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Performance Buy-In: Creating a Performance Based Review and Pay for Performance Compensation Plan

HIRING THE RIGHT individuals for our clubs has always been a challenge. Not only do we need to hire qualified individuals capable of “doing the job,” we must also find the individuals with the right “fit” for our club and the specific operations in which they will serve.

One basic distinction between clubs and other hospitality operations is the finite and select group of individuals that are our members—not the public at large. Our members have committed to join our clubs and be a part of our culture, our “family of families” if you will, which is most often accompanied by a significant financial commitment. To that end, our members’ expectations for the services and experiences we deliver are, rightly so, higher.

Hiring staff to perform at a higher level has always been a challenge, and that challenge is increasing daily. In Houston we have seen a trend in the current marketplace when hiring, or attempting to hire, new staff. Given the current near historic low unemployment rates, we are experiencing “ghosting” by job applicants and sometimes even by those we hire. “Ghosting,” as used in the context
of this article, is when job candidates simply just don’t show up—for confirmed job interviews, second interviews, prescreening appointments and sometimes even their first day of work. With more and more frequency, candidates who accept competitive employment offers may only work a few days before seeming to vanish from the earth, not returning phone calls, emails or text messages. We are concluding that with an abundance
of job opportunities, some employees are regularly accepting jobs when offered,

only to continue to search for and pursue other employment prospects. As we are unlikely to change this phenomenon, our leadership team consisting of each department head at River Oaks Country Club in Houston determined that our additional efforts should be to focus on retaining and rewarding the quality performers already on our team. To do this, we recently implemented an improved employee evaluation process focused

on measuring performance against a
set of attributes and values we felt were universal across all positions at the club. For those employees not executing at optimum levels, we implemented clearly defined, manageable and actionable performance improvement plans (PIPs).

Improving Performance Based Reviews
In the development of a new Annual Performance Review (APR), our ultimate goal was to ensure that our staff members have a clear understanding of their performance expectations and how they are evaluated when compared to their peers. We believe our staff desires to do the best that they can for our members and guests and for their fellow employees. Based on our assessment of seasoned staff members at the club, we also determined that retention rates improve dramatically once an employee has been with the club for two years.

With a focus on retention and longterm performance, we implemented the new APR process. Each employee is rated on “What” they do and “How” they do it. The “What” categories (functional and technical abilities) include: member service, communication, knowledge of job,

attendance and punctuality, professionalism and adherence to club policies.

The “How” categories (behavior and attitude) include: action orientation, approachability, composure and patience, member focus, compassion, understanding others and listening, values, integrity and trust. For those staff members who supervise and direct others, additional “Hows” include motivating others, hiring and staffing, and managing vision and purpose.

Each individual receives a separate rating in the “What” and the “How” categories: Exceeds expectations, meets expectations, does not meet expectations or unsatisfactory. After all evaluations
are complete, the entire employee team
is charted to determine how the team rated overall. In our most recent effort, we produced a fairly typical bell curve
on ratings with 11 percent of employees receiving “exceeds/exceeds,” 61 percent of employees receiving “meets/meets” and

2 percent of employees receiving “does not meet/does not meet” and, of course, a percentage of staff that had a combination of these ratings (i.e., meets/exceeds, does not meet/meets). The final curve for all staff members evaluated was 30/61/8 percent compared to a “normal” curve of 20/70/10 percent.

We convert those ratings into our pay for performance plan, rewarding our best performers with above average increases. For staff whose ratings are subpar, we develop a PIP.

After the assessment is completed, our managers meet with each rated employee to review the outcome and ensure they fully comprehend their performance rating. Then each department manager allocates the financial resources they have been allotted for the upcoming budget year to their team based on individual performance ratings. The response from our team this year has been very encouraging. Each individual has a clearer understanding of their job performance, the expectations from the membership and their department, and how their performance directly impacts member experiences and their individual compensation at the club.

We have found that with a demonstrated and clear connection of staff performance directly tied to compensation, staff retention increases, and overall performance significantly improves. The result is greater stability within the staff, reducing our need for external hires. This process also creates a clear rubric

of attributes for our existing team to use when recommending qualified candidates for job openings. Decades of experience in the club industry has only reinforced to me that our team members want to do a great job for our members and providing them the necessary performance management tools and feedback is critical to their success. We are more than hopeful that our retention efforts through this program, as well as other tangible, valuable employee benefits, will make “ghosting” by job candidates, a thing of the past.

J. Bendy, Jr., CCM, CCE, is chief operating officer at River Oaks Country Club in Houston. He also is an NCA director and co-chairs the Membership Committee. He can be reached at 713-529-4321 or [email protected].

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