John Deere: The Performance Management Journey
An excerpt from Performance Management: A Critical Lever for Executing Business Strategies, a Corporate University Xchange Research Report.
 Deere & Company’s CEO Robert W. Lane was named to the chief executive position in 2000 and within weeks, he announced that all salaried John Deere employees would participate in a single, global performance management process. Today, the company has nearly 47,000 employees worldwide with nearly 19,000 of them on a single performance management system, said Chip Chesmore, Manager, Organizational Development.
As with many major organization transitions, Chesmore describes the six-year effort of refining the performance management process as a journey. Currently, the process of setting annual performance management goals maps closely to the company’s fiscal year, with employees and managers sitting down to write SMART goals every November. Senior leaders align their SBU objectives with the organization’s objectives and then share them with direct reports. Each level of leadership does the same to share objectives with their teams to facilitate the alignment of individual goals with the objectives of the company.
John Deere, like many organizations, puts significant emphasis on the conversations held between employees and their managers. “Through this process, an employee understands their division’s responsibility and their manager’s share of that responsibility. This enables employees to develop objectives that support the manager and division,” Chesmore said.
Performance discussions are held at mid-year in the April to May timeframe and the final performance review takes place near the end of the fiscal year. John Deere rolled out its new global process through an 8-hour training program for managers that covered how to
- write SMART goals
- provide effective feedback during performance conversations
- create valuable development goals
The performance management process is also an input to the company’s succession planning process. Performance reviews factor into the selection processes for filling the leadership pipeline. Every two years, managers are asked to identify team members whom they expect to be candidates for new leadership roles within a 2- to 3-year period.
Chesmore said John Deere does not force rank employees, nor does it force a rating distribution. Performance is measured against the performance requirements for each individual’s position.
John Deere continues to refine and adapt its processes based on feedback from its participants. Within the last 2 years, John Deere changed its performance rating scale. “We had feedback from employees that our previous scale was de-motivating,” said Chesmore. “We’ve developed a new rating scale with behavioral examples in order to assist managers in differentiating levels of performance.”
The previous scale provided rating options for:
- Far exceeds
- Exceeds
- Fully meets
- Does not fully meet
- Fails to meet
The new scale offers the following choices to managers:
- Outstanding
- Highly successful
- Successful
- Learning (An option used to rate employees in new roles)
- Needs improvement (Defines a situation that requires an employee to get performance back on track.)
- Unsatisfactory
Competency assessments, position responsibilities and stretch goals are included in the employee’s overall rating. Development goals are also established, but those are not part of a final performance rating.
Phyllis Bleymeyer, Manager of Performance Development, said the move to a global performance management process also was linked with a job re-evaluation project to consolidate and standardize job profiles. “During that process, we identified 5 competencies for each job that are automatically populated onto an employee’s performance plan,” she said. “Managers assess each critical competency annually. They are also asked to comment on how an employee’s competency rating ties to their performance and development.”
John Deere uses Softscape software for their performance management process. SAP serves as their Human Resources Information System (HRIS). The SAP environment provides employee self-service for career planning activities including an internal resume. A web application offers managers a special area where they can get tips on career coaching and development suggestions to support their efforts to develop team members.
John Deere’s Chesmore and Bleymeyer believe the mechanics of the global process are fairly well in hand. Their new focus is on helping managers improve their skills for holding performance discussions. “Best practice companies conduct training on performance management every year,” Chesmore said.
John Deere’s participation in performance management reaches the 98% mark annually.
For more information on Performance Management, go to performance.corpu.com.
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