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What Santa Claus Can Learn From I-O Psychology: Eight Performance Management Recommendations


by Thomas A. Stetz, Hawaii Pacific University

It’s the most magical time of year, a time when Santa Claus rewards millions upon millions of children around the world for their good performance during the past year. What Santa has basically set up is a pay-for-performance system. He only rewards children if they meet his performance expectations. I, therefore, decided to take a closer look at what Santa does from an I-O psychology perspective and make recommendations on how he could improve his approach to performance management. These recommendations not only reduce his risk exposure to litigation but also result in a more fair and accurate system leading to improved child behavior.

Recommendation 1: Develop Refined Rating Scales

Currently children only get presents when they are nice. When they are naughty they get a lump of coal or nothing at all. Thus, Santa’s evaluative system is standards based, but what exactly is naughty and nice in behavioral terms? Santa really needs to further develop his rating scales. I suggest he assemble a representative group of subject matter experts composed of both children and parents. He could either conduct focus groups or collect critical incidents. The result should be behavioral anchored rating scales (BARS) that that vary by grade. I would advise him to steer clear of BARS that vary based on age. I know age shouldn’t be an issue given that he only evaluates children under the age of 40, but it is better safe than sorry.

Recommendation 2: Develop SMART Performance Objectives

Early in January Santa should meet individually with children and jointly develop specific, measureable, attainable, relevant, and time-bound (SMART) performance objectives. These objectives ideally should cascade from the parent’s family strategic plan for the following year. Right now children don’t have any idea of what their yearly objectives are – other than the vaguely defined “be nice,” and there is no clear link to the family operating unit goals.

Recommendation 3. Increase Feedback Throughout the Year

Have you noticed that Santa doesn’t give any feedback throughout the year? Children do occasionally get feedback from their parents during the hectic and stressful holiday season. Unfortunately, nearly all of the feedback comes in the form of threats and are punitive in nature. I propose that Santa institute a midyear review for feedback and adjustment of objectives as required. Ideally he should provide continuous feedback throughout the rating cycle, but I realize that operationally this would be too time intensive and therefore unlikely to succeed based on how he currently has his organization structured. He should also consider greater decentralization and decrease his span of control. Parents could easily be made family team leaders or first-level supervisors with greater input into the evaluation process. Of course, given how parents are currently behaving with their holiday threats, he would have to put all of them through extensive supervisory training.

Recommendation 4: Establish a Naughty Review Board

Currently I am unaware of any process by which children can grieve their naughty rating. Totally unacceptable and nothing more needs to be said here.

Recommendation 5: Get a Handle on Rating Inflation

Come on. Everyone seems to get something. This violates the basic tenets of pay for performance. Under the current system children have no reason to excel. They only have to do enough to meet his minimum expectations and they get rewarded. Anything more is just wasted effort on their part. Part of this problem is related to Recommendation 1. With a better scale, he can differentiate various levels of performance and reward accordingly. I also recommend, however, that he closely monitor and regularly review ratings to ensure that the ratings don’t inflate over time.

Recommendation 6: Explain How He Obtains His Information

How exactly does he know when kids have been bad or good – how? It sounds quite similar to some sort of secret monitoring system. That makes me a little uncomfortable. At least a consent to monitoring statement should be made. Maybe he solicits and gets input from parents – I just don’t know with his closed black box evaluative approach. If he is getting ratings and input from parents, I would think common frame of reference training would be appropriate. Open and honest communication is a must for any successful performance management system.

What's more, I am sure we all remember from our own childhood how some of the worst spoiled kids received a ton of bounty during the holidays, but half of our haul was socks and underwear. There just doesn’t seem to be a clear link between performance and reward. Unless these kids are secretly being good when no one is around, I still don’t understand how they got so much. What’s his information source?

Recommendation 7: Decide Between Developmental or Administrative Evaluations

Currently Santa offers no developmental feedback. Under the existing system how can naughty children improve? They can’t. They don’t know the standards, and they don’t get any meaningful actionable feedback. Thus, Santa has set up a system that perpetuates the underperformance of some children.

It seems that Santa has developed his evaluation system solely as an administrative system that doles out rewards and punishments. I think a redesigned system should focus on the developmental aspects performance management and downplay the actual monetary rewards. Perhaps he should replace the end-of-year gift giving with spot cash awards and an end-of-year award ceremony where high performing children are publically acknowledged and given restaurant gift certificates.

Recommendation 8: Institute Self-Assessments

I suggest that the annual letter to the North Pole be replaced with a standardized self-assessment letter. This letter shouldn’t be viewed as simply schlepping off his work onto already stressed out children. Instead it should serve as a tool to be used during individualized planning and feedback sessions discussed in Recommendations 1 and 2. Furthermore, Santa really needs to move beyond snail mail. He doesn’t even appear to have a fax machine. This is highly inefficient. For a minimal dollar amount, an online system that allows children to submit their self-assessments could be developed.

Of course, an integrated solution would be best. If designed thoughtfully his system would continuously track child behavior throughout the world. With a properly designed performance dashboard he could adjust workshop output in real time, ultimately decreasing production waste and reallocate elf labor or even downsize his elf workforce. Of course this should be done under the auspices of gain sharing and elf wealth maximization.

To summarize, Santa’s current child performance management system clearly has some problems. As it stands know his system has been in place for so long and there is so much structural inertia that any sort of organizational change will be extremely difficult. Unfortunately, that is an “O” topic and would require another article to fully explore.

All of the current problems could have easily been avoided if he had employed or consulted with an I-O psychologist. I know at least one elf wanted to be a dentist. Sadly it appears that none have ever wanted to be an I-O psychologist. We definitely have our work cut out for us when more elves want to be dentists than want to be I-O psychologists.