Stephen R. Gelman: Lessons Learned in My 40-year Engineering Career (Part 8)

The issue of how to evaluate performance, set goals, give meaningful feedback, and provide incentives for performance is part of almost any organization’s processes. My experience is that they do not always produce the desired outcomes, nor do they necessarily improve an individual’s performance. I was at odds with these processes as soon as I started my work career. In school, you get a grade based on how you do. If your goal is to simply pass, you do not get four quality points for meeting the goal. At work, you will likely be evaluated based on what you do and how you do it. If you do great work but leave a trail of harassed employees or break company rules, you will probably get some negative feedback and rightly so. It is common to set “goals” and evaluate performance on whether goals are attained. Setting goals is an art. SMART goals are common - Specific, Measurable, Achievable, Relevant, and Time-based. This is simpler than it sounds. I am fine with setting goals, but I believe most employees should be evaluated on their work and their work approaches. Simply put, how do they produce the work product — on time, with good teamwork, with accuracy and how do they communicate and deal with issues. And if it is average, say so. Ideally, rather than annual reviews, I prefer giving feedback simply and often. As a young engineer, if you work under a lead engineer, have the lead give feedback after a task or a few weeks into a longer task. Timely, responsive feedback on what the employee accomplished (and how) is far superior to an annual process that often is only a partial picture of performance.

The other issue in reviews is when you do give difficult feedback it can be met with disbelief, resistance, anger, and resentment. This seems to be more prevalent with more experienced employees. It is not easy to deal with a valuable employee who does good things but needs to work on certain issues to progress. This often is where work approaches come in. There are many top performers who intimidate staff but get results. Or they accomplish a lot but have questionable work habits such as extravagant expenses, public displays of drunkenness, etc.

The best guide I can give in these cases is illustrated below:

The X-axis is how well you embrace and live the employer’s values. You have to be clear on what key values your organization has and strives for. The Y-axis is a little clearer — does the person deliver the activities, products, performance and to what degree. Think of the grid as the how (X) and the what (Y). I do not like artificial goals such as puting a certain percentage as “non-performers” or below average. I think of performance evaluations as like energy. You are judged on performance akin to kinetic energy and preparation and basic skills which relates to potential energy. As you are a young engineer, you have a lot of potential. By continuing to learn and develop, you continue to develop and fill more roles while increasing the performance on continuing projects.

The above guide also works for the individual engineer evaluating his current or prospective employer. What are your values? How does the company match your values? As an example, if you value teamwork and do not like office politics and you find your employer has a very competitive environment and you get ahead only by playing politics. Sooner or later, this will not be a good fit.

As far as evaluation systems, I prefer to keep it simple, real-time to the extent possible, and honest. Ideally, part of an organization’s culture is the ability to give honest feedback so that the staff stays motivated to improve and develop in areas where needed.

I will not dwell on incentives and incentives pay very much. My caution is that people, and engineers in specific, are very good at meeting metrics for incentives. The issue I have seen is that it is very hard to determine where to draw the line on who gets incentive pay because it is difficult to know all the key contributors to a successful venture or project and to compare the opportunities and challenges individuals face. If you consider two project managers and one delivers the margin and schedule goals while the other falls short. But if you do not consider the original costing considerations, client issues, technical challenges, or third-party issues, you may not discern which one actually performed better. And you probably cannot tell which team members may have bailed them out or if they were given the “B - team” due to other work commitments. You can meet a project margin goal but leave more money on the table, or you cannot quite deliver the margin and have overcome large issues that kept a sure project loss to a minimum. To reward on “project margin” can be a mistake and lead to team dissatisfaction. Who would want to take on a tough project or assignment?

Most industries only have incentive pay for more senior people. The professional human resources view is that if the incentive or bonus is not “significant,” it will not serve as an incentive. Personally, I think when most employees have the potential to get something extra, it leads to more teamwork and camaraderie. Think a minute about the incentives college athletic coaches often are shooting for. They get extra compensation for getting to a bowl or winning a national championship. It is hard for me to believe that these Type-A, highly driven coaches do anything differently by having an incentive. I view incentives as more of a “thank you.”

Growth, maturity, and wisdom

I am a data-driven person who always wants information before making decisions. This could include test data, performance data, historical information, etc. I did a lot of industrial water and wastewater work, so I always wanted to understand the plant first. What do they make? What are the raw materials? Where are wastes generated? This is just good form for doing this type of work. As I moved more into managerial roles, I still liked data and information to make decisions. Data on markets, data on staff usage and skill sets we had and needed. But what I found out was that as I got older and had done this for years, I formed early opinions on things. And I found out later that many of my first impressions were backed up by data and results. While I still wanted data and backup, I began to rely more on intuition and experience. I realized how little I trusted my intuition early in my career and how with experience and knowledge, we hopefully learn things and become better managers and decision makers. I believe in many roles there is no substitute for experience. This does not mean that young engineers shouldn’t be given challenging assignments. It just means that there needs to be some oversight and help when they need it. Getting back to one of my original points, if they know what they don’t know and are willing to ask for help, then challenging young engineers is great. But I also want to make the point that, at some point, you cannot substitute for wisdom, and that comes with age and experience.

