People Strategy

Best Practices for Establishing a Modern-Day Performance Management System

Best Practices for Establishing a Modern-Day Performance Management System

Over time, while completing executive placements for private clubs and when reaching out to top-performing general managers, we have consistently been surprised to discover that in many scenarios there is a subjective process for performance evaluation or not one at all.

This is concerning as we often see a connection between managers who aren’t receiving feedback and managers who are being let go from their positions.

As we noted in Part I, “It’s YOUR Club … But It’s MY Life!” (BoardRoom magazine, January/February 2024), clear communication and alignment of initiatives are essential for a GM’s success.

Transparency is vital for a new GM and it is equally as important to maintain that transparency as time goes on. There should not be any blind spots for the club’s leader, and without regular feedback on performance or a system in place, there likely will be.

While some managers may be comfortable not having a specific and measurable review process, we see that top-performing clubs and their executives have formal annual goal-setting/feedback processes and meet twice annually to review these goals. These are reasons we believe managers should instigate the implementation of such practices:

  • With a formal system in place, there’s no denying that the review is fair, mutually agreed upon and measurable. The system also helps avoid challenges presented by board turnover.
  • Without a review, the GM doesn’t know the perceptions, priorities or preferences of others, and this creates blind spots. When the GM is made aware of blind spots, they can then work to communicate better or overcome these situations.
  • In the absence of measurable goals, there is the risk that an uneducated president or board could deny a portion of the GM’s bonus simply based on their opinion(s).
  • Accountability at every level is becoming mainstream in businesses today. It is only a matter of time until a board member or club president begins to question the process.
  • The best GMs in the business seek feedback and strive to constantly improve. Seeking feedback is proactive. Would the GM rather the board/executive committee/ club president design the review process, or would the GM like to lead that charge?
  • As feedback becomes more prominent with younger generations and in business practices, allowing feedback to flow through the entire organization will become increasingly important to club success.

We recommend the GM and club president/executive committee calendarize the review process so it isn’t forgotten about. At the beginning of the year, goals should be established together, then reviewed mid-year review and at end-of-year.

Managers and presidents must understand the importance of these meetings as they create synergy and avoid disconnects in club leadership. We believe these conversations should be kept to a group no larger than the executive committee, and the criteria should be determined and agreed upon by the GM, the club president and/or the executive committee.

While some clubs base a GM’s bonus 100 percent on financials or on beating the budget, we believe that is a mistake. We also have seen bonus potential of up to 50 percent of a GM’s annual salary and some with no bonus incentive. We recommend a bonus potential equivalent to 20 percent of the GM salary and based on measurable and mutually agreed upon goals.

The GM should have some input as to what he or she is being reviewed on and by whom. Those involved in the process should be a select group of objective people who know and understand the GM and the criteria based on agreed upon areas. The most common areas include:

  • Member satisfaction/Net promoter score – Must have surveying in place for one year
  • Employee satisfaction/Net promoter score – Must have surveying in place for one year
  • Financial management
  • Membership management – Net growth/Waitlist management
  • Human capital management
  • Capital management
  • Strategic leadership
  • Building maintenance/FFE management
  • Communications

We suggest integrating the five strategic pillars relevant to running a successful club into the bonus/review process and attaching key performance indicators to each of these areas to ensure clarity and measurability. For example:

  1. Financial sustainability (20 percent of bonus): Operating the club in a way that supports the club’s mission, maintains healthy membership levels and all operating needs as well as capital investment.
    1. KPIs to measure:
      1. Achieve club annual budget
      2. Ensure all club departments achieve their departmental budgets annually
      3. Achieve/maintain 1,500 total members by yearend.
  2. Effective leadership (20 percent of bonus): Leading the club through transparency, effective communication and adoption of best-in-class governance practices.
    1. KPIs to measure:
      1. Update and improve leadership onboarding to ensure a comprehensive approach, vital sharing of information and systems that will create successful outcomes
      2. Design and deploy ongoing leadership development processes to ensure key staff leaders are consistently educated, developed and invested in.
  3. Member engagement (20 percent): Cultivate deep engagement with the membership by ensuring frequent usage, meaningful relationships and emotional connection to create passionate ambassadors who embrace an ownership mindset.
    1. KPIs to measure:
      1. Achieve/maintain net promoter score of nine or higher
      2. Achieve/maintain previous year member usage numbers or higher.
  4. Human capital management/Operational excellence (20 percent): Building a well-trained, best-in-class, highly functioning team of professionals by actively attracting, retaining, developing and rewarding the club’s most valuable assets.
    1. KPIs to measure:
      1. Maintain/improve team member net promoter score of nine or higher
      2. Design and deploy standard operating procedures for all front-line positions to ensure club standards are consistently met in all areas of the club
      3. Establish an effective retention plan to reduce employee turnover to 5 percent or less.
  5. Capital planning (20 percent): Capital asset planning includes equipment, machinery, amenities, buildings, infrastructure and land needs being maintained, reinvested in and replaced in appropriate time frames to ensure facilities are fresh, relevant, functional and appealing.
    1. Create a capital reserve study to ensure all club assets are documented
    2. Execute kitchen renovation on time and on budget
    3. Effectively enhance the employee break room based on responses from employee surveys while completing on time and on budget.

