Have you ever felt like an outsider in a conversation, when it seemed as if the others in your circle spoke in what seemed  a different language – one that left you struggling to keep up?  They may have been using English words, but the phrases, acronyms and technical references peppered throughout the back-and-forth left you floundering.

What are they talking about?  Not wishing to appear foolish, you likely react by tuning them off and simply standing there as a silent listener – or walking off.

Examples of this experience abound.  The circle could be doctors, lawyers, bankers, IT professionals – almost any specialty or interest group that has devised its own short-cut proprietary language.  For example,  if you sat with a group of bankers for more than 15 minutes, see if you aren’t befuddled and “zoning out,” or checking your watch for an early exit.

Now flip the coin.  What if you were one of those from the “inner circle,” someone already comfortable with the specialized jargon, and you were trying to explain an important point to someone not native to your group?  If you’re not careful, while the manner in which you communicate might have the others in your circle nodding their heads in understanding, the object of your discourse could simply stare back at you with a blank look – not following along at all.

If your intent is to reach out to someone, to have them understand what you’re saying, you need to speak the same language.  And that language should be that which is understood by the listener, not the speaker.  Such a concept of effective communications is the root cause of how the message so often goes awry when managers talk to employees.

When I lived in England my British colleagues would often say, “we speak the same language, yet still don’t understand each other.”

Talking isn’t communicating

Perhaps that’s a radical thought, but if your audience doesn’t understand you, then in effect you’re talking to yourself – to an audience of one.  Your message will bounce, not resonate.  But most of us have a default button when it comes to communicating; we automatically talk or write the way we think, the way we are accustomed to conversing within our niche group.  We use the same specialized terms, acronyms and short cut phrases of the group-think.  Have you ever listened to a group of doctors?  For compensation practitioners the sample list of terms could include median, compa-ratio, present value, percentiles, STI, red circles and any of a host of technical terms or “inside” phraseology.

We should remember though, that we’re talking to a potentially uninformed audience whom we need to connect with.  Even if the meanings of our terms are understood, the why they are important can be lost amidst generic corporate-speak language of such throwaway phrases like employee engagement, shareholder value, mission statements and earnings-per-share analysis.  When you’re huffing and puffing about  rewards your employees can easily and quickly become cynical.  Doesn’t everyone think that the company is out to save money at the employees’ expense?

So what happens to your audience when they don’t understand you?

• They stop listening.  That comes first; the glazed look, the befuddled grasp at understanding, and then finally the tune off.  They start checking their emails, watching the clock or simply staring off into space.

• They revert to preconceived notions.  Because they haven’t heard you, in terms of comprehension, they’ll likely not change their behavior or their practices.  They’ll carry on as usual, regardless of your message – because whatever you said simply bounced off without impact.

• They start to mistrust the messenger.  Perhaps the most damaging reaction of all is that your audience can become antagonized by your efforts.  They can feel that they’re being spoken down to, treated by management as poor cousins, and in general become skeptical of the message that you’re trying to sell.

All of which damages the credibility of the message as it becomes lost amidst the distraction over how that message was conveyed.

If your audience doesn’t understand what you’re trying to tell them they aren’t going to respond in the manner you intended.

What are you trying to achieve?

When preparing to deliver a speech the common advice one is usually given is to tailor how the message is delivered in order to suit the audience. That’s how you keep them engaged, never mind dosing off, tuning off or watching the clock while you’re talking to yourself.

If your audience doesn’t understand your message, or if it doesn’t have credibility, you really haven’t communicated – no matter how much effort you’ve put into it.  It’s like sending out a memo that no one reads.

The more technical the topic, or controversial, or even boring the more important it becomes to find a way to reach a connection with those you hope to educate, persuade or simply inform.

How can you test that your message was received and understood?  Have you asked anyone to repeat what you said?  To show that they “got it”?  Try it some time.  You can also test the message with an informal focus group of employees who are outside your specialty circle.