Business, Organizations and Leadership

For a business to thrive, it has to grow. This gives people new opportunities. And any business at some point must make a profit. Startups do not generally make a profit for the first few years, but at some point, they either begin to make a profit or they are promising enough that other investors or another company will acquire them and provide the capital to get to profitability. Established companies generally need to turn a profit to fund the going concern. Cash is king, and most companies fail because they fall short on cash. If you ever want to start your own business, and many engineers do, it is important to have enough working capital to keep the business going. Consider a consultant that starts a project on Day 1. If they pay bi-weekly, they have two payrolls before they even invoice the clients for the work performed in the first month. Assuming the clients pay in 30 days, and many do not, they are already 60 days in or more and are four payrolls, two rent or lease cycles, and other incidentals. Having cash to run the business is no small matter.

Some consider profit a dirty word, but if you do not generate adequate profit, you cannot sustain investments in people and equipment to stay ahead or even in your field. A fair profit is fair and deserved. Howard Shultz, ex and now current CEO of Starbucks, said this recently: “Starting immediately, we are suspending our share repurchasing program. This decision will allow us to invest more profit in our people and our stores-the only way to create long-term value for all stakeholders.” A successful business invests in people and facilities, which puts the business in the best position for those assets to make the business successful going forward.

In the early 1990s, my company went through a “reengineering.” Performance and growth were lagging. The consultant that helped us through this process had a very simple formula, The basis of any organization and its performance is People, Process, Tools, and Structure. Most people think of organizations as “organization charts” and who reports to who. The best process we learned was people first — get the right people on the team. Second, a well-run organization has set processes that are well-defined and followed. By defining and developing core processes, the organization will be more effective and efficient and more quickly able to develop people into new roles. And there needs to be continual process measurement and improvement. In the engineering world, project delivery is a good example of a set of processes to repeatedly deliver high-caliber projects. Tools would include models, software, equipment, CAD, etc. Finally, if you get all that right, you set a structure to make it work that includes process ownership. As Jim Howland once said in his Yellow Book, “Any organization can work as long as the people want it to work.” Too many companies reorganize by changing the organization chart. This approach is more holistic.

Finally, a word about servant leadership. It is my view that the leader is there to help their team achieve its potential and goal and make sure they meet and often exceed their customers’ needs. This is often referred to as servant leadership. The role is not typically a command-and-control role, though some jobs and situations require that approach, such as spill response or construction in a war zone. I believe this is how you get the best out of people and have them motivated to serve the customer.

References

Hopefully, this has been or will be helpful to engineers starting out and maybe further in their careers. It took me a lot longer to put this together than I ever thought. So the lesson that projects usually take longer than expected was again reinforced here. I have mentioned some people and books or references that I wanted to point out. Here are some of the things I used as background:

First, I mentioned Jim Howland’s “Little Yellow Book.” Jim was a founder of CH2M HILL and put this booklet together. It is really part of the inspiration for my efforts here. It is much shorter and is really sayings based on his experience. You can find this at: https://ch2mhillalumni.org/little-yellow-book/. Jim also put together presentations on ethics for engineers that I used to do an updated version. Jim was the epitome of a gentleman and was admired by all who knew and worked with him.

I made several references to Stephen Covey. He is best known for “Seven Habits of Highly Effective People.” I found another book by him, “Principle-Centered Leadership,” to be even more valuable. His concepts on how to behave and work to understand first and then be heard made a lasting impression on me.

Kerzner’s book on project management, “Project Management, A Systems Approach to Planning, Scheduling, and Controlling,” is quite a daunting tome. If you are not serious about project management as a career move, it will likely overwhelm you. But all engineers need to understand the concepts of using schedules and the cost of a project. This book has it all, but it is a good reference on project controls.

I enjoyed and used many articles from “Harvard Business Review” when I was running a unit. It is a great reference for the management and strategy side of the business.

On the technical side, it is always a good idea to subscribe to and read the leading technical and professional journals related to your area of expertise.

Here are a couple of quotes that I like:

“Begin with the end in mind.” - Stephen Covey

“Everything should be made as simple as possible, but not simpler.” - Albert Einstein

Summary

What I can assure you of is that the business of engineering will change dramatically over the course of your career, assuming you stay in it for a decade or more. I will not bore you with what changed over my career except for two small examples. The advent and maturity of Computer Aided Design and the way we now meet, write, and communicate are far different from what they were in 1973 when I started. There is no reason to think the pace of change will not increase as time passes. So be ready to adapt to changes.

Engineering is a great and challenging career. To most engineers, there is nothing more invigorating than an interesting project or assignment. As we deal with climate change and new ways to produce and manage energy, the opportunities for an exciting career will continue to expand. What I do not think will change is my last words:

• Always keep learning and improving your skills.
• People skills will always matter and probably separate those that are most successful.
• There will continue to be value in managing projects and looking for improved technologies to provide solutions.

Good luck!