my Siebel with a substantial improvement in employee satisfaction. Here’s how the process worked. The week after the end of each quarter, the executive committee the top 15 senior managers spent three days (Thursday, Friday, and Saturday) in a retreat analyzing the results of the prior quarter and establishing objectives for the upcoming months. Corporate quarterly objectives were discussed and agreed to during the meeting. Then, by the seventh calendar day of the month following the off-site meeting, Tom Siebel’s personal objectives and those of his direct reports were posted on the performance management module of my Siebel. By the 15th, these objectives had been translated into objectives for the functions and business units that reported to the VPs and posted on my Siebel. By the 21st of the month, every employee had posted and
received feedback on their individual quarterly objectives. The objectives served as the key metrics that would be used to evaluate their performance over the next three months. Through my Siebel, all employees could view the objectives of any other employee, including those of Tom Siebel himself and other members of the executive committee. This allowed people to understand how others were allocating their time and attention. Based on Siebel’s core values, customer satisfaction was a shared objective for everyone. There was also a clear understating among all employees that if some activity was not related to your list of objectives, you should not be doing it. Employees all the way up to executives were encouraged to be clear about what you would NOT be doing. The individual performance evaluation process ran parallel to the objective-setting process. Each manager was responsible for evaluating his or her direct subordinates by the 15th of the first month of each new quarter. The review and feedback had to be posted on the mySiebel performance management module. But unlike the posting of objectives, which were accessible to everyone inside the company, performance evaluations were visible only to the managers to whom the employee reported. Accordingly, only Tom Siebel, as CEO, could access everybody’s performance evaluations. Bonuses were tied to the achievement of quarterly objectives. For people involved in delivery projects, a large part of their objectives and compensation were tied to sales targets and customer satisfaction scores. For sales people, part of the bonus was held back and paid out over the course of a year based on quarterly customer satisfaction scores. The salesperson could lose some bonus if the implementation suffered. The bonus could be as much as 40% of salary and the company was heavily involved in stock ownership. Employees owned 40% of the company (including the 15% that Tom Siebel owned). As part of its workforce improvement initiative, and in a policy similar to General Electric’s, Siebel Systems had a policy of ranking and discharging the bottom 5% of employees every six
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