Lateral Capital Management, llc

Evaluating Your Employees

Here is a simple way to evaluate the performance of most of your employees. While very general in nature, it hits on all the skill/performance points which Early Stage companies typically need to succeed. More important, if you use the same criteria for all employees, it is possible to compare performance across functions using the Rate and Rank tool shown below.

Individual Capabilities Scorecard – You can use the scorecard below to rate employees across all functional areas. However, it is not aimed at assessing their functional skills. Technical skills – as coders, finance people or marketing staff – are generally pretty easy to evaluate. What you really care about is their ability to deliver great outcomes. Not only do you care ab out today’s productivity, you also want to assess their ability to generate more/better outcomes in the future; whether they can help grow the enterprise as a whole. We have found that lots of people have the technical skill base to do great work – but that the ability to work across functions in an integrated way is by far the harder skill to find.

This “system” will not work for everyone, but it is a very powerful way to approach organizational assessment. Said another way, if an individual has terrific technical skills but scores poorly on this measure of their Individual Capabilities, their value to your company will decline over time. It’s not that they aren’t “good”; it is more that your expectations and needs will grow over time as the company grows.

The Individual Capabilities Scorecard is designed to run on a four-point scale, as described below. By keeping this to only four options, you will prevent your ratings from looking like a bell curve, with half of all your staff in the middle rank and the rest split 20%/80% on both sides! With this scale, you have to make a choice between 2s and 3s: They are either “good where they are” or the have potential to grow into a bigger/different job, but not both:


①  Capability below requirements for the current role.

②  Strong capabilities if focused on specific role.

③  Very strong capability that is highly mobile and transferable to new assignments.

④  Outstanding capability that is one-of-a-kind. Best in Class performer.

Rating and RankingHere’s a way to combine ratings for all employees on one grid, so you can see what your total performance “inventory” looks like. It allows the boss to split out what each employee has actually accomplished (Results Delivered) and compare that to their Individual Capabilities. If an employee is “upward and to the right,” you know the individual is on track to make continuing contributions, but if they are “bottom left,” they may be better off in another line of work.

Source: This material was adapted from a structure P&G used in the 1990s. © 2016 One Page Solutions, LLC. All Rights Reserved