Quick Primer on IBM

Performance Management
System
Basics
• At IBM, our success is deeply rooted in the strength of individuals, so leading, inspiring and evaluating performance is a
critical business leadership imperative.
• The Performance Management process is designed to evaluate our employees to produce an equitable and consistent
understanding of individual contributions, across the full spectrum of performance – from the strongest to the weakest.
• Ratings are a point-in-time snapshot of an individual’s relative contribution; it is up to us at all levels to take additional
steps to inspire top performers, motivate solid performers and help improve lower performers throughout the year.  
• All employees set business goals for the year, receive performance feedback and are evaluated.
• The goals, set at the beginning of each year, align directly with IBM overall business goals and values. Managers and
employees will check in and discuss performance progress throughout the year. Mid-year is a good time for an interim
review of results in 1H and desired outcomes in 2H.
• At the end of the year, managers evaluate contributions and give a review rating reflecting your performance. This rating
influences your career opportunities, learning opportunities, potential pay increase and potential bonus/stock options.
• There are three steps in the performance management process.
• Step 1: Set your goals
• Step 2: Document your results
• Step 3: Your assessment
What should you avoid when establishing performance
criteria and assessing business results?

•Don't get overly complex. There is no need to identify dozens of criteria for assessment. Focus on the priorities for your business
and stick with those.
•Don't reduce assessment to a formula. It is very tempting to come up with a spreadsheet that will calculate the relative
contribution of employees. While it may be helpful to have some method to start the discussion of relative contribution, leave
room for discussion and judgment about the true contributions of each employee.
•Don't get distracted from a focus on results. Even well-intentioned managers can get off track if they consider only areas like
attendance, communication, and the ability to work independently, but neglect identifying "what did this person actually
contribute this year?"
•Don't weight all criteria equally since all criteria are not necessarily of equal importance.
•Don't use criteria that do not have a direct impact on business results.
•Don't include criteria that are related to achievement of development goals, which is often out of an employee’s control. Instead,
focus on criteria that are related to results achieved. For example, don't assess based on whether or not a negotiations class was
taken, but rather assess based on how successful the employee was at negotiating deals.
•Don’t change your criteria from year to year, unless the mission of your department or organization has changed significantly or
the criteria you identified the last time were not effective for assessing relative contribution. Clarity and consistency of
expectation for employees is important.
•Don’t wait to define and communicate to employees. Ensure your employees understand the criteria against which their relative
contributions will be assessed and ensure they see the linkages between those criteria and the business goals you have agreed to
in their Review forms