-----Original Message-----
From: 	Humphrey, Gene  
Sent:	Wednesday, September 26, 2001 4:07 PM
To:	Lay, Kenneth; Whalley, Greg; Frevert, Mark
Subject:	PRC Process



				

	I have long thought that the PRC Process needs to be changed in order to better provide the appropriate feedback and motivation as well as rewards that a good review process should.  I hope you will consider my thoughts carefully since I have had active involvement in the process from its inception and believe that I can offer some advice that should be considered.  

	It appears that the results of the process have become too demoralizing to the employee being reviewed.  Even those that do well are suspicious of the process and don't particularly like it.  It causes a great deal of stress on employees and creates an atmosphere of cynicism among the people that should be supportive of it.  There is a belief that the process is arbitrary and that no one gets a fair hearing based on their performance but rather the results are skewed by the negotiating skills and argumentative success of any particular reviewer.  The biggest single complaint seems to be the fact that an employee can be told after one review period that they are excellent and six months later be told they are only satisfactory or worse.  While the employee's performance may have suffered during that period of time, the message that they hear is not necessarily that their performance has declined but rather that they as an individual are not valued and are not as good as they were six months earlier.  We are mixing the message between the worth of the individual and the results of their performance.  The following is my recommendation to improve on this system:

	SEPARATE THE PERFORMANCE CATEGORIES INTO THREE MAJOR CATEGORIES   

	
	1.  Employee Skill, Competency and Character  - This category measures a persons inherent skill, talent, intelligence and commitments to Enron's values.  This determinant should not change drastically between each review period since it measures whats inside a person and that should only change slowly or with the development of new skills or the hiring of new and better qualified employees.  In this category a person could be told whether they are excellent or superior or average and know that they have an opportunity to improve on that ranking through their own effort while also realizing that we are continually trying to raise the bar with new hires.  This particular performance measurement is also a measure of the success of our hiring and training program.

	2.  Employee Performance - This a measure of how well an employee is performing the tasks of any particular job.  This measure could fluctuate much more than the first since each person's performance can vary greatly over time based on many different circumstances.  This measure would also distinguish those employees who may not be considered to have the best skills or greatest intelligence but who through sheer hard work and determination are outstanding performers.  It should also help identify those who are under performing and not living up to their potential as measured by the first category.  This category also measures our skill as managers and leaders of people since it is often the managers job to motivate people to perform above and beyond their own capability.

	3.  Results - This is a measure of the financial performance and result of the effort of any individual employee.  I believe this criteria is most suited to the commercial employees and should be the major determining factor (but not the only on) in annual bonus payments.  This should be closely correlated to the Job Performance criteria but it may not always be since some people may be working on a long term project which has a payback at some future date or in the other extreme someone could have lucked out by being in the right place at the right time and gaining the benefit from it without the appropriate effort.

	In addition to these three categories I would also reduce the Job Descriptions that are included in the PRC process.  I think it is a waste of time to include clerks,  assistants, accounting personnel and other non manager commercial support people in the process.  Very little is gained by them or by management and a tremendous amount of stress and ill will is created.  I would also reduce the amount of time spent on the PRC at mid year and only focus on the first two performance categories at that time.  I would also change the time when the PRC review is done since now it happens in the summer when many people are trying to scheduled vacations and at year end when there is so much other business activity going on.  I think a March, September schedule would work much better.

	There are probably many other ideas to improve the PRC process and I am sure that you are working on them.  Please give my ideas some thought and see if they don't merit some consideration.