In a prior life, many moons ago, I experienced different programs when it came to employee reviews and evaluations. Some were formalized, and others happened only when you had enough guts to ask your boss for a raise. Two companies that I worked for had programs which stood out in my mind as great. They were tools that could not only evaluate the employee but also evaluate the company’s human assets.
Let’s look first at the “No guts, no glory” system, or gathering courage to ask for a raise. While some employers may feel giving regular subjective evaluations and, if pleased, a raise is giving money away, the risks can outweigh the savings. Some employees have no problem waltzing through the boss’s door and asking for a raise. They have done their homework and can articulate reasons why they warrant more. If the boss is in a good mood, the raise may happen. If not, chalk it up to bad timing. For those who have a hard time asking for a raise, anxiety and resentment can grow when they feel slighted. When someone is working hard, but not getting recognition in the form of a raise or promotion, they may stop working hard or look for another job. Some people find it easier to change jobs than ask for a raise.
Pepsico Building Systems Division and Williams Scotsman are two companies I thought had good systems. Both employed a standardized review program, called Standards of Performance that set, measured, and evaluated performance based on expectations that both the employer and employee agreed to the previous year. What made them work was that every supervisor had to review every one of their direct reports annually and make recommendations to their boss based on the results. In addition, people were reviewed based on the prior year’s Standards of Performance and then set the ensuing year’s Standards of Performance based on attaining a realistically higher level of performance. If they accomplished the level spelled out in the standard, their job was considered acceptable and they usually got a cost of living increase. If they achieved more, they excelled and could receive a more substantial raise. If they failed to meet the standard, they were usually subject to a performance improvement program, intended to show them how to meet the standard. Bottom line, everyone knew what was expected, who was responsible to review them, and what they would be measured against, their Standards of Performance.
What makes using Standards of Performance work is that the goals are realistic and define what the company expects if the employee does their job. Not some pie in the sky goals they should attain that are above and beyond normal, but what is acceptable performance. The employee has a chance to review and accept or question their standards for the next year. That “Buy In” from both employee and employer gives a basis to measure performance throughout the year and to discuss any shortfalls, the reasons and solutions to regain their footing and be on tract for an acceptable year.
I am not saying that you can’t set exceptional goals that are somewhat over the top, but not all people are overachievers. If you have an acceptable level of performance set out in their standards of performance, you have both a tool to measure by, and to discipline if needed. It also gives the employee a clear understanding of what is expected. Always setting goals that force people to reach too high can set them up to fail or feel inadequate, even at a basically acceptable level.
Next Month:
How do you define Standards of Performance?