“If it ain’t broke… but it is”
Performance reviews seem to have become completely ingrained in the processes and fabric of companies. Someday I’ll probably look up the starting point of the [tag]performance review[/tag] and find that it, like many other things, started out with a great purpose, good structure to begin with, and then somewhere along the way broke.
At least I think it’s broke and so do most people and managers I talk with.
Take this situation for example. (I really should change the names to protect the innocent, but I’m not sure who’s innocent here…)
I Want to Work Here
If you had a [tag]performance management[/tag] system that required a review in order to give an increase, don’t you think the reviews should be completed before the increase was given? (I would.)
If you had a system that suggested that people who received a low rating on the review shouldn’t receive an increase, don’t you think those people shouldn’t get an increase if their performance didn’t meet the standard? (I would.)
Not so the city of Denver.
The Denver Post recently reported almost one in five Denver city employees didn’t receive an evaluation, but still received a pay increase. Apparently the system requires that anyone who doesn’t get a timely review automatically be given a “successful” rating and a pay increase. (Sounds like a good deal to me as an employee if my manager doesn’t care about the reviews; I wonder if there is something about managers who don’t submit timely reviews not getting increases?…)
The reported issue is whether the people actually merited the increases or not, so was the city spending money on pay raises they didn’t need to.
I have another problem with this situation.
Is this the Denver I Know?
Think about the impact of these numbers:
- About 1,500 people did not receive an evaluation and did receive an increase
- 54 people received a “needs improvement rating” and (presumably) no increase
- 3,954 people received a “successful” rating and (based on the program description, presumably) did receive an increase
- 3,140 people received an “exceptional” rating and (likely) did receive an increase
What’s wrong with these numbers?
- 44% received the top rating
- 55% received the average rating
- 1% received the bottom rating
If you apply the same distribution to the 1,500 you add a “whopping” 11 more people to the group who wouldn’t have received a pay increase.
Twice as Many Stars in Denver
But here’s the real problem.
How many of your organizations have 44% [tag]top performers[/tag] and only 1% bottom performers. And not to be critical of those people who truly try their best to serve the public, but how many government agencies have you found where almost half of the people are “stars?”
Years of research has shown that the average organization has 15%-20% top performers – by virtue of their contribution, not rating – and a similar number of low performers. Can we believe this agency has twice that number of top performers?
The Real Money Issue
The real loss of dollars is not in the fact that people received a pay increase because they didn’t get a timely performance review. Rather, it is because the system is not accurately reflecting the performance of the people and the contributions they make to the organization. Isn’t that where the distinctions on pay should be made?
Workforce Expertise:
If you want a system that accurately measures and rewards people for the contributions they make, you need to be able to clearly define how a person adds value to their work. Many performance reviews are based on subjective measures which can always be manipulated, not objective metrics.
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