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Contracts Part III: For security, have performance evaluations in your contract

Employment agreements defining job assessments can ensure timely reviews and protect CEOs against surprise swing of the axe


January 22, 2010

By Jonathan Hemmerdinger

Association boards of directors can be reticent to complete CEO performance reviews. After all, a thorough evaluation is time intensive. And honest appraisal often means the inherent discomfort of mentioning or discussing a colleague’s shortcomings.

Nonetheless, performance reviews can make a difference to a leader’s success. To assure that CEOs receive timely and candid assessments, career consultants and seasoned association executives suggest stipulating basic performance review details in an employment contract.

Multiple sources agree: boards of directors—perhaps even more than staff supervisors—are notorious for postponing performance evaluations, sometimes indefinitely.