No longer an annual event

Naturally, I am fascinated by how businesses operate and what management styles work in certain situations.  Recently, I have focused my attention on how postindustrial age hierarchy is not working and what that means for companies who are conventional in their human capital management structure.

Early in my career I worked for a large corporation.  The CEO had an Ivy League education, spent a long time in Banking and Public Accounting and he was fairly conservative.  When I started with this company I was told that ladies wear skirt suits or dresses only, hose and closed-toes shoes.  Yep, you got it – women could not wear pants – crazy, right?!?!  That just sets the tone for where I am headed.

Every year in January all the supervisors began gathering last year’s numbers, metrics, performance items and development goals for each person on their team.  There was a form that needed to be completed for each person, reviewed with a second level manager and approved.  Most supervisors hated this process and completed the forms the night before they were due for approval giving them little thought.

As a staff member I quickly learned how to “game” this process.  I would find out when my annual review was going to take place and pull out all my best work the two weeks prior. Then when my review occurred, I received the maximum allowed raise each year.  The developmental discussion was always the same: 1) You are late to early morning meetings; you need to work on being on time, and 2) You are fairly assertive and transparent, which your team members do not know how to handle.  Otherwise you are a top performer, I can always count on you to do your best and as a result you will be receiving a raise of xx%.

There are so many reasons why this method of performance management is flawed:

  1. What have you done for me lately? It does not matter that you have underperformed for three of the last four quarters, but you have been a star lately, so you get a raise.
  2. Small adjustments are much more meaningful. When I read through the “developmental plan” it appeared that the same words were used each year (and they probably were). The fact that my professional development did not mean enough for my supervisor to coach and mentor me toward greatness daily was a huge disappointment.  I needed that!
  3. Managers do not like the process either. As a middle manager, after writing the annual assessments for everyone on your team, knowing that you have only given them surface level thought, you then receive an appraisal from your manager with the knowledge that he/she likely did the same thing.
  4. Incremental feedback, incremental progress. I would rather have 3% improvement monthly than 30% improvement annually.  By helping your team members grow regularly you will be WAY ahead of your competition – they still manage performance annually.
  5. Promotions happen when they should, not just when the budget says they can. If you have high performing people on your team and you do not recognize them, someone else will.  This is a big reason for turnover – your people feel stuck and so they look elsewhere for a position with a company where they have movement.

It is time to ditch conventional thinking and hierarchy.  Start looking at your team as people with hopes, dreams and a desire to serve with excellence.  Give them the development and encouragement they need regularly and see what happens to their performance, do not save it for the “REVIEW.” For more on performance management for today’s workforce visit us here!