The “weight” of each item and the “weight” of each KPI should change based on the importance of each to the club and its overall goals. How heavily each is rated should be mutually agreed upon by all parties. In addition, board discretion should be used when necessary. Taking the COVID19 pandemic as an example, boards should have the ability to alter, modify or amend the payout plan in the best interest of the club in the event of unforeseen events impacting the operation.

Overall, when creating a review/bonus plan, the following questions should be answered with yes:

  • Do the goals support our strategic plan?
  • Are the goals SMART? Can we define what success looks like?
  • Does the plan reward team and individual performance – not one at the expense of the other?
  • Upon accomplishment of these goals, will our club be materially closer to our vision?

Lastly, a case can be made for incorporating 360-degree performance reviews into a club’s performance management system. When considering implementing 360-degree performance reviews, we recommend participants are mutually agreed upon and that all department heads, some board members, some committee members and some members at large are included in the process. This doesn’t necessarily need to be an annual process, as a bi-annual 360-degree performance review is sufficient.

Clear feedback, as a dynamic exchange, benefits the GM/COO, the team, the board and the club as a whole. When GM/COOs actively seek feedback and participate in goal-setting, it demonstrates their commitment to personal and professional growth.

This commitment significantly contributes to the club’s success and fosters a positive, forward-thinking organizational culture. Such a culture not only meets the expectations of younger managers but also positions the club as an attractive workplace for emerging leaders eager to contribute to their own growth and the club’s overall success.

BoardRoom – March/April 2024

Best Practices for Establishing a Modern-Day Performance Management System2024-05-29T16:19:28+00:00

It’s YOUR Club … But It’s MY Life!

It’s YOUR Club... But It’s MY Life!

An eager and extremely qualified GM begins a new job with a great club. The club president and board give the new GM goals and set initiatives.

Everyone is excited about the new working relationship. Within a year or two, the GM completes the initiatives set forth … yet confusion and frustration begin to arise in factions of the membership. Then those feelings begin to spread to more members. Soon the staff also begins to raise concerns that are then fueled by members’ frustrations … all because members and employees don’t know or understand the board’s directions to the GM. The problems snowball and suddenly the GM is let go … even though the GM did exactly what the board asked the GM to do.

This story may seem far-fetched, but this kind of situation happens over and over again in the club industry. All too often decisions are made to eliminate a GM based on emotional factors caused by gaps in communication and misalignment. When it comes to significantly impacting a person’s life, career and family, terminating a GM should not be quick or reactive.

Members and employees must be included in the initiatives the board and GM have agreed upon, or they will be left to make their own conclusions and assumptions. When objectives are not shared or not clearly articulated, it leads to a lot of behind-the-scenes conversations which lead to misinformation. When misinformation is fueled by emotion, things get out of hand and escalate quickly.

So, when bringing in a new GM, the board must share with the membership and staff the direction/goals that the board has given to the new GM. Transparency is essential so the path ahead is clear, there is a level of understanding and no surprises. During a transition and the onboarding of a new GM, widespread understanding is essential.

Alignment and accountability of the club’s constituencies (board, committees, members at large, employees, etc.) are crucial for a successful transition. Constituency groups may get overlooked or are unaware when boards only communicate directions, master goals and initiatives among themselves and the GM. Consequently, there must be effective communication, which is never easy, along with clear expectations and alignment between constituency’ goals, and accountability at every level.

To ensure alignment and accountability:

1. Schedule a board orientation that includes the new GM within the first 30 days of the new GM’s start. We have found this to be one of the most effective ways to ensure alignment.

2. Clearly define roles and responsibilities and tie them to the master goals, which the board sets with the GM.

3. Have a plan, data and information for true accountability. This document clearly spells out the objectives, tactics, accountabilities, time frames and costs, and it should be updated for each board meeting to ensure continued focus of this critical success factor. Essentially, use a performance management system to document the GM’s accountability and the accountability of anyone else in the organization who is responsible for certain aspects of the plan.