And don’t talk at your employees but to them.  Dumb down the language to common terms if you have to; use pictures, stick figures or colorful designs to illustrate examples and key learning points.  Be a little bit creative, as you have to do whatever it takes to make sure that your audience understands what you are trying to tell them.  Otherwise you’re wasting your time.

Otherwise your employees will feel like outsiders in their own organization.

Have you ever used a babysitter?  This is when you have someone else assume your responsibilities while you take a break and focus on something else.  The babysitter stands in for you, becomes you during the period of your absence.  Someone else does your job.

Typically we think of babysitting when there’s actually a dependent child involved, but it’s not uncommon for ineffective managers in the workplace to use the same concept when dealing with their employees.  These managers seek to use the pay that their employees receive as a surrogate for leadership – for keeping those workers complacent, retained and generally “in line.”

The practice of manipulating rewards presumes that the employee will chase the money and will be happy with their lot, while at the same time not requiring much in the way of supervision, periodic direction or even meaningful conversation.  The thinking here is that, if provided with enough rewards, an employee will act as desired in order to not jeopardize those rewards.  The goal is to place the employee’s attitude and performance on automatic pilot while the manager is engaged elsewhere.

So far, so good.  Not necessarily a problem, right?  The red flag goes up when you ask whether these monies are warranted by either performance or business need, or are they simply bribes?

What are we talking about?

Scenarios where pay is used in lieu of actual management are easy to spot.

• The Grand Giveaway:  Where managers try to give away as much money as they can to as many as possible, not worrying overmuch with distinctions between individual performances.  The goal here is to build an employee’s appreciation of their manager’s largesse.

• Title inflation: The promise of bloated and meaningless titles that distort organizational structures, for the prime purpose of rewarding employees in lieu of cash.

• Over-rated performance:  Play the good guy by over-rating performance during salary reviews.  Culprits are often seen rewarding activity over results.  So look busy!

• Assured compensation: Take the risk out of rewards.  Everybody receives an annual merit raise, everyone earns a bonus.  This fosters an attitude of entitlement.

• Counter-offers: “Let’s make a deal” attitude to keep resigning employees from actually leaving; a dangerous practice that increases costs and lowers morale.

What’s the cause of this behavior?   Managers typically receive inadequate training (if any) on how to use their company’s pay programs, so many use pay as a crutch instead.  Spending the company’s money effectively and efficiently isn’t on the radar screen.  They use employee pay like a club to get an employee’s attention.  And once they have that attention the manager is off doing something else – with the presumption that pay will substitute as supervision and motivation while the manager is absent – kind of like a babysitter.

Weak and ineffectual managers don’t actually manage their employees when it comes to things like performance direction, leadership, setting good examples and decision-making.  Instead, they want to be liked.  They want to avoid conflict and they don’t want anyone to quit.  They want employees to get along, and to help foster a friendly team atmosphere they try to manipulate pay in support of their efforts.

It’s really kind of a bribe.

So what is “managing” to these people?  It’s not about making hard decisions.  Too often it’s trying to get the most for their employees, deserved or otherwise, whether the organization gains in the process or not.  The manager is focused on their own interests, and is using someone else’s money in the doing.

Why it doesn’t work

Relying on pay as a replacement for management has a short term effective life cycle, at best.

• Employees see arbitrary equal pay treatment as de-motivating to high performers.  Why bother extending yourself if you’re going to receive the same reward as the guy doing crossword puzzles?

• Employees resent favored-son treatment; the names of those who benefit for non-performance reasons will always become known.  There goes your morale.

• No amount of money replaces the value of honest performance direction and feedback.  Those with an interest in learning and growing appreciate the help.

• Absentee managers lose the respect of their employees, who know what’s going on.  Remember that employees leave managers, not companies.

• While employees will take any money carelessly handed out, the organization will not gain because of it.  So these “rewards” are ultimately wasted.

