Are You a Performance Management Sell-Out?

Tough question - find out more about how your performance management system may be allowing managers to cop out of the tough conversations in my recent column at workforce.com.

Also, here are my Top 5 ways to know if your PM system is bailing managers out:

1. There are no "does not meet" or below-average ratings: If your managers aren’t delivering some bad news, they don’t feel compelled to be candid about performance. Change the expectation.

2. Employee pay increases are clustered around the budgeted average merit increase percent: Everyone getting 3 percent means rewards are being withheld from high performers to avoid tough conversations with low performers.

3. High performers are leaving your organization for better opportunities: If they can’t get feedback differentiating their performance from others and/or more than 3 percent increases from you, they’ll go somewhere else. That’s not good.

4. Your performance management system has no individual goal setting: Socialist countries don’t bother attempting to define individual contributions. Don’t encourage employees to be mediocre.

5. You have no employee relations issues that are related to frank and honest feedback about low performance: If you don’t have at least a few employee relations issues related to low review scores, you have a culture reinforcing that being average is OK. Is that going to help you make your revenue number?

Is that you or your system?

Comments

[Wally Bock]

Great post, Kris. It sparked two thoughts.

First, performance management that can answer yes to those five questions is precisely what got managers like Jack Welch to implement forced ranking (GE calls it "differentiation" and "fire the bottom 10 percent" programs.

Second thought. Is that no formal system will work if the supervisors don't understand that performance management is something you do routinely, several times a day, as a core function of your job.

[joshems]

Excellent article.

Question. How do you recommend employers who follow your rating system give out raises? Should it be based on the eval and those employees who do not meet or exceed do not get a raise? How would you than raise employee performance? Should companies go to a twice a year eval and base raises on the second eval?
what about a company who does raises yearly for all employees? should it just be a 3% or 4% raise based on meets or exceeds?
I am just trying to get a feel for what many other companies are going with.

[Kris]

Wally -

you are right on the money with the GE comment - click through to the Workforce article if you haven't already, and I made the same conclusion - forced ranking is the last resort for organizations that won't manage performance day to day through tools like your coaching package.

Josh -

Great question - I am a big fan of a performance check in at least quarterly - not a formal review, but using the same objectives to let people know where they stand, then giving solid feedback about what they need to do to become a Meets or Exceeds for the formal review.

Once a year merit is fine in my eyes. Don't do a 3 or 4% increase that feels like a cost of living or across the board. Give the Exceeds employees at least 5-10%. But, to do that and stay in budget, you'll need to take it away from the non-performers. That's where most merit pay movements lose their steam...

Thanks for the interaction - KD