performance anxiety

How will it go? Will all my hard work be appreciated? Was all that extra stuff I did noticed and appreciated? Was I better than the rest? How often might you ask yourself these questions in life ;-) ? How often might you ask yourself these questions at work? Many of us face these questions at least once a year, during our annual reviews.

There's a fantastic conversation between Gillian (an HR professional) and J.R. about employee performance management, what works, what doesn't and whether it makes a genuine difference to both the employee and the organization. It began with an assertion on my part that when organizations grow, they begin to hire people whose abilities and intent only create micro-outcomes. In and of themselves, these micro efforts might achieve (or indeed exceed) their individual objectives, but there's no assurance that they aggregate up to something meaningful for the business as a whole. Sometimes (perhaps too often) they can even detract from the mission. The micro-performers exist because there is supposedly a role for them to play in a big company. Convention dictates that one must have a lot of microbes (sorry) buzzing around doing all sorts of micro-work; it emerges when an organization gets to a certain size and starts believing that it needs microbes because it is now "big" and must have girth (only they call it "gravitas").

About four months ago, I suggested that there was a way for an organization to avoid girth/gravitas and reduce its microbe quotient by focusing on being great vs. growing bigger. But I conveniently ignored performance and compensation. This is of course the subject of many organizational behavior PhDs and I don't presume to know anything, so here goes :-).

Harvard Business Review recently talked about The 10 Most Common Failures of Bad Leaders - see adjacent table. First, wow! Who hired these rubes? Second, not sure about you, but it looks pretty consistent with the failings of non-leaders doesn't it? But since these are "leaders" the failings are even more severe, and in need of more urgent remediation (vs. the peons). So my first take is that this is a really big and hairy problem - it's not simple, it's not clear what the answers are, and it's also more likely that your management is fumbling and bumbling with this. First implication - scary!!  Second and more critical implication: it sucks to be you...

Performance management in smaller companies is simpler - "if the company does well, we all do well (and vice-versa)." It can also be easier to identify the strongest (and weakest) performers and do the right thing.

Some argue that compensating sales people must be done on a short-term revenue basis. I suppose that's true, but it really depends on the business. If there is value to be had from maintaining a customer relationship over time (not always the case) and creating a long term revenue stream for your company, then here's a way to reward those that do best by you and your customers over the long term. But what about the rest of the organization? How do we reconcile team output with individual recognition? Herein lies the apparent rub...

Some of the challenges include employee morale and output; recruiting ability; rewarding your best people and remediating (or culling) your worst; and recognizing that you need both leaders and workers and that both are critical to success.

Scary as this is for me, what about the model the US Armed Forces use? Their total compensation plan is completely laid out, transparent, and visible to everyone. You know exactly where you stand and what you can hope to accomplish either by level growth or tenure. There is also clarity about what you need to do to move from level to level, and the decision to stay at a given level because you happen to like what you do doesn't seem to have as big a stigma as it does in the private sector.

Now what if you combined this clarity with a bonus matrix based on percentage of salary by level (but not by tenure) that is tied to a published company-wide goal of performance. (Example - 20% of our year-over-year revenue growth will be allocated to bonuses" - we will all benefit from our mutual success - we're a team.) And what if there was no individual recognition model (other than promotion) whatsoever? The implication - those people that need individual recognition, and must be anointed with "superstar" status will leave because "they've outgrown you." Hmmm... is that so bad? How often is true and lasting value created by these people? How often do they end up compromising team chemistry?

Would you want to work for a company that was only measured on how the team did? It works for smaller organizations (which common wisdom says are the most efficient and effective and resilient part of our economy) - doesn't it?

I would.