatives to the five area meetings. Twenty-three of these boards conduct a regular CEO appraisal, three have an informal process, six have no regular appraisal and two were not aware whether there was a process or not.

Of the twenty-three indicating that a regular process was in place, there were developing a new process and most felt that the process was not as good as it should be.

Trustees attending the meetings felt that regular CEO performance appraisal was an educational process for both Board and CEO, and a regular opportunity to provide feedback and to discuss expectations and standards of performance. Setting goals for the CEO meant that the Board had to plan and establish clear goals and directions for the development of library services in their community.

What is CEO performance appraisal?

CEO preformance appraisal is a review of the accomplishments of the CEO conducted by the Board. An ongoing appraisal process improves performance, sustains excellence and clarifies the respective roles of the CEO and Board. Performance appraisals are used to establish measurable results over a defined period of time, review achievement, provide guidance or coaching opportunities, identify education or resource requirements, and set compensation levels. Performance appraisals are based on goals and objectives that have been mutually established between the Board and CEO.

Board members and chief librarians alike are made more aware through the appraisal process of the benefits of setting annual goals and objectives. Indeed, this is becoming part of the fabric of excellent library service. Indirectly this awareness is rooted in the nature of the relationship between the Board and the CEO. Growing distress about the current economic climate in which libraries must operate and the resultant need for strong collaboration between Board and CEO increase the importance of a clearly defined and understood relationship.

Why conduct CEO appraisal?

Accountability

The Board is accountable to the Municipal Council and ultimately to the community. It employs the CEO to manage the library on its behalf. The major purpose of CEO appraisal is to ensure that the Board's expectations of library service are being met so that the Board can assure Council that effective and efficient library service is being offered.
Appraisal is an effective way for the Board to establish goals and objectives and to direct the CEO to pursue them. These goals and objectives should be set through a regular, collaborative process and modified as needed.

Achievement

The Appraisal should provide a formal opportunity to summarize and monitor the library's progress in reaching its goals. It is a time to assess the achievement of previously set goals and objectives and, as such, is a critical step in the overall planning process. It means that the Board has to plan and establish clear, realistic goals and objectives and provide the resources for the development of library services in the community. Achievement of these goals must be measurable. Given this support from the Board, success or lack of success in meeting the goals is the basis for CEO’s appraisal.
In most circumstances, performance appraisal is used to monitor performance. In extreme cases, performance appraisal may be used as a disciplinary action leading to dismissal. If use of appraisal for this purpose is contemplated, then it is important that appraisal take place on a consistent basis over a period of time. For example, several years of neglect, followed by a hurried, biased appraisal would not provide a substantive basis for dismissal. Regular, fair appraisal will, in most cases, prevent situations from deteriorating to the point where discipline or dismissal needs to be contemplated.

Compensation

Where measurable objectives that are clearly result-oriented can be established, and where meeting these objectives through good performance can be assessed accurately and objectively, then linking compensation to performance may be useful. However, the Board must ensure that the financial resources, staff skills, resources and Board support are all available to the CEO in meeting these objectives if compensation is to be tied to performance.

Feedback

Everyone wants to have feedback, preferably positive, on their performance and to know that they are meeting expectations. A formal appraisal is useful because it:

gives regular feedback and avoids surprises

eliminates confusion about expectations

recognizes and rewards strengths

identifies and aids in correcting weakness

promotes “optimum” performance

Improved Communication

Regular, formal appraisal contributes to open communication between the Board and the CEO. Periodic reviews provide the opportunity to:

assess the success of the library in providing service to the community

mutually re-evaluate the suitability of previous goals and set new ones.

Legal protection

With the growing emphasis on employee rights legislation and the vulnerability of Boards to lawsuits, a formal appraisal on file protects both the Board and the CEO in the event of disputes. The formal appraisal provides a consistent work record over time and helps to avoid contentious situations.
Trustees are vulnerable in the event of any legal dispute brought against the Board. In the case of a serious dispute, Boards are strongly recommended to seek professional legal advice.

Who does the appraisal?

CEO appraisal is the Board’s responsibility because the Board is the employer.

Library Boards should avoid letting the municipality evaluate the CEO simply because the municipality was used as a comparator for pay equity. The responsibility still lies with the Board as employer.

Staff are not usually involved in the CEO appraisal process. Occasionally a specific, mutual decision between Board and CEO may include senior staff in the process; however, both the CEO and the Board can usually determine other indicators of how well the team works together.