For managers who need a crutch to help motivate and retain their employees, to help them do their jobs, the above cautions likely won’t make a difference.  Their goal is not to manage, but to get-by, to be liked by their employees and to avoid disruptions to their routine.  This is not leadership.

But for those managers who wish to make a difference, who understand that managing employees is a challenging and rewarding role, abrogating responsibility through babysitting is not an option.  They recognize it as the opposite of management, a damaging practice that will not enhance anyone’s long-term career prospects.

When it comes to the design of performance management programs and processes most companies play it safe.  Right smack in the middle of their employee assessment scale is the word “average”; or perhaps they use “meets expectations,” or “solid performer” or something similar.  Each term holds a similar meaning, though – middle of the road.  And isn’t that where managers expect most employee to fall?  After all, the height of a distribution curve peaks at “average.”

Surveys show that over 80% of organizations who use a rating scale to assess employee performance have chosen a three, or five (most popular) or seven scale system.  The common denominator of each system is a middle rating category, the average.

But what if you were one of those odd ducks who chose not to have an “average” rating in your performance review process?  What if you told your managers that they couldn’t call anyone “average;” that there would be no middle ground; that employees would have to be designated as either “successful” or . . . less than successful?

We can’t do that!

Which is exactly what you’ll hear.  Many managers will balk at having to choose between rating someone as either what they consider an under performer, or as an over performer.  That’s the way they’ll see the decision-making process – as forcing them to select what is for them an incorrect rating.  Because they think the majority of employee performance falls between those ratings.  Because they think most folks are average.  They’re doing the job that they were hired to perform.  And “average” is a safe word.

But there are some companies out there who have decided that they want their performance review process to be a less than a passive administrative tool (looking backward).  They want to couple development dialogue into the assessment process and encourage employees to stretch themselves – to look forward.  They want to improve the performance culture in their organization, and they feel that in order to achieve that goal they need to better identify exactly what level of desired performance their employees have been delivering.  Which means that they take away the middle ground.

I’m not here to say that managers are always wrong in their overall perception of employee performance, but perhaps there’s a different way to look at the rating process, a less “easy button” approach that doesn’t provide a default selection for the manager.  Perhaps there’s a method that might help drive employee performance – instead of administering it.

What if the performance review process asked a different question?  Instead of asking how an employee’s performance compared against  a common-man average, what if the question became whether the employee was “successful” in their job?

Successful

Now here’s a word that implies achievement, the gaining of favorable results.  Compare that against what the dictionary would describe as common, ordinary, typical – the average.  An argument can be made that an “average” employee is not necessarily a successful one, and that a successful employee is a better performer than an average one.  For the good of your business I’d suggest that you’d want to encourage more successful employees than average ones.

A common management view of “average” employees is that “we’re not going to get where we want to go with this group.”  The desired goal of a high performing organization will not be achieved on a foundation of common, ordinary and typical employees.

Needs Improvement

What if, instead of saying an employee’s performance was below average (a rating usually seen as just below the middle ground) you turned things more positive, saying that the employee was “on track” but not quite yet successful?  This can be a different, much less negative perspective.  If you want your performance review process to help drive performance, then encouraging employees (“you’re almost there, keep it up“) is a better strategy than negativism.  And if you believe that performance recognized is performance repeated, then you want to make sure that you focus on a glass that’s half-full, not half-empty.

Those who take a risk

Choosing to design a performance review process without designating a middle rating for your performance scale is taking a risk, which is no doubt why most companies steer clear.

• Too many employees could be ranked as “successful,” merely to avoid the negative connotation of “needs improvement.”

• Over-rated employees would be given (or at least they would hear) the wrong message, inflating their perception of performance without delivering the same caliber to the organization.

• The bottom two (of four) rating categories would see little use as “Needs Improvement” retains its strong negative connotation.

• The organization wouldn’t have sufficient merit increase monies to appropriately reward the great majority of employees rated “successful”  – thus leaving little room (or motivation) for lower ratings.

