The Daily Item, Sunbury, PA

Business

November 19, 2013

Your Office Coach: Seething at 'pay for performance’

QUESTION: I am appalled by the “pay for performance“ system recently implemented by my company, which has more than 10,000 employees. Forced rankings are used to assign performance review scores, so 60 percent of the staff must now be rated as “meets expectations.“ Only 10 percent are allowed to receive the highest rating of “outstanding.“

To place people in rating categories, each department holds a meeting in which the managers discuss their employees’ performance. Names are moved around until every category is filled. Even if there are many outstanding staff members, only 10 percent can get the top score.

I feel sure that all the managers will lobby for their own employees, so those of us who work for less persuasive or influential people are likely to lose out. What do you think about this approach?

ANSWER: Since most people agree that greater contributions merit greater rewards, “pay for performance“ makes perfect sense conceptually. The problem is that virtually everyone believes they are “above average,“ so lower ratings often trigger lengthy debates. To avoid these unpleasant arguments, many managers, left to their own devices, simply give higher ratings to everybody.

Forced rankings represent a logical attempt to require managers to differentiate among levels of performance. But while these standardized distributions work well across large populations, like your 10,000-employee company, they are completely invalid with small groups, such as a 10-person team. Trying to manage this contradiction can drive human resources people crazy.

Your company’s group ranking approach spreads the performance distribution across entire departments instead of applying it to each individual unit, which is a reasonable strategy for increasing validity. But, as you point out, assigning ratings through open discussion can easily create a “squeaky wheel“ bias.

If your boss seems to be a predictably feeble advocate, consider sharing this concern with your human resources manager. That may help to balance the scales, since the HR department is almost always involved in establishing final rankings. While your company’s new system certainly has both pros and cons, the same is unfortunately true of every other appraisal method.

Text Only
Business
  • A checklist for keeping you focused at work

    A quick check of Facebook and next thing you know, a half-hour’s passed. Start chatting with a co-worker and suddenly 20 minutes is gone and the report you were supposed to finish by lunch is late.

     

    July 31, 2014

  • Fancy management systems won’t fix bad managers

    In violation of my long-standing “only watch TV” rule, I read an article recently about how Zappos is adopting a management structure known as holacracy.

    July 30, 2014

  • Your Office Coach: Supervisor-employee boundaries must be honored

    QUESTION: Two weeks ago, my husband “Barry“ unexpectedly came home from work with a large flat-screen television. He explained that one of his employees gave it to him as repayment for a loan. I was shocked, because I had no idea that Barry was lending people money.

    July 29, 2014

  • Silly mistakes that sink job applicants

    Some employers won’t care - or won’t catch them - but mistakes in word usage can put your application in the reject pile.

    July 29, 2014

  • Watercooler: Raised to the roof

    Q: Over 15 years, I have worked my way up the corporate ladder with the same organization. I have been given a raise every year and excellent reviews, as well as several promotions.

    July 25, 2014

  • Career Coach Q&A: job search follow-up; introverts as leaders

    Starting a business:

    Q: I have a stable job that I don't hate, but I have an idea for starting my own business.

    July 25, 2014

  • How to become a leader

    QUESTION: I’ve just been promoted into a leadership role. I’m excited, but also kind of overwhelmed. What do I need to do to be good at my new job?

    July 24, 2014

  • Balancing Act: How much is your time worth? Consider outsourcing some tasks

    Todd Paton has a booming business getting customers noticed on the Web. One tool he uses is generating online press releases to build brand awareness and create links that will send traffic to a customer’s website. But Paton, owner of Paton Internet Marketing, acknowledges that writing the releases is not his strong suit. Rather than spend his time doing it, he hires out the task.

    July 23, 2014

  • The Color of Money: No easy way to get out of debt

    Many people who are deeply in debt are desperate for a quick fix. They ask the question: What can I do to get out of debt?

    July 21, 2014

  • Watercooler: When to speak up if you see problems down the line

    Q: Our organization has hired a new director. I am one of a number of division heads; above us, there's the associate director, and above him is the director. The associate director is feared and disliked for his duplicity and dictatorial nature, though few have come forward because of his vindictiveness.

    July 18, 2014

Business Video
Stocks