In many county situations, where there is a closer relationship between county council, administration and the Board, the actual performance appraisal is done by the Chief Administrative Officer and the Library Board Chairperson. The purpose, principles and methods of CEO appraisal remain the same although the procedure may vary.

How does the process work?

Most boards conducting regular annual performance appraisals of the CEO use a sub-committee (Personnel, Executive, Operations) to carry out the process.

The process generally involves Board members input followed by discussion at the committee level. Full board discussions, if any, should be held in camera. When the board committee has completed the assessment, the chairperson of committee and the CEO meet to discuss the results. The CEO is given time to respond to the appraisal.

How CEO appraisal is accomplished will be the subject of the next Trustee 20/20 module.

Principles of the process

An effective performance appraisal, acceptable to both Board and CEO, is based on these three principles:

Collaboration: Collaboration between the Board and the CEO in the appraisal process is of utmost importance. Both Board and CEO must contribute to and agree on the process. All aspects of the process should be developed by both parties. If a new CEO is hired, the appraisal process should be described during the hiring procedure.
Confidentiality: Appraisal policy should ensure that the process provides for confidentiality of the documents. Specify where copies are to be stored, limit the number of copies and access to them.
Objectivity: There is no completely objective way to judge a library CEO’s success as there might be in judging the performance of the CEO of a manufacturing firm. However, the goals and objectives setting exercise should include adequate discussion of the measures which will indicate that goals and objectives are being met as well as standards of performance. A combination of appraisal tools used with annual goals and objectives helps to achieve objectivity.

Appraisal Tools

CEO job description: The CEO’s job description provides a basic framework of duties and responsibilities over an unspecified period of time. If there is no job description, this should be completed before any appraisal is contemplated.
Clearly-defined goals and objectives reflecting the library’s mission: Annual goals and objectives based on the library’s roles and mission are developed during the yearly planning process. Achievable objectives provide a blueprint for the year’s activities and must be in place for a useful and successful appraisal process. The Board and the CEO work together to develop these.
Board-answered questionnaire: A questionnaire may be used to rate the CEO on executive qualities such as leadership, communication, administration, etc. While these qualities may be rated numerically, an explanation should be provided by specific examples.
If Board members rate the CEO’s executive qualities, the CEO should also have the opportunity to complete the same questionnaire.
Annual workplan: An annual workplan relates agreed-upon goals and objectives to the CEO’s roles and responsibilities as outlined in the job description. The CEO’s performance should be assessed on the basis of achievement or non-achievement of these goals and objectives.
CEO input: This is usually offered in the form of a self evaluation and/or annual report. The CEO also provides an assessment based on these same goals and objectives.
Policies: A clear performance appraisal policy and relevant procedures should be developed jointly by the CEO and the Board. Written policies and procedures ensure continuity of the process over time. Forms used in the appraisal process should be designed to provide an objective record of the process.

Some final thoughts...

Board speaks with one voice

Boards are, in law, single corporate entities, but in reality are composed of several individuals. Each may have different opinions and expectations of the CEO even though the Board, as a body, has set out certain requirements. Unless expectations are very clearly defined, every member of the Board may have a different view of the process, its meaning, and its expected outcome. It is essential that the Board speak with one voice on CEO appraisal.
When Boards use a form asking all members to rate the CEO on executive qualities, there is a danger that mixed messages may result. While all members should have the opportunity to contribute to the process, they should be careful to relate the rating form to the mutually-agreed upon goals and objectives. The board committee charged with the task of CEO performance appraisal will compile the results into one official rating form.

Board has limited opportunity to observe

The Board usually observes the CEO only at board or committee meetings. Some members may not realize the scope of the CEO’s job or may be tempted to judge performance on the basis of popularity instead of on actual performance.
Personality clashes between individual board members and the CEO can be a possible cause of concern. Working together on a comprehensive process with the CEO and backing it up with a clear policy is the best way to avoid such problems.

Board evaluates only the CEO

Library boards are never involved in staff evaluation. It is the CEO’s responsibility to supervise and evaluate staff. The Board’s only responsibility in these evaluations is to ensure that a policy exists to govern the process. Boards which attempt to evaluate staff could find themselves in very touchy situations concerning human rights violations and Freedom of Information requirements.
CEO appraisal is probably more difficult than any other form of evaluation, but the benefits are well worth the time and the effort. The service the library provides, as well as the CEO and the Board, will all benefit from a conscientiously conducted appraisal.