Such a scenario, if left unchecked, could weaken your performance review process to the point of being ineffective – almost pointless.  Those rated less than “successful” would likely fall below 10% – 20% of your workforce – which for most organizations is not a true reflection of current performance.

In that all-too-common scenario many of the ratings might even become reluctant “gifts” meant not so much to recognize performance but rather used by the manager to avoid having to face uncomfortable conversations with disappointed employees.

This is where management training, coupled with a careful and continuous monitoring of the performance review process, would be key to success.  When you don’t provide a default “easy button” you need to make sure that the decision-makers not only understand the rationale of the four-scale rating system, but are on board with it.

One doesn’t create a new HR program and launch it via a few memos and a deck of slides and then expect compliance and success.  Not if you want managers to think and act differently today than they did yesterday.

So kudos to those with a four scale performance rating system.  They’re trying to walk the talk of performance management and pay-for-performance.  I wish them luck.

I used to think that, of all the compensation schemes out there, the most detailed, the most carefully crafted, the most committed to memory were for the sales force.  Like the stereotypical jail-house lawyer sales employees could detail to management the inner workings of their incentive plan – and often did.  Nothing got past them.

That may still be true in your organization, but with increasing frequency I’ve found myself immersed in a client’s troubled sales compensation programs, struggling to salvage the incentive schemes of companies whose reward train had plunged off the track.

Studies have shown that it’s often not the design but the communication of the sales comp design that is to blame.  Even quality programs find it difficult to overcome the damage that can be caused through errors in explanation.

Flubbing the message

Plan effectiveness is weakened when a company fails to properly inform their sales force as to what’s expected of them, and how they’ll be rewarded.

Here’s what should be included in every sales plan document.

• Show the money:  Highlight the target incentive figure and you’ll get their attention.  The more at risk the greater likelihood behavior will change.

• Clarity of objectives:  If you want to steer  performance, provide a sense of direction.  The sooner an employee knows what you want them to do, the sooner they’ll start to focus.

• Clarify thresholds and caps:  Two common questions are, at what point do payments start, and are they capped?

• Administration rules:  Not exciting but necessary to help employees understand the plan and how it works.

• How much, and for what?:  Show how payments progress as performance increases, whether using percentages, commission rates or a combination.

• Estimate earnings:  Examples drive the message that better performance delivers greater rewards.

• Limit key objectives:  Focus employee efforts to maximize performance.  Provide no more than four – with none weighted less than 10%.

• Appeal process:  Explain the method of handling payment calculation issues.  Questions are to be expected, but don’t make employees search for remedies.  Be upfront about how to deal with problems.

Your plan should be distributed before the start of the performance year.  Too many plans are still being “finalized” during the 1st quarter.

Directing Traffic

Left to their own devises some sales employees could drive the business off the cliff and into deep financial problems – if the pay is good.

The wrong kind of selling activity can also pump up revenue without a corresponding increase in margin. Generating revenue without profit is just being busy.

Failure to provide proper written communications  will gain you the following:

• Confusion:  What exactly am I expected to do?  How will I be rewarded?  These are questions you don’t want your employees to be asking.

• Dissatisfaction:  An employee unhappy with their incentive plan reduces their degree of enthusiasm and engagement.

• Unwanted activity:  Chasing sales that don’t maximize margins or don’t push new product / service lines.

• Unrealized expectations:  “But I thought my check would be for X“? or
  “I didn’t know you wanted me to focus on that.”

• Missed opportunities: if your marketing focus points in one direction while your sales force heads in another, the achievement of critical results (i.e., revenue, new customers, market share, profits, etc.) may be left in limbo.

If you know what’s considered “success” for the company, and you aim your rewards toward achieving those objectives, then you’ve created a win-win scenario for the employee and for the company.

Just make sure you tell the right folks.

There are some organizations out there where Human Resources and the Compensation Department maintain control over exactly how much is offered to a candidate for employment.  HR uses a company-specific formula to decide the exact amount that can be offered to a candidate.  Front line managers are not able to override those decisions.  Appeals are judged by the original decision-makers.

