In today’s times when a slight change in a company’s strategy can sabotage its image in the market, the performance of a CEO is highly critical in sustaining the company’ success story. The CEO performance evaluation process should be implemented to know how well the company is achieving its mission and to examine its goals.
360 degree performance appraisal, an effective tool to measure leadership and managing styles, is a comprehensive process where CEO receives the feedback from the professionals he interacts with. Self appraisal, superior’s appraisal, subordinate’s appraisal, and peer appraisal are its four components that add to its efficiency. The evaluation criteria could be based on the vision, mission, and goals of the company or leadership roles, characteristics, and skills.
An ongoing assessment system paves the way for an open communication between the board and CEO. One of the efficient ways to build and strengthen a constructive relationship between them, it helps in measuring the past performance of the firm, and planning effectively for the future. The evaluation further ensures the discussions on strategies and expectations to foster growth of the company.
It is the responsibility of the board to implement a fair practice for the performance assessment, and later provide a clear and honest feedback. It is a way to identify the areas where work needs to be done, improving the firm’s position. So, it would not be wrong to say that by assessing CEO’s performance, one measures efficiency of the board as well.
Not all CEOs are open to formal assessment process but they need to understand its relevance in improving their performance and the company’s figures.
[This post has been contributed by Mr. Deepak Kaistha, Manging Partner of Planman HR.]