4. Communicate the role members and employees play in helping the GM achieve goals.

The GM must be aware of the performance management criteria. Scheduled performance reviews should occur regularly (annually at minimum, quarterly at most) to ensure alignment of priorities and that goals are being met. Master goals for the GM should inspire the performance management criteria.

Use an evaluation matrix to give the board a clear snapshot of the GM’s performance and provide a basis for decisions that may need to be made in the future. If predetermined performance goals aren’t met, the performance evaluation matrix should detail a specific timeline to offer the GM the opportunity and time for improvement.

When it comes to GM accountability, there should be a standard operating procedure for raising an issue about the club/operations/GM. The process should be respected and the results clearly communicated. The board must also be brave, prompt and communicate effectively the actions being taken. This is much more successful than the board defending itself or the GM after “shots have been fired.” Establishing
trust right out of the gate with members and employees is crucial. Ensure a transparent, data-driven process and follow up and follow through, recognizing that communication takes many forms for constituencies to fully understand expectations, priorities and overall allocations of money, time and focus.

Boards must be vigilant on the front end to create success on the back end.

For example: If pace of play is an issue at the club and the pro is out on the golf course actively moderating pace of play, then there shouldn’t be much shock that the pro is hurrying people along. And the pro most certainly shouldn’t be reprimanded for doing so. If the golf committee’s goal is to speed up the pace of play, then the members can’t be allowed to criticize the pro for working to speed up play. This initiative needs to be communicated effectively in advance so no member should be surprised.

Being good communicators and “playing offense” is much more effective than keeping directives closely held by a small group of members and the GM, and later being on the defense when people claim to be unaware of what is happening and why. People rarely win when they only play defense.

Clubs must make every effort to openly share expectations, provide data-driven feedback and identify areas of improvement with reasonable timelines to ensure managers are well aware of how their performance aligns with club expectations.

Club presidents and boards must consider the ramifications of just “switching out a manager” or making quick decisions without thinking about the lasting effect a termination has on the person, their career, their family … and on the club.

As a follow-up to this article, we will offer best practices for setting goals and creating a performance management system in the next issue of this publication.

BoardRoom – January/February 2024

It’s YOUR Club … But It’s MY Life!2024-03-19T20:08:37+00:00

Making the Workplace Work Better

Making the Workplace Work BetterNearly two-thirds of respondents to the Outlook 2024 Pulse Survey chose workforce issues as their greatest area of concern when choosing from a list of factors that could affect their clubs in 2024 and the remainder of the decade. A separate open-ended question about the greatest challenge currently facing the club industry yielded many other responses related to staffing and the workplace, including:

“Securing appropriate staff to fulfill the demands of the new generation of members.”
“The generational shift in work attitudes.”
“Losing key staff to larger clubs with higher pay scales.”

These challenges and more will be top of mind for club leaders throughout 2024. The labor market will continue to be tight and for any club to successfully compete for top talent and retain its high performers, all these issues will need management’s full attention:

Employee well-being. Club leaders need to go beyond the traditional approach of providing basic employee needs such as a livable wage, affordable healthcare and retirement/ pension support. They must also start to take action on work/life integration (as opposed to work/life balance) by addressing management burnout with flexible work schedules, urging people to take paid time off and redefining reasonable workloads.

AI Integration. Artificial intelligence is coming, whether it’s wanted or not. So how are clubs proactively integrating AI into their hiring processes, operational efficiencies and employment policies? AI is redefining roles within club organizations along with the skills that are necessary in any position. Updating job descriptions, job postings and performance criteria to reflect this change will be important.

Human skills development. This is not a new focus, but one that is more critical than ever. Managers need to be trained on effectively leading their teams. Continuing to promote from within is great, but failing to arm new leaders with the skills they need to effectively lead their people is not so great. Shortcomings in this area not only affect a club’s ability to retain top talent, it also negatively impacts the member experience. 

Securing a dedicated HR leader. Talent makes a club successful. Having a dedicated, strategic HR leader who serves as a talent strategy quarterback will provide a leadership team with a strategic partner who can create recruitment, retention, engagement and leadership development strategies that will take the member experience to the next level. Clubs that do not have a dedicated HR leader need to add one.