“You’re authorized to pay $14.25/hr, but you can’t offer $14.50.”

In these instances a company’s employment procedure mandates that someone in Human Resources (usually a compensation analyst) assesses the value of a candidate’s background via a formula, a matrix or even a dartboard (tongue-in-cheek) to determine the amount of money that the line manager would be authorized to offer.

This assessment counts periods of time from the resume that the candidate has demonstrated certain skills or acquired particular experiences.  These “scores” are inserted into a formula or other decision-making process that in turn spits out “the rate.”  Qualitative assessment of such skills and experiences may not be a factor, but if so is not made by the hiring manager.

It’s also likely that salaried candidates are handled in a similar fashion, as would be promotions.

The rationale

What’s the reasoning behind such strict control of pay decisions?  In most cases a tight leash on managers was established due to a lack of trust between the senior leadership and those who manage the employees on a day-to-day basis.  It’s the leadership view that:

• Managers can’t be trusted to spend the company’s money effectively or efficiently

• Managers tend to make emotional vs. business decisions, therefore increasing company costs

• Tight budget control is necessary to ensure that inappropriate decisions don’t overplay available funds.

Over time, such a restrictive environment will have negative repercussions – for the manager, the candidates and ultimately for the business itself.

• Managers aren’t allowed to manage pay for their employees.  They do what they’re told.  This is where the finger pointing starts.

• Decisions about the worth of a candidate are made by “bean counters,” outsiders, and not those better able to assess the impact of a candidate’s background and experience.

• Internal equity can become distorted as policy over principle restricts managers from taking corrective action to balance pay between employee experience / performance levels.

• Managers aren’t allowed to develop professionally when missing a key element of their responsibilities.  The next generation of leaders is not being prepared.

• Managers lose faith in Human Resources.  HR becomes an adversary.

Is this a good practice?

Those who set the pay rates for the line managers run the risk of developing a “God Complex,” where the finality of their decisions is taken for granted.  Managers have little option but to comply, even at the risk of creating additional difficulties with their staff.  Over time such control can be abused (“absolute power corrupts absolutely”) by those following by rote policies, formulae or simply what they believe is appropriate pay.

Line managers are left struggling to cope with these decisions, to explain inadequate offers to candidates, to suffer through internal equity distortions that leave their staff vulnerable to external poaching, or simply to have their better employees start looking elsewhere.

Allowing managers to manage, to let them have more flexibility in the pay decision process, can be a win-win for everyone.

• Managers: greater opportunity to manage their staff and the company reward programs.  Greater opportunity to grow and develop as leaders.

• Human Resources: allow practitioners to focus on key issues, not the minutiae of everyday decision-making.  Such flexibility would increase HR credibility as advisors, not gatekeepers.

Give line managers parameters to work within (i.e., no offers above midpoint or below salary range minimum, no more than an “X” percent gain for the candidate from their last employer, no sign-on awards without approvals, etc.).  That would provide a degree of standardization without stifling creativity or the organization’s ability to attract the right caliber of employees.

Being forced to gain approval for every offer, for depending on HR to decide what the offer should be, diminishes the credibility of the manager in everyone’s eyes.

That’s never a good thing.

Bob has just turned in his resignation, handing you a paper with a single line of text; he was leaving in two weeks.  Cripes!  Bob is one of your best team leads, and his departure will leave a hole in your department that will be hard to fill, especially in the short term.

Is there anything you can do?
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At this point the question of a counter offer will pop into every manager’s mind who has ever faced this dilemma.  Give Bob what he wants and he’ll stay – right?  Find out what’s been offered and promise the same.   Problem solved?

Not by a long shot.  It’s not that simple.

Bob may or may not decide to stay, but meanwhile other discontented employees will note your response, the relationship with Bob has already been damaged by his resignation, and any new “arrangement” might create internal equity trouble.  Productivity and morale could be impacted, no matter what happens to Bob.

