Annual reviews are designed as a part of an overall performance management process. During the typical annual review, managers are usually assessed in a number of mission-critical competencies. Unfortunately, though well-intentioned, the typical review contains a number of flaws.

First, adequate training in assessment areas is not always forthcoming. In fact, specific competencies are not always adequately identified for managers prior to the review.

Second, in many cases, clear objectives and expectations have not been established for each competency, so the review takes on a highly subjective tone. For example, in the presence of a single instance in which a manager has seeming failed to demonstrate “initiative” (over a 12-month period), a manager may receive only an average score on this required competency – a 3 on a scale of 1 to 5.

Third, at some companies, managers may be assessed (allegedly) on literally dozens of competencies. In one case, I consulted with a company that assessed managers on over thirty management or leadership competencies in which they were expected to do well. However, the review process often devolved into identifying the two or three areas that needed improvement, while little attention was given to areas of strength or excellence. Managers perceived the whole process to be about about finding what was wrong with them rather than truly managing and improving performance.

All of this caused me to think about which competencies are really important in management leadership, i.e., which competencies should a company focus on to improve management performance? The Center for Creative Leadership – a well-respected leadership think tank – recently surveyed 2,200 leaders and asked what they considered to be the most important skills that leaders must develop to be successful in the current business climate. Here are the top 5 competencies they identified:

1. Leading people: directing and motivating people.
2. Strategic planning: translating vision into realistic business strategies, including long-term objectives.
3. Managing change: using effective strategies to facilitate organizational change.
4. Inspiring commitment: recognizing and rewarding employees’ achievements.
5. Resourcefulness: working effectively with top management.

(Hmmm.  It seems that, to be successful in the current business climate, leaders must first and foremost be good at leading people. But, isn’t that what leading is? What else would they lead – the facilities?)

Notwithstanding my sarcastic comment about No. 1 (I’m sure what they have in mind is for leaders to be more effective with people), I think they have it right – with one glaring omission. The single most important skill that any leader must possess is the ability to communicate effectively. Of course, those surveyed would likely say that communication is intrinsically present in each of these competencies, but in my view that is exactly the problem. While organizations consistently claim communication is critically important to success, it is rarely identified as its own competency – as demonstrated in this survey [Note: In many reviews, "verbal communication" and "written communication" are listed as necessary skills, but these generally refer to presentation skills (verbal) and general business correspondence (written)].

The important take-away here, I believe, is that current leaders do believe that working with people is the single biggest competency needed to be successful. If that is an accurate assessment, then managers would be well served to access any training or education available to improve those skills.

Tagged as: Appraisal, core competency, Expectations