Digitizing the employee experience. HR technology is a critical component not only for operational efficiencies, but recruitment and retention. Members of Gen Z expect a digital experience with their employer. Paper applications, file cabinets for employee files, table tents in the employee breakroom and flyers attached to paychecks are all now a thing of the past. Integrating technology into the employee experience through enhancements such as an employee app, electronic application and onboarding processes, self-service access to time-off requests and shift changes, and online performance feedback are just a few examples of how clubs now need to evolve.

Pay transparency. States are quickly adopting laws requiring organizations to be transparent about pay rates. What does that mean? Job postings will require clubs to disclose pay rates for their positions. How people are paid matters, and if a club’s compensation rates are inconsistent with no justification, this will create not only liability from a potential discrimination standpoint, but also employee morale and retention issues. To get ahead of this issue, clubs need to document their compensation philosophy, pay ranges and performance/merit increase policies.

Blowing up the performance-review process. Traditional annual performance reviews no longer work. Top-performing organizations are moving away from the sterile, ineffective annual performance-review process to a more agile, frequent and informal feedback process. Younger generations want more regular feedback and interactions with their managers.

Club Trends – Winter 2024

Jodie J. Cunningham, SPHR, SHRM-SCP is a HR/Talent Strategist, Consultant and Search Executive with KOPPLIN KUEBLER & WALLACE. She can be reached via email: jodie@kkandw.com.

Making the Workplace Work Better2024-02-21T19:34:35+00:00

The Role of Artificial Intelligence in Enhancing Membership Experience and Operations

In today’s private club landscape, maintaining a competitive edge means embracing innovation. Artificial Intelligence (AI) offers tangible benefits for member clubs, promising to elevate both the membership experience and operational efficiency. Understanding the pragmatic integration of AI is crucial to realising its true potential for impacting clubs for the better.

Membership Experience

AI has the capability to revolutionise membership engagement with your club. By leveraging AI-driven personalisation, clubs can tailor offerings to individual preferences, creating a bespoke journey for each member. From customised event suggestions to personalised communications, AI enhances engagement and fosters a sense of exclusivity.

Moreover, AI-driven analytics can provide invaluable insights into member behaviour, allowing clubs to anticipate needs and preferences. This predictive capability enables proactive service delivery, ensuring that members feel understood and valued.

However, it is essential to strike a balance. While AI enhances personalisation, maintaining the human touch is critical. Combining the efficiency of AI with personal interactions ensures a holistic and enriching membership experience.

Operational Efficiency

In relation to operations, AI can streamline processes and optimise efficiency. From automated member onboarding to predictive maintenance for club facilities, AI can handle routine tasks, freeing up staff to focus on more complex and interpersonal aspects of their roles.

AI-driven analytics can also revolutionise decision-making processes by providing data-driven insights. From resource allocation to financial planning, clubs can make informed decisions, leading to better overall management.

Nonetheless, it is crucial to implement AI in a way that enhances, rather than replaces, human capabilities. Staff should be trained to collaborate effectively with AI systems, ensuring a seamless integration that maximises operational efficiency while preserving the human touch.

Balance

The integration of AI should be seen as a complement to, not a replacement for, personal relationships within member clubs. While AI enhances efficiency, human interactions provide the emotional connections that are the backbone of any successful club.

Understanding the importance of this balance is key. AI can handle routine and data-driven tasks, allowing staff to focus on building meaningful connections with members. The human touch remains irreplaceable in cultivating a sense of community and loyalty.

As managers in the club industry, great opportunity exists in understanding the benefits of embracing AI and identifying the solutions best-suited for their operations. Additionally, advocating for and outlining a progressive technology budget with implementation timelines and plans are key to components to success. The return on investment goes above and beyond the membership experience and operational enhancements discussed above. Top candidates for open positions will prioritise private clubs that embrace technology when considering their next career opportunities.

Michael Herd is an International Consultant and Search Executive with KOPPLIN KUEBLER & WALLACE, a consulting firm providing executive search, strategic planning and data analysis services to the private club and hospitality industries. Michael can be reached at +44 (0) 7903 035312 and at michael@kkandw.com.

The Role of Artificial Intelligence in Enhancing Membership Experience and Operations2024-01-25T22:06:42+00:00

The Importance of Search Committees

The Importance of Search Committees for Country Clubs

If your club is searching for a new GM/COO or another department head position, establishing a search committee is highly recommended. Creating a smooth, effective and efficient process should be the goal for any club hiring a key position. According to Kopplin, Kuebler and Wallace, the most important factor for determining success in hiring a key position is the establishment and makeup of the search committee.