Your solution might create even more problems for you.

What to do?  Let’s look at the implications of a counter-offer from both sides.

The Employee Perspective

If an employee has made the decision to leave, and subsequent actions have progressed to the point where an offer has been received, then mentally they have already left.  Any internal debate they might have had over making a change has already been resolved, and they are comfortable with their decision.  They may even be anxious to leave, as the new employer offers a fresh start, with new challenges, new faces, increased responsibilities and of course more money.

They may be enticed to stay by increasing their rewards package, but you can’t be certain.  Their true motivation may remain an unknown, leaving you to deal with only what they are willing to disclose.

If the key catalyst for resignation is not rewards (i.e., friction with the boss, perceived dead-end job, dated technology, long commute, too much travel, etc. etc.) a counter offer focused on more rewards will miss the mark.

The Employer Perspective

If you extend a counter-offer, it will become known and discussed.  Employees may get the idea that such is the way to get a better deal with the company – by threatening to quit.

Those who accept counter-offers often leave within 6 months anyway – that’s all the time you’ve bought for yourself, as other unresolved issues would remain sources of continued dissatisfaction.   More money will not solve those problems, and typically counter-offers address only the quick fix money issue.

Once an employee has resigned, even if later rescinded, their relationship with the company is forever altered.  It’s unlikely that the company will retain positive thoughts about the individual, even if the immediate manager still loves them.  Career prospects will have taken a body blow.

If you extend a counter-offer and it is rejected, the same internal damage will be felt as if it had been accepted – so you better be careful before extending yourself.   In any case, the employee is no longer considered loyal, and cannot be trusted to remain longer term.  They are considered “for sale.”

Could This Work For You?

If an employee tells you they are thinking of leaving, vs. actually having an offer in hand, then you have more room to maneuver.  But the company should examine how they deal with threats – because other employees will be watching.

However, if your world will end if Bob leaves, or you need to buy time until a replacement can be put in place or a project completed, you may wish to consider negotiations.

Caution:  line managers may advocate a counter-offer more because their lives are made difficult by an employee’s departure, rather than the business impact of the separation.

Doing It Anyway

If you are planning to make a counter-offer, prepare yourself in advance by:
•   Learning the nature of the offer you are competing against
•    Ensuring your period of vulnerability is minimized
•    Developing  a backup employee as soon as possible
•    Deflecting employee criticisms over favored treatment, dangerous precedents, etc.  Word will get out, so you should have a story ready that rationalizes your decision.  You don’t want to face a host of “what about me?” calls.

For those companies who may have a policy that allows managers to consider counter-offers, the approval process should be visible enough to ensure that the broader issues of business justification are discussed.  Personally affected line managers should not make the call.

A final caution: like a fine aged whiskey you should only sip at this practice and savor the mutual gain, not gulp it down and feel the burn.

It used to be a common view that the Human Resources department in large companies was more sophisticated, more professional, and more forward-thinking than what you would expect to find from HR in smaller companies.

We all presumed that the “big guys” knew what they were doing.

However the current pendulum of thought has begun to swing the other way.  Indeed, sophisticated has become cumbersome, professional has become bureaucratic and forward-thinking has created a chasm of credibility between philosophical concepts and the practical realities that managers deal with every day.

Remember the K-I-S-S principle (keep it simple, stupid)?  Many large organizations seem to have forgotten that common sense caution as they saddled their reward programs with ever more forms, procedures and bureaucracy.

The Evolution of Performance Appraisal

A good example of HR systems gone wild is the difference between a small company performance appraisal and the convoluted processes often followed by large companies.  Herein lies a stark contrast not only of styles but of methodologies and core beliefs that a more complex better way will increase the effectiveness of employee reward programs.

