Q How can the club president do an effective job of reviewing the general manager’s performance? How do you measure success in the GM review?
A General manager reviews are often a difficult process when conducted by board presidents, most of whom are successful executives but do not have a deep understanding of the club business. These volunteers may not be aware of the many job skills, business and political nuances, and situational dynamics the general manager faces in the private club environment.
The GM review requires the club president to evaluate the GM’s performance on behalf of the board and membership and generally then determine a potential pay modification and assign value to a “performance bonus.” These discussions can be challenging and sometimes awkward between both parties, because they are generally rife with strong opinions—which invariably lead to disagreements and conflict.
Performance Management Plan
To effectively review the GM’s performance, the club president should develop a comprehensive performance management plan with the general manager so all parties understand and agree upon performance expectations. The president should encourage and expect the general manager to align the performance expectations with the club’s vision, mission, strategic plan, annual business plan and budget. With this plan in place, the general manager has clear and measurable goals, and the president has a standard against which he can evaluate and monitor the GM’s performance.
It is also important that the review not be considered one meeting, but rather an ongoing process in which the president continuously assesses and gives feedback on how both the club and the general manager are performing. Communication is also critical. Formal and informal progress meetings and discussions should be held with the general manager throughout the year. These should be honest and concise conversations to ensure that both parties are in sync and stay in sync on the direction of the club and club operations. In our experience, presidents may underestimate how much the general manager appreciates and wants this feedback. Also, general managers can and should use this opportunity to communicate their thoughts regarding what is going well and what isn’t, and, if necessary, recommend actions to correct the issues.
This process of providing assessment and encouragement to the GM on behalf of the board is central to building an excellent flow of information and trust and demonstrates support for the GM. General managers want to feel as if they are working in partnership with the board. However, that may not always be the case, and divisions in expectations can often result in distrust between club leadership and management.
Open Communication
The true success of the GM review is measured not only by the GM’s ability to achieve the results agreed upon in the performance management plan, but also by the partnership that is forged between the president and the general manager. A fundamental principle of the review process is that there should be no surprises. Open communication and clear understanding of the expectations can prevent surprises and help address issues immediately. This is also a critical time for the general manager to discuss the struggles the management team faces and their approaches to tackling problems.
The rapport between the general manager and the president is a club’s most vital relationship. It must be well man- aged and requires mutual trust and understanding. A dis- connect between management and board direction is one of the most common reasons behind GM turnover. Planning ongoing evaluation and effective communication can not only help improve the GM’s performance and longevity, but can also fuel a club’s success.
Dan Denehy is the president of DENEHY Club Thinking Partners, an executive search and management-consulting firm that has handled nearly 300 projects for more than 100 private clubs and boutique resorts. He can be reached at [email protected] or learn more at www.denehyctp.com.