Jack Welch’s Approach to Appraisals


I like Jack Welch’s (the very successful, former CEO of General Electric) approach to performance appraisals.

Manager presents to the employee a handwritten sheet of paper.  The left column lists the manager’s view of employee’s achievements.  The right column contains items the employee could do better.  Both lists focus on performance metrics and team behaviors.

Manager and employee engage in a meaningful conversation.  Manager gives examples, “Your error rate is less than .03 percent, almost a ten percent improvement over last period.” “I like that you went out of your way to help our new engineer learn our software tool.”

Sum up by reporting, “Shelly, you are in the top twenty percent of our employees, and I’ll recommend a good pay increase.” Or, “Jackson, your overall performance puts you in the solid seventy percent of our team and your raise will reflect that.  I would like to see improvement in meeting deadlines and reducing errors.  I’ll help you with those.

Or, “Alford, I’m disappointed that, after considerable training, your response time is still the slowest in our group.  Let me help you find another position that is a better fit.”

Conduct these interviews at least twice a year and allow about thirty minutes for each session.

Managers Should Not Discuss Salary During Appraisals


(Part 4 of 5 on Employee Pay)

“I think annual merit pay increases should be tied to employees’ productivity,” stated a manager.

“I agree,” I responded.

“I also think,” the manager continued, “that appraisal interviews should focus on employee development.  But it seems that during my appraisal interviews, all employees want to talk about is the amount of their raises.”

While many organizations consider both performance appraisals and salary reviews on an annual basis, they should not be combined.  Pay raises, or lack thereof, communicate strong messages to employees.  Salary discussions during appraisal interviews bury attempts of meaningful employee development conversations.

Consider appraisals and salary reviews to be related but separate.  I like quarterly appraisals where managers discuss where employees have performed well and what they might improve upon.  The appraisal at the end of quarter four builds on feedback given and received during the first three appraisals.

Approximately two weeks after the fourth appraisal, managers can report annual merit increases individually to employees.  There is no need to mention appraisal information when communicating pay increases.  Employees are very insightful.  If managers have been candid during appraisal interviews, employees will connect the dots between productivity and salary.

 

The Five Toughest Personnel Decisions


Part 1 of 5

A manager said to me, “I’m concerned about Jacob.  He has really struggled during the last few months.”

“How long has Jacob been with you?” I asked.

“Almost fifteen years.”

“What is Jacob’s performance history?”

“He’s been a pretty good performer, not great but reliable.  The volume in Jacob’s job has increased dramatically and we have become very dependent on technology.”

“Have you trained Jacob sufficiently?”

“Yes, we’ve offered extensive training.  In reality, the job has probably outgrown Jacob’s abilities.”

“Do you have other tasks that you could assign to Jacob?”

“Not really.  We are fully staffed and I’ve shifted tasks as much as I can.”

When a job outgrows an employee’s abilities, I think the company should try to reassign the employee to other tasks.  However, as in this example, reassignment is not always practical.

Another option is to continue coaching and training and hope to get the employee up to speed.  However, this usually does not work.

As tough as it sounds, the better option for both the organization and the employee is to compassionately remove the person from the organization and assist him/her in finding a better fit with another company.

 

How Appraisal Policies May Put Managers in a No-Win Situation


A very successful, but frustrated, manager reported to me, “During annual performance appraisals, we must have an improvement plan for low ratings.”   The manager further explained that he rated two employees low on the “quantity of work” scale.

“Did you develop a plan?” I asked.

“Yes, both had good attitudes.  I spent a lot of time with them and they did improve.”  The manager admitted the employees did not blossom into stars and probably never would.  Still, on the next appraisal, they earned “meets expectations.”

“Then what is your frustration?” I asked.

“When I submitted my appraisals, my manager said that my ratings were too high.  He said I needed at least some ratings that were “below expectations.”

“I think I see the cause of your frustration,” I responded.  “You are required to improve employees’ performances and, at the same time, your manager expects you to report lower ratings.  This seems like a no win situation.”

“That’s my point, exactly!”

Performance appraisal ratings create more frustration than a ref’s bad call you your star player in the final seconds of a game.  Why don’t we just do away with ratings?  Replace them with a brief listing of an employee’s achievements and areas of emphasis for the future.

 

My Top Ten Idiotic, Motivation-Killing Statements


businessman rating

Here are my top ten idiotic, motivation-killing statements.

If I gave you a “five,” you wouldn’t have anything to strive for.

You haven’t been here long enough to get a “five.”

I don’t give “five’s.”

HR requires that I write a justification if I give you a “five.”

Our policy discourages high ratings.

If I gave you a high merit increase, you would think you had it made.

Never let them know you are satisfied with their work.

Others might be envious if I gave you a big increase.

Yes, you did a good job, but this was a team success.

I know your attendance is perfect but we can always do better.

Effective leaders delight in awarding their best producers with high appraisals and merit increases.  The result is:  high producers strive even harder.

While lesser performers may publicly whine and whimper about their modest increases, they will learn that to get more they have to produce more.

Withholding rewards from high performers based on fear of losing commitment or upsetting slackers makes about as much sense as the late Yogi Berra saying, “No one goes there nowadays; it’s too crowded.”