A separate search committee should be formed for each key position and members should be purposefully and carefully selected for each committee. They should meet a certain criterion and possess a willingness to invest the time and energy required for the role. Sitting on a search committee is a responsibility that should not be taken lightly.

The composition of the committee should include five to seven members who represent various demographics of the club. Odd numbers are best in case of a tie and smaller committees are better because too many opinions hinder the efficiency of the process. Members selected should be frequent users and big supporters of the club. When searching for a key position such as the head golf professional for example, it would be ideal to include golfing members of all ages and abilities on the search committee.

Kopplin, Kuebler and Wallace believe the most vital element of any search committee is confidentiality. Search committee members must never reveal any information about the candidates or their current positions until it has been officially announced by the club. Even the slightest inkling to a friend who may know a candidate or someone at a candidate’s current club could jeopardize the search. Candidates’ jobs could be at stake and the club may lose good candidates or their organizational credibility through the process.

It is also vital to recognize that candidates will be observing search committee members to get a feel for the club culture and whether it aligns with their career goals. Members serving should be positive representatives who thoroughly enjoy the club. While the hiring of department heads ultimately falls under the GM/COO’s responsibilities, including members in the process helps create buy-in and consensus on the decision.

Private Club Advisor – December 2023

Contributed by Richard Kopplin, Kurt D. Kuebler, CCM & Thomas B. Wallace Ill, CCM, CCE, ECM, Partners at KOPPLIN KUEBLER & WALLACE.

The Importance of Search Committees2024-01-18T17:31:36+00:00

The Power of Employer Branding in a Candidate-Driven Market

Power-Employer-Branding

In today’s evolving and competitive job market, the balance of power has shifted. With the rise of a candidate-driven landscape, job seekers are active decision-makers in the hiring process. In such a scenario, the concept of “employer branding” has taken centre stage, emerging as a pivotal factor in attracting and retaining top talent. In this piece, we will delve into the significance of incorporating employer branding into your talent strategy and how it can make all the difference in securing the best professional team for your club.

A Paradigm Shift

In a candidate-driven market, the demand for skilled professionals exceeds the available supply. As a result, job seekers have a plethora of opportunities at their disposal, enabling them to be selective about the companies they choose to work for. The conventional recruitment process, where employers held most of the decision-making power, has evolved into a scenario where companies need to be prepared to showcase themselves as an employer of choice.

Crafting an Identity

Employer branding is more than just a buzzword; it is the identity and reputation that a company portrays to the outside world. Just as a strong consumer brand attracts loyal customers, a robust employer brand appeals to first-class candidates who are seeking not just a job, but an experience. In a candidate-driven market, employer branding is the tool that differentiates your club from the rest, making it a preferred destination for the best talent.

Key Elements of Effective Employer Branding

  1. Authenticity: The foundation of any strong employer brand lies in authenticity. It’s not enough to just create a polished image; it must be grounded in reality. Authenticity builds trust and credibility, both of which are crucial in attracting top talent.
  2. Club Culture and Core Values: Candidates are searching for a workplace that aligns with their beliefs and aspirations. A well-defined club culture and strong core values will help candidates resonate with your club and envision themselves as part of your club’s story.
  3. Employee Value Proposition: It’s important to outline what your club offers to employees in terms of benefits, opportunities, and overall work experience. A compelling employee value proposition showcases the unique advantages your club provides and sets it apart from competitors.
  4. Employee Testimonials and Stories: Real stories from current team members can provide a genuine glimpse into daily life at your club. These perspectives serve as powerful endorsements that candidates can relate to.
  5. Engagement and Communication: Regularly engage with your target audience through various channels, such as social media, dedicated space on the club’s website, news releases, and educational opportunities. Identifying relevant brand awareness opportunities and committing to consistent communication nurtures connectivity and keeps your candidate pipeline informed and engaged.

In Conclusion

Cultivating a strong employer brand, especially in the competitive market of hospitality, will prove great return on investment in the areas of securing talent more quickly and lowering recruitment expenditures. A positive perception and strong understanding of the club’s values, culture, and unique offerings will earn a strong pool of prospects when positions become available and result in lower turnover due to the alignment you have already established. Going forward, making a strategic investment in your employer brand will make all the difference in building a thriving and enduring professional team.

Michael Herd is an International Consultant and Search Executive with KOPPLIN KUEBLER & WALLACE, a consulting firm providing executive search, strategic planning and data analysis services to the private club and hospitality industries. Michael can be reached at +44 (0) 7903 035312 and at michael@kkandw.com.

The Power of Employer Branding in a Candidate-Driven Market2023-11-30T16:51:02+00:00
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