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How the Merit Matrix Screws Your Company and Your Managers...

You know what one of the roles of the company is?  To not put managers of people in impossible situations.

Case in point.  The merit matrix.  You want to do pay for performance, but you don't want to take anything away from average people in order to give it to great employees.  The reasons for this are many: Money

--You're not very good at performance management as a company.

--You think the difference between 2.8% and 3.7% is significant. You didn't major in math.

--You're a pinko commie/socialist who believes that the enemy of the state are talented employees who must be brough back to the pack.

--You've been mind warped into believing a merit matrix is in your best interests...

So anyway, you've got a merit matrix in play at your company for one of those reasons.  With that in mind, your managers deliver an above average review to multiple employees, at which point they are forced to have to tell the employees that equates into a 3.2% raise.

The employee appears unimpressed, and the smart as #### ones get vocal.

At which point your manager utters the words, "I'd like to give you more, but I can't.  This is all they'll let me give you."

"They" means "You" - the HR pro or the company.  It's called the "manager pass-through", and it erodes trust and confidence from the employees towards all parties involved.  The manager.  The company. The HR pro.

Those conversations are happening every day.  Find another way soon - because it's killing you, whether you know it or not.

Comments

TFarnlacher

I would argue that the merit matrix is just a tool and if designed/used properly can deliver differentiated pay. If the matrix is designed to deliver 2.5 to 3x the increase to a top contributor compared to an average one, I feel that is pretty significant. The bigger problem in my opinion are managers afraid to do an honest performance assessment of their employees because that requires a difficult conversation that can't be blamed on HR.

Howard Nizewitz

With fairly low merit budget pools in place at most firms, while there still can be differentiation in increases, the amounts delivered do not feel that different (or good) from an employee perspective. And the "average" rated employee will need to suffer along with lower performers to differentiate awards to deliver higher increases to the better rated performers. So, perhaps as suggested, more thinking needs to go into the other aspects of the review process such as the career develpment process and other opportunities that may exist withtin the company? The difference between the actual increases delivered will not inspire anyone in of itself.

Mark Rome

As leaders, do we always do everything we can and should to hire, retain, reward, and develop exceptional people?

Within every organization, decision making drives performance. Every employee comes to work every day and makes decisions that impact performance. These decisions, at every level of the organization, define the corporate culture and drive performance.

There are ten process (10) steps to strategy execution:

Step 1: Visualize the strategy.
Step 2: Communicate strategy.
Step 3: Identify strategic projects.
Step 4: Align projects with strategy.
Step 5: Align individual roles and provide incentives.
Step 6: Manage projects.
Step 7: Make decisions aligned with strategy.
Step 8: Measure the strategy.
Step 9: Report progress.
Step 10: Reward performance.

Is an essential role of human resources to acquire data on how well individual roles align with corporate goals and strategy?

Is an essential role of human resources to design incentives that encourage and reward performance, while enforcing compliance will applicable laws, rules and regulations?

With the right tools and the right data, can human resources better understand its workforce to align the culture (decision making) with corporate goals and drive performance?

With the right tools and the right data, can human resources better understand its corporate culture to improve the hiring process?

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