This growth of complexity is commonplace; by the time an organization achieves a certain population size HR feels compelled to complicate their processes – usually in the name of increased employee sensitivities and streamlined procedures.  What worked well before (when the business was smaller) is suddenly suspect, deemed somehow less effective, less desirable.

What began as direct cause and effect, performance followed by assessment = reward, suddenly became much more complex, more confusing to some, more aggravating to others.  Critical communications are often flawed and ineffective as both employees and managers question the additional complexity.

Let’s look at a comparative example, using the performance appraisal process.

The Small Company Experience:

• The employee’s performance is assessed against what is expected of them.

• Performance discussions usually take place on the anniversary of either employment or promotion.

• Forms are basic, even simple.  They may not be standardized, and one or two pages are usually enough.

• The process is brief.  Meetings tend to be short and focused, so both parties can get back to work.

• The approval chain is abbreviated; messages from the performance meeting are typically what actually happens.

• The money discussion (pay increase) is front and center, a cause-and-effect dialogue.  You have performed thus and so, and your salary will be changed from “x” to “y.”

How Large Companies Tend to Operate:

• The employee’s performance may be assessed against other employees as much as against what is expected of them (their job description).

• Performance discussions use a Focal Point strategy, where everybody is reviewed at the same time.  For managers with more than two or three subordinates, this represents a challenge in terms of time spent and quality of assessments.

• The forms used are intricate, multi-part, multi-page affairs designed by HR specialists.

• Employee performance as a group may be viewed against a desired bell-shaped curve of ratings.  Individual assessments may be modified to fit the expected / budgeted shape of the curve.

• The boss makes upward “recommendations,”  which may or may not be approved.  Thus the conversation with the employee ends on a “we’ll see” basis where money is concerned.

• Other topics like developing future performance, improvement strategies / action plans, and “where are we going?” discussions may predominate.  Sometimes talk of a pay is deferred, raising the question of whether performance actually relates to reward.   Meanwhile, the employee wants to hear about a raise.

So what has been lost as the organization grew larger?  Has it become more impersonal, forms-centric, process controlled, and standardized?  And is that better than before?  Perhaps more has been lost than gained.

How did the organization evolve into something potentially less helpful, less effective?  Perhaps the poking and prodding of systems and procedures in the name of improvement went too far, until they created a convoluted and twisted version of their desired state.

Perhaps we’ve let specialists over analyze the psychology of a boss rewarding a good performer.  We’ve exchanged hard decisions with real impact for a muted “everyone deserves something” approach.  The following scenario is common.

• Sub-function specialty groups are created within HR, be they Training, Management Development, Succession Planning or others popularized in prevailing industry jargon.  Each group has advocates that push an agenda of change.

• These specialty groups must justify their existence to validate the worth of their profession, and their mission.  The result is additional layers of forms, procedures and extra time constraints for managers to struggle with.

• Over time these experts lose sight of the managers they should be trying to help.  They don’t understand the beast they’re trying to tame.  By pressing their own agenda they tell management how to assess performance.

• Ultimately these groups become blockers, getting in the way of a smooth-running operation.  Objecting managers tend to respond with a campaign of passive resistance.

So can we make our large companies “feel” smaller when dealing with employees?  How do we reverse the model of increasing complexity and confusion?

When the state of affairs has gone off the tracks, how many times have you heard – or used the phrase, “let’s get back to basics?”

Perhaps that thought could be useful today, no matter what size organization you hail from.  Simply return to the fundamentals of performance management, where performance is assessed, and in turn leads to reward.

It doesn’t have to be any more complicated than that.

K-I-S-S

Do you remember this line from the movie “A Few Good Men?”   Jack Nicholson’s character was telling Tom Cruise’s character that average folk couldn’t deal with the harsher facts of life.  As a result higher ups would tell them what they wanted to hear.  They would offer excuses, verbal hedges that sidestepped reality and offered the illusion of comfort.

