I find it interesting that we are witnessing a much publicized push for pay transparency at the same time that we are hearing increasingly passionate calls to do away with performance reviews and ratings.
Does anyone else see the irony here?
I have yet to encounter an organization whose leadership seeks to pursue a talent strategy involving identical investments in all employees regardless of how well they perform and regardless of the commitment they demonstrate to development and improvement in their roles. They want and expect differentiation. How does the organization get there without performance evaluation and ratings?
In his recent TLNT.com article Why High Performers Really Like Performance reviews, Dr. Steven Hunt reveals an inconvenient truth: They don't. As he says...
Companies that claim to be eliminating performance evaluations are usually just hiding the evaluation process from the employees.
From what I've observed while working with organizations who've gone "ratingless" and what I've read about those who've made news for taking the bold step of eliminating ratings, I think Dr. Hunt's assessment hits pretty close to the mark. These organization do not treat everyone the same. They do make differentiated investments across employees -- in base salary increases, in bonus awards, in development and promotional decisions, etc. -- which are based on somebody, somewhere making a summary judgment about the employee's performance and potential. It's just that those judgments happen outside the realm of a formal performance management process in a manner that is often discretionary and opaque -- and without the use of descriptive labels.
In other words and to summarize, many of us are pushing for transparency and clarity in pay decisions at the same time we are seeking to back-room the judgments used to inform those pay decisions.
How two-faced are we? Are we even seeing the incongruity?
In an earlier article, Performance Management: We Won't Fix the Problem by Ignoring It, Dr. Hunt calls our attention to the two essential tasks that have traditionally formed the core of performance management:
- Classification — Assessing employee performance to support decisions about where to invest scarce resources such as pay, promotions, or limited development opportunities (e.g. job assignments, expensive training courses).
- Development — Assessing employee performance to provide feedback and coaching that will increase employee engagement, performance and career growth.
Classification, of course, is the more difficult of these tasks because it forces us to deal with the reality that some employees perform at a higher level than others.
It is easy to understand the temptation to yank classification out of the process and focus exclusively on the more pleasant and affirming development element. To completely avoid the stressful, difficult and potentially emotional context of a classification conversation. Except that there is a fundamental dishonesty that happens when you make and act on tough judgments without ever clearly owning them or sharing them with the affected employees.
Transparency and clarity? Not so much. Courageous and bold? Not sure I see it that way.
Bottom line, conducting performance appraisals in an honest, transparent and -- yes -- appropriately humane manner is tough and uncomfortable. Really tough and uncomfortable. But I'll venture a prediction that it will be those organizations and leaders who step up to the plate and do the very difficult work of getting this right that ultimately succeed and prosper in the Age of Talent.
That's what I think. You?
Ann Bares is the Founder and Editor of the Compensation Café, Author of Compensation Force, Managing Partner of Altura Consulting Group LLC, and a proud co-author (along with Cafe cohorts Margaret and Dan) of the newly published book Everything You Do in Compensation is Communication. Ann serves as President of the Twin Cities Compensation Network (the most awesome local reward network on the planet) and is a member of the Advisory Board of the Compensation & Benefits Review. She earned her M.B.A. at Northwestern University’s Kellogg School, is a foodie and bookhound in her spare time. Follow her on Twitter at @annbares.
Image "Business Hide Confuse Emotion" courtesy of pakorn/FreeDigitalPhotos.net