Management Process Less Controlling and More of a Partnership

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Over the past twenty years, most companies have been moving to a formal

performance review process that reflects the growing trend to create more

of a partnership between manager and employee, as the following comparison


Traditional Approach Partnering Approach

Manager-driven Employee-driven

Parent-child model Adult-to-adult model

An HR exercise Manager’s tool

Personality issues Result-focused

Vague objectives Specific objectives

Yearly event On-going discussions

Rank for pay Pay linked to goals

While more than half of all companies have no performance management

system at all,23 many of those that do still practice the traditional approach.

This may help to explain why almost 90 percent of managers who

do use performance appraisals do not believe they help to improve worker

performance! If a company is trying to become an employer of choice

based on creating a culture of reciprocal commitment, it is highly unlikely

it will achieve that status using an outdated performance appraisal process

that is based on anything other than an adult-to-adult relationship. Real

commitment comes from partnering agreements in which employees suggest

their own objectives and merge them with those of the manager, not

from the imposition of goals and objectives from above.

Most experts on performance management systems report that companies

achieve greatest overall satisfaction and effectiveness with systems that:

Use no performance ratings or summary judgments, as these have

been consistently found to increase defensiveness and reduce receptivity

to constructive performance planning.

Unlink performance discussions from salary discussions. Many companies

have eliminated the yearly performance discussion focused on

a ‘‘final’’ evaluation in favor of more frequent informal meetings.

This avoids the inevitable ‘‘gunny-sacking’’ of supervisor criticisms

over several months time until they are all dumped onto the employee

in a yearly meeting.

Further de-formalize the process by no longer requiring the employee’s

signature or placing the plan in a ‘‘personnel file.’’ Some companies

create more employee ownership of the process by allowing

employees to keep the performance plan in their own files and give

them the option of providing a copy to the supervisor.

Call for meetings between manager and employee at least once per

quarter and encourage frequent brief performance feedback-andcoaching


Emphasize mutual performance analysis over performance appraisal.

Give the employee the initiative in creating performance goals. Employee

is the active agent, not the passive object of a supervisor’s


Allow the employee to begin performance review discussions by

evaluating personal progress toward self-created objectives.

Train managers in a discussion process that is simple and memorable,

such as ‘‘Get-Give-Merge-Go’’ (start by getting employee’s perspective

on performance, then give your perspective, then merge mutual

perspectives into an agreement, then go forward with new objectives).

Train managers in helping employees set appropriate objectives that

are specific, measurable, achievable, realistic, and time-bound (S-MA-


Put the manager in the role of counselor and co-problem solver, not

judge. Managers do not coerce or manipulate employees to accept

organizational goals. The manager is responsible for assuring that the

employee’s objectives align with the objectives of the unit and organization.

Hold senior executives accountable for following the same performance

review and planning process as every other employee must do.

Have built-in measures of the system to assure that it remains effective,

with measures based on periodic quality and timing audits and

on surveys of employee opinions about the process.

Ditch elaborate and complicated ranking systems for determining salary

increases. Many companies have managers use simple categories

such as A-players, B-players, and C-players, or ‘‘walking on water,’’

‘‘swimming,’’ and ‘‘drowning,’’ as initial groups, then provide raises

based on subjective judgments of overall value to the organization.

Engagement Practice _ 21: Terminate Nonperformers

When Best Efforts to Coach or Reassign Don’t Pay Off

It may seem contradictory to recommend a practice devoted to the termination

of poor performance after having recommended another practice

encouraging the commitment to correcting poor performance. However,

I do believe these two practices must coexist in employers of choice. Despite

your best efforts to coach non-performers or change the nature of

their job assignments, there will be times when it is simply best to let the

employee go. The problem is that, all too often, other valued employees

know when that time has come long before the manager does, and the

manager’s failure to act can adversely impact their commitment.

As one business columnist described the situation, ‘‘We’re in the middle

of a vast wave of nonfiring. . . . The damage to millions of lives, and

the economy, is beyond calculating. . . . Keeping poor performers means

that development opportunities for promising employees get blocked, so

those subordinates don’t get developed, productivity and morale fall, good

performers leave the company, the company attracts fewer A players, and

the whole miserable cycle keeps turning.’’24

This is a theme that appears in all the employee survey results I have

seen—good performers consistently complain that underperforming employees

are tolerated, even promoted and rewarded with raises, while they

themselves are overworked or ignored. When McKinsey asked thousands

of employees how they would feel if their employees got rid of underperformers,

59 percent strongly agreed with the option ‘‘delighted’’—yet only

7 percent believed their companies were doing it.25

Jack Welch expressed his feelings on the matter quite clearly in a letter

to GE’s shareholders, customers, and employees before leaving his post as

CEO, saying ‘‘Not removing the bottom 10 percent . . . is not only a

management failure, but false kindness as well.’’26 This stance opens a

highly controversial door—whether to eliminate the bottom 10 percent

each year. Some believe this helps to continually upgrade the organization’s

talent level, while many others believe the ‘‘rank and yank’’ approach

eventually leads to the termination of competent employees who just happen

to fall into the bottom 10 percent of highly performing teams, and can

also result in litigation. Conversely, a mediocre employee in a struggling

unit may come out looking great. To mitigate this concern, some companies

reduce the percentage of employees to be weeded out in successive

years, as in 10 percent the first year, 5 percent the second and third years.

Many proponents of forced ranking systems believe they force managers

to be honest with their employees about how they are doing. Others

argue that forced rankings can become a crutch for poor management,

making the case that good managers should have the ability to make difficult

decisions without having a system force it on them.

No matter where one stands on this issue, there is considerably less

doubt about the need to step up and make tough decisions to cut nonperforming

employees when all else has failed. Most managers would probably

agree with Welch’s point about ‘‘false kindness.’’ As Debra Dunn, senior

executive at Hewlett-Packard, put it, ‘‘There is no greater disrespect you

can do to a person than to let them hang out in a job where they are not

respected by their peers, not viewed as successful, and probably losing their

self-esteem. To do that under the guise of respect for people is, to me,