By Al Weber, President, Tweed-Weber, Inc.
How does Pete, a not-for-profit Chief Executive, get a raise when his board chair won’t appraise his performance?
This is the real story of Pete (not his real name, but he really exists). Pete was the Chief Executive of a highly successful, not-for-profit human services firm (he recently retired as he had planned). During his 12 years as CEO, his organization more than quadrupled its annual revenue and the people it served. It consistently generated a surplus. Its endowment increased five-fold. As if this financial success were not enough, during his leadership, his organization became recognized as a clear leader in its field in all of the areas in which it operated.
So, what’s the problem you might ask? Very simply, his board chair (we’ll call him Bob) would not give him a performance review. No matter how many times Pete asked, Bob would not take the time to evaluate Pete’s performance. I approached Bob as a “friend of the organization” and asked him why he wouldn’t let Pete know, in even a semi-formal way, how he was performing. Bob answered, “Heck, I don’t even appraise my own employees’ performance. I wouldn’t know where to start.” At the end of the day, since there were no performance reviews, there were no pay increases for Pete.
Every year, Pete would award raises to his truly superior executive team as part of his annual budget. Every year, the board would unanimously approve that budget. But for all those years, there was never a raise for Pete. He operated under the principle that he could not give himself a raise, only his board could do that. However, after many years without a raise, Pete finally reached his breaking point and included a raise in the budget for himself. That’s when the noise began.
Being the ultra-high integrity guy that he was, he didn’t try to sneak it by his board. As part of his budget presentation that year, he announced a recommendation that he receive the same percentage increase he gave his direct reports. When he did that, you would have thought he announced he was going to raid the entire endowment and move to the south of France to live a life of luxury. Many board members questioned his right to give himself a raise, while several board members whispered that he was “greedy.” One even suggested, in out-of-the-board-room phone calls, that he be removed from his job. When the dust cleared, he was given the raise he asked for, and certainly deserved, but the entire experience had ranged from unpleasant to downright nasty.
What could Pete have done differently? Simply put, he could have taken the lead on his own performance review. The real issue to Pete’s conundrum was found in Bob’s answer to my question about why he wasn’t giving Pete his review. He didn’t know where to start.
Bob is not alone in this area. Many board chairs do not have experience in giving performance reviews. With 1,080,130 charitable and religious tax-exempt organizations in the U.S., and 82.3 percent of them operating on budgets of less than $1 million, it shouldn’t be a surprise that Bob’s experience in this area is not uncommon.
To complicate matters only slightly, some board chairs that do appraise the performance of their Chief Executive don’t always do a very good job of it. I have seen and heard of CEO performance evaluations that were poorly constructed and awkwardly delivered. In smaller not-for-profits, it’s not uncommon for these CEO evaluations to include only the assessment of the board chair or an Executive Committee. Many, if not most, CEO performance evaluations don’t contain the thinking and opinions of the entire board. To say the least, this provides limited, if not flawed, feedback to the Chief Executive. Under any circumstance, it’s certainly not a governance best practice.
If you’re a not-for-profit Chief Executive and you are not receiving the quality CEO performance evaluation that you believe you need/deserve to merit a pay increase and improve your performance in the future, click here and learn more about the process we have developed that will instantly solve that problem for you. It’s a turnkey solution that’s easy and inexpensive to implement. Who knows, when it’s over, it just might help you avoid, or put an end to, Pete’s conundrum.
If you would like to know how effective your current customer survey process is, or if you’d like to be proactive in starting a new customer survey initiative, give us a call. We can help you Know More, so you can Do More. Call us toll-free at 1-800-999-6615, email us at mail@tweedweber.com and/or visit us on the web at www.tweedweber.com. Also, be sure to follow us on LinkedIn (Tweed-Weber, Inc.) and Twitter (@TweedWeber).
So, what’s the problem you might ask? Very simply, his board chair (we’ll call him Bob) would not give him a performance review. No matter how many times Pete asked, Bob would not take the time to evaluate Pete’s performance. I approached Bob as a “friend of the organization” and asked him why he wouldn’t let Pete know, in even a semi-formal way, how he was performing. Bob answered, “Heck, I don’t even appraise my own employees’ performance. I wouldn’t know where to start.” At the end of the day, since there were no performance reviews, there were no pay increases for Pete.
Every year, Pete would award raises to his truly superior executive team as part of his annual budget. Every year, the board would unanimously approve that budget. But for all those years, there was never a raise for Pete. He operated under the principle that he could not give himself a raise, only his board could do that. However, after many years without a raise, Pete finally reached his breaking point and included a raise in the budget for himself. That’s when the noise began.
Being the ultra-high integrity guy that he was, he didn’t try to sneak it by his board. As part of his budget presentation that year, he announced a recommendation that he receive the same percentage increase he gave his direct reports. When he did that, you would have thought he announced he was going to raid the entire endowment and move to the south of France to live a life of luxury. Many board members questioned his right to give himself a raise, while several board members whispered that he was “greedy.” One even suggested, in out-of-the-board-room phone calls, that he be removed from his job. When the dust cleared, he was given the raise he asked for, and certainly deserved, but the entire experience had ranged from unpleasant to downright nasty.
What could Pete have done differently? Simply put, he could have taken the lead on his own performance review. The real issue to Pete’s conundrum was found in Bob’s answer to my question about why he wasn’t giving Pete his review. He didn’t know where to start.
Bob is not alone in this area. Many board chairs do not have experience in giving performance reviews. With 1,080,130 charitable and religious tax-exempt organizations in the U.S., and 82.3 percent of them operating on budgets of less than $1 million, it shouldn’t be a surprise that Bob’s experience in this area is not uncommon.
To complicate matters only slightly, some board chairs that do appraise the performance of their Chief Executive don’t always do a very good job of it. I have seen and heard of CEO performance evaluations that were poorly constructed and awkwardly delivered. In smaller not-for-profits, it’s not uncommon for these CEO evaluations to include only the assessment of the board chair or an Executive Committee. Many, if not most, CEO performance evaluations don’t contain the thinking and opinions of the entire board. To say the least, this provides limited, if not flawed, feedback to the Chief Executive. Under any circumstance, it’s certainly not a governance best practice.
If you’re a not-for-profit Chief Executive and you are not receiving the quality CEO performance evaluation that you believe you need/deserve to merit a pay increase and improve your performance in the future, click here and learn more about the process we have developed that will instantly solve that problem for you. It’s a turnkey solution that’s easy and inexpensive to implement. Who knows, when it’s over, it just might help you avoid, or put an end to, Pete’s conundrum.
If you would like to know how effective your current customer survey process is, or if you’d like to be proactive in starting a new customer survey initiative, give us a call. We can help you Know More, so you can Do More. Call us toll-free at 1-800-999-6615, email us at mail@tweedweber.com and/or visit us on the web at www.tweedweber.com. Also, be sure to follow us on LinkedIn (Tweed-Weber, Inc.) and Twitter (@TweedWeber).
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