Case Study 4: Re-evaluating Employee Evaluation
Working in a team environment is something Tom Bannon enjoys immensely. In 2004, he got an opportunity to work on a team project for Churchill Downs Incorporated (CDI) that was very challenging and rewarding.

Tom was chosen as Hoosier Park's representative for the Performance Management Task Force. Its task was to analyze all aspects of the company's performance evaluation system and to make recommended changes during a presentation to the corporate Leadership Team. The task force was given five months to complete its mission.

"Our team was diverse in talents and I learned a great deal from each of them," said Bannon. "We all seemed to relish the enormous challenge and worked quite well together, even though many of us had never met prior to the task force being organized."

The team began its task by evaluating the system currently in place within the company. It was quickly apparent that there was tremendous difference between each racetrack on how and when performance evaluation occurred, and how and if those evaluations impacted employee pay.

The task force then divided into two groups for its initial work. One group developed a questionnaire to get feedback on a variety of performance management issues from employees throughout the corporation. The members of this group also interviewed each track president and each track's human resources department. The other group identified companies around the country that we wanted to meet with to learn best practices. Depending on location, some of those meetings took place over the phone.

"Once we had the feedback from the different racetracks and companies we spoke with, we were able to get an idea of what we wanted to do," said Bannon. "We would match areas within our company that had been identified as needing improvement with a best practice that we had learned. This served as our foundation as we moved forward."

The group spent the next five months building upon that foundation. Layer by layer they put together a process that they hoped would serve as an effective performance evaluation system for the company.

"We wanted to create a plan that would enhance the company and its employees," said Bannon. "From the company's standpoint, the plan needed to focus on the core competencies every employee needed to excel in for the company to succeed. Also, the company needed to have a system in place that allowed it to reward its highest performing employees and mentor its employees who were not performing at the desired level. From an employee's perspective, the plan needed to be fair and consistent throughout the whole corporation, and be an effective tool for getting feedback and continuous improvement. Finally, for any of this to work it had to be easy to understand and use."

The team held weekly conference calls and met in person at least once a month. In all, the team met for over 200 hours. This didn't include the significant amount of personal time each team member worked on the project or the work of subcommittees formed by the team. Tom served as the team's secretary and took copious notes that the team referred back to over the course of the project.

"The whole plan was so intricately woven. One part of the plan led to another, which enabled us to build a cohesive structure," said Bannon. "But this also created challenges. The group might spend all day working through the fifth part of the plan and finally come to a consensus on what to do. But then we'd realize that our ideas for the fifth part of the plan were in conflict with our approach to the second part of the plan. But if we changed our approach to the second part of the plan, then the third and fourth parts of the plan would be impacted too. Sometimes it felt like we were going in circles."

Ultimately though, the team worked through all of the issues and developed a comprehensive approach to performance management. The team's plan included, among other things, core competencies the company should adopt for all of its employees, a process for cascading goals, a time line for year-round evaluation, an approach to employee calibration, and a recommendation to move the entire system from paper-based to computer-based.

The team divided up responsibility for writing the business plan with Tom acting as editor of the plan. Each section was sent to him to be proofread for grammar and style. He also gave the document a singular style so it seemed like one continuous document instead of six smaller documents placed in the same binder. Tom then helped orchestrate the presentation to the leadership committee.

"Every single person on the team contributed in an important way," said Bannon. "We crafted an excellent plan and had a well-written presentation. But we still had to present to the Leadership Team and that was going to be a lot of pressure. Everyone had a role, even though some were not used to public speaking. It went very well and I was really proud. Succeeding as part of a team is hard to beat."

The Leadership Team liked the plan and presentation and accepted the proposal with limited changes. The task force then helped each racetrack prepare for the change through a series of employee meetings and communications and the plan went into effect the following year.

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