Why PE is a priority'

New assessment added to measure value of contribution

Goals and metrics help teams and their members determine how well they're performing. But how can team members determine how well they're doing compared to others doing similar jobs throughout the company?

At Boeing, Performance Evaluation (PE) is the common process for more than 108,000 salaried employees to set individual goals and track their successes and progress every year. In addition, Boeing has developed the Integrated Performance Assessment (IPA), a new common assessment of an employee's performance relative to Boeing peers.

In addition to helping teams and the company meet enterprisewide goals, the PE and IPA processes affect a manager's decisions about employees' salaries. Having regular discussions throughout the year is important, and it's an expectation for every manager and employee. It's more than a "nice thing to do if time permits in our busy schedules." It is a priority.

Aim high

The PE process has two core components: Business Goals and Objectives (BG&Os) and Performance Values. By using the two common metrics in PE and the new IPA, which takes into account contribution relative to peers, employees' performance can be evaluated the same way across Boeing.

"It's better for both the employee's and company's growth if employees set stretch goals (BG&Os) for their jobs and not meet all of them, rather than set easy goals and exceed all of them," said Jody Toquam-Hatten, manager of the PE/Performance Development Partnership processes. "Some people who grew up getting all A's may be uncomfortable with not meeting a particular goal on a more complex or challenging project, but pushing for that higher level is what makes the company and individuals stronger. The PE process helps managers acknowledge stretch goals in evaluating performance."

The second part of PE is the set of 10 Boeing Performance Values. These are skills and behaviors important for everyone at Boeing. Among them are integrity, working together, communication, customer satisfaction and problem solving. In fact, these values would be important on any team, inside or outside Boeing.

The BG&Os and Performance Values measure a person's achievements in his or her specific job and according to the company's expected behavior and values.

The new assessment

Complementing the BG&Os and Performance Values is the new IPA, which represents the value of contributions. It incorporates the PE and the employee's contribution relative to his or her peers.

"The new assessment is designed to provide managers with a common process for producing a single employee performance score at the end of the year," Toquam-Hatten said.

The IPA will guide managers to use three pieces of information in a consistent manner—how well the employee performed according to BG&Os, to Performance Values, and to the combination of both BG&Os and Performance Values compared to his or her peers at Boeing. This single score will be used as one piece of information to make salary decisions in a common manner across the entire enterprise, said Toquam-Hatten.

More details about the IPA are scheduled to appear this month on the Boeing internal Web at http://peopleadmin.whq.boeing. com/people/compensation/pe/peindex.htm

How PE, IPA affect salary decisions

Completing PE and the IPA are essential because they are an integral part of how managers make salary adjustment decisions. The Employee Salary Model (see left) shows how salaried, non-executive employees are paid. As the model illustrates, the IPA and PE fall under the Value of Contribution section.

Employees' IPA results are used as input into the companywide calculations to establish the ranges for salary adjustments for each employee.

Managers will be held accountable for completing PEs and IPAs. Their own evaluations will be affected by their success in completing direct reports' evaluations by year-end.

PE is a "living" year-long process designed to help employees and their managers set goals and objectives, track regular discussions. As the year-end approaches, all salaried employees should be preparing to do PE closeouts. "Participating in PE is fundamental to our shared success," Toquam-Hatten said.