The Other Side of the Coin--A New Look at Performance Management

Same merit budget as last year. Same increase guidelines, too, no doubt. Lest we find ourselves pulling out the materials from last year and changing the dates, here's a couple of thoughts to help you keep the process mindful.

Superstars own the best increases. We have evidence that they know what they're doing. They can innovate. They think obstacles are fun. They hit deadlines.

But what about the next tier down? Why are they still not doing much better than baseline? Do we have any insight into that?

Just think about what that insight could mean. If you knew the "meets expectations" majority didn't have the skills, the experience or enough knowledge of your business to improve at their jobs -- if you had that focus, you'd have a specific problem that you could solve and measure the results. In terms of performance management, you could really "manage" rather than just labeling the employees and paying them a "no pain, no gain" 2% increase. And, if you could get to the heart of the performance issues and succeed, imagine what it would do for your company's results.

The first step is easy. Just add some data gathering to the performance management process you already have. A couple of questions for the manager, a couple of questions for the employee, would give you more insight than you have now. Once you have issues to target -- skills development, experience and so on -- give managers some options and give employees motives for improvement.

Because of the consistent use of a 3% budget over the past few years, you can see trends in individual performance in a more straightforward way than you may have been able to in the past. If your company is truly serious about performance management, instead of spending all your time on spoiling the superstars, analyze how employees who have been inching along with 2% increases can improve and introduce intervention. Your investment of time and money will deliver results, which beats walking away and blindly starting the performance management process all over again.

Heads = Status quo. Tails = Innovation and ROI. Which side do you want to call for 2016 performance results?

PS: I'd love to give recognition to the blogger who got me thinking about this, but I can't remember that far back. You know who you are -- thanks!

Putting together a project plan with communications as the last step? Think again -- and find out why! Get yourself a copy of  Everything You Do (in Compensation) Is Communication @ www.everythingiscommunication.com, the convenient website where you can download our popular eBook. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal at Towers Watson.