Management Assessment: 360-degree Reviews Reveal the Big Picture
The end of the calendar year is a fine time to review your employees’ performance, including that of your managers. Thoughtful assessments of their successes and shortcomings in the past 12 months will help you provide constructive feedback as you head into the New Year.
But wait: You might not want to depend on just your own opinions when reviewing management performance. Consider expanding your “lens” by soliciting feedback from their co-workers and direct reports, outside sources (such as customers and suppliers), and the managers themselves (via self-evaluations). This multifaceted approach is commonly called a “360-degree review.”
Crafting a feedback survey
The first step in this full-circle review process is to create a formal feedback questionnaire for evaluating your managers’ performance. The survey should focus narrowly on the aspects of performance most critical to management success. Typically these include:
- Leadership ability,
- Communication skills,
- Job proficiency,
- Organizational skills, and
- Mentoring and coaching proficiency.
Of course, the specific job skills of managers will differ depending on the dealership area in which they work. For example, in the service area, you could ask subordinates to rate their manager’s ability to enable the team to satisfy customers.
Make sure your 360-degree feedback survey isn’t too long and detailed or else recipients might fail to complete it. Ideally, they should need no longer than 15 to 20 minutes to thoughtfully fill it out. Consider creating separate surveys for insiders (co-workers and subordinates) and outsiders (customers and suppliers) – they’ll likely share different kinds of feedback. And ask open-ended questions instead of providing only a simple checklist.
Ensuring confidentiality is crucial to implementing a successful 360-degree review program. Subordinates, co-workers, vendors and even customers should be able to provide feedback anonymously and be assured that their opinions will remain anonymous. Otherwise, they probably won’t be totally forthright in sharing feedback, which defeats the exercise’s purpose.
Once you’ve received the completed 360-degree surveys and managers’ self-evaluations, use them (along with your own personal observations) as the basis for drafting a formal performance review. Your review should provide managers with detailed feedback on how they’ve done over the past year in the areas most important to their job success – and, ultimately, the success of your dealership.
The full-circle feedback you receive may include some criticism of managers and suggestions for ways they can improve their job performance. Don’t feel as if you need to share this with them verbatim, especially if it’s harsh. Instead, use it to provide constructive criticism and create 2017 goals designed to help managers improve their performance in weak areas.
Linking goals to financials
As you set new annual performance goals for your managers, try to link them directly to your dealership’s financial performance. For example, for new and used vehicle sales managers, you could set goals of combined monthly retail sales per salesperson of 10 units, a used-to-new vehicle sales ratio of 0.7 or higher, and a new vehicle inventory unit days’ supply of 60 days or less.
Other examples: For F&I managers, you could set goals, such as gross F&I income of $850 or more per retail unit. And for Parts and Service managers, you might set goals of a 40% or higher parts department gross profit as a percentage of sales and a 30 to 45 days’ supply of parts inventory on hand.
Your CPA can assist you in forming the ratios that would be most helpful for your dealership.
A better perspective
Gathering in-depth feedback directly from those who interact with your managers every day, as well as the managers themselves, will enable you to review them from multiple perspectives. This, in turn, will give you the insight you need to write more accurate and helpful performance reviews, and structure effective coaching and development programs for your managers for the coming year.
Dealer Insights - November/December 2016