Performance Accountability

The greatest failure in performance management in any enterprise is the failure to hold managers accountable for their performance.? Many private club operations do an inadequate job of establishing and ensuring accountability.? This failure is crippling to the long-term health and viability of the club.? Here are some steps to help measure performance and hold managers accountable:

·??Expectations.? People cannot be held to a performance standard without clearly defined expectations.? By design, job descriptions provide a synopsis of duties, but do not delve into sufficient detail for managerial and supervisory expectations.? What I Expect from Our Club Management Team provides a well-rounded explication for club department head positions.

·??Managerial Training.? No two individuals will have the same background, experience, and understanding of expectations even after they’ve been spelled out. To ensure comprehension, expectations must be backed with consistent training and ongoing review of the wide range of knowledge and skills. These topics include the club’s foundational documents, leadership, organizational values, accounting, human resources, management disciplines, employee development and discipline, and other necessities of proficient management.

·??Annual Work Plans.? Each department head must prepare a work plan spelling out goals, proposed accomplishments, and timelines for completion of each item.? It’s always a good idea to involve managers in preparing their own work plans though these must be based upon guidelines from the general manager.? While a manager’s work plan buy-in is important to his or her commitment, plans must meet the requirements of the board and general manager.

·??Zero-Based Budgeting.? To hold managers of profit or cost centers accountable for meeting budgets, they must participate in developing their own zero-based budgets.? A top-down, unrealistic budget will defeat a manager from the get-go, but “softball” budgets cannot be accepted either.?

Zero-based budgeting is distinct from the common practice of taking last year’s operating results and adding a percentage inflationary increase, thereby incorporating last year’s operating inefficiencies and plan requirements into the financial plan for the coming year.? This budgeting method merely compounds erroneous and often “fat” budgets year after year.

The best way to zero-based budget is to use # of transactions/average sale and # of hours/average hourly wage benchmarks to build the revenue and payroll components of the budget.? Not only do these historical metrics make for more accurate budgets but ongoing analysis of these benchmarks makes for better understanding of shortfalls in revenue or overages in payroll costs.

·??Benchmarking.? All departments must be benchmarked in detail – at minimum, revenues, cost of goods, payroll, and other operating expenses should be benchmarked monthly.? These and other benchmarks are the most objective measures for holding managers accountable.? Coincidentally, doing so also makes for much easier and more accurate budgeting in succeeding years.

·??Real Time Accounting/Tools to Beat Budget. ?When managers with bottom line responsibility use the Tools to Beat Budget program to track their revenues and expenses in real time, they exercise greater control over their budget and financial performance.? Properly maintaining a Tools to Beat Budget binder provides all the information necessary for in-depth monthly reviews of performance by the general manager and other interested parties.

·??Monthly Review of Financial Statements.? The general manager should hold a series of monthly meetings with the club controller and individual department heads to review progress on work plans, actual to budget performance, benchmarks, and efforts to correct operational and performance deficiencies.? These meetings permit ongoing review and course corrections as necessary.? Not only do these meetings provide ongoing review of departmental operations, but by continuing analysis they also sharpen the financial and business acumen of the management team, individually and collectively.

·??Routine Departmental Inspections.? Use routine inspections with a standardized checklist to randomly inspect all operating areas including storage areas on an ongoing basis.? Such inspections should monitor cleanliness, order, maintenance, safety, security, and other signs of organized and efficient operations.? Such inspections when standardized, scored, and benchmarked provide an ongoing measure of these operational basics.

·??Performance Reviews.? Base periodic performance reviews for each manager on specific accomplishments and meeting well-defined performance measures.? Meaningful reviews are directly dependent upon the effort put into defining expectations, establishing specific work plans, and creating objective measures for accomplishment and performance.? While it takes some effort to set up a system of objective measures, the rewards for doing so are immense and well worth the effort.

Unless a general manager does everything herself, she must rely on the efforts and performance of her subordinate managers.? But without measurable accountabilities she has no real means to drive her agenda, performance, and operational initiatives.? When department heads aren’t held accountable, only the general manager will be.

Recommended Reading and Resources

Professional Development:

·??Performance Management - An Essential Discipline of Success

·??Annual Budgeting Disciplines - An Essential Element of Performance Management

Operational Resources:

·??Expectations, Work Planning, and Performance Reviews

·??Tools to Beat Budget – Real Time Accounting

·??Club Benchmarking Resources

·??Leadership on the Line and The Workbook

Training Resources:

·??Leadership on the Go

·??Organizational Values on the Go

·??Management Disciplines on the Go

·??Accounting on the Go

·??Human Resources on the Go

·??Employee Development and Discipline on the Go

·??Basic Accounting and Financial Management for Club Managers

·??Managers’ Handbook