Today we remain stuck in the mire of a severe economic malaise, a situation that is causing enormous employment anxiety, deep concern for the future and perhaps more than a few sleepless nights.  As organizations ponder the question of whether employees can handle the true state of affairs (health and future prospects) they can choose to deal from either the top or the bottom of the deck with their internal communications.

The troubling issues raised could be pending layoffs, reduced or frozen pay increases, hiring freezes, reorganizations or other such “bad news.”

Management messaging can either be straightforward regarding current events – addressing the cause of problems and how economic circumstances would likely affect employees – or they could toss out a series of artful communication hedges (i.e. excuses).  In other words, employees could be fed “corporate-speak.”

Corporate Speak

By this I mean a headquarters-generated sleight-of-hand communications effort, typically prepared by smooth-tongued professional writers instead of subject matter experts.  The prose, approved by corporate legal to insure that no liability is stated or implied, minimizes the negative and accentuates the positive.  The intent is to say little of substance, while at the same time making a self-congratulatory production of their communication efforts.

Content in these communications is usually a combination of feel-good phraseology intended to instill a sense of confidence.   The target of the communications is expected to walk away feeling that, whatever the problem, management is a) doing the best they can, b) not at fault, c) continues to have the interests of the employees firmly in mind, and d) will be providing more details soon.

When these officious corporate pronouncements inevitably provide little in the way of satisfactory answers, most employees turn to their direct managers in an effort to obtain straight information.  However, when the going gets rough (challenging, complex, contentious), many managers will waffle, dribble their thoughts, obfuscate and start to make their own excuses.  They may even point a finger in the direction of Human Resources.  Poorly prepared managers have difficulty facing issues important to employees without trying to pass the buck.  Employees want to know the why, the what next and what about me?, but managers are rarely equipped to offer an effective response.

So when the straight story is not forthcoming, employees will tend to read between the lines and form their own perceptions of the company message, and that perception is less reliable than the grapevine for spreading accurate information.  It is also more skeptical.

What employees “hear” can usually be generalized by the following attitudes:

• “Where are they going to go?”: Employees are trapped in their jobs and have little choice but to remain, because other jobs will be hard to find.  Management has implied, “We don’t need to do anything for them.”

• “Everyone else is cutting back, so we have to as well”: This trite phrase only gets dragged out when the circumstances being described save the company money.  Has the “everyone else” phrase ever been used to support giving something to employees?

• “In anticipation of difficult economic times ahead we are forced to / reluctantly / have no choice but . . . “: This is a pre-emptive strike while the sun is still shining.  It’s a particularly onerous practice if rewards for past performance are cut, and is often viewed by those on the receiving end as a breach of trust.

• “We employ average workers, so they should be satisfied . . .”: Perhaps an after-the-fact rationalization, but sometimes your senior leadership feels that most employees can easily be replaced, like a commodity.

Not surprising, the reaction to such doomsday communication efforts is always negative, planting seeds in your workforce for a bitter harvest of lowered morale and increasing disengagement.

• The ineffective message lacks credibility with an increasingly skeptical audience, as does the messenger and the organization behind it

• As insincerity is recognized employee listening (and attention) stops – like shutting off the TV – so the communication effort is wasted

• Engagement and performance levels drop as trust, confidence and loyalty erode and employees start to ask themselves, “why bother?”

• The supposition gains traction that the company is lying, holding back or not telling the whole story.  It is hard to see the glass as half-full when attitudes have soured.

On the other hand, when the message is honest, straightforward and without guile the opposite reaction tends to occur:

• Organizational credibility is strengthened

• Company loyalty is fostered

• Engagement levels and management support are strengthened

The implication is clear:  employees can handle the truth, should rightly expect it from their employer, and will not take kindly to bland corporate-speak.   So don’t get caught making excuses; it didn’t work when you tried it with your mother, and it won’t work with your employees either.

One of the most debated issues among Human Resource professionals for the past several years has been the back and forth arguments regarding effective performance appraisal processes.  Everyone seems to have their oar in the water, anxious to join the debate about what works and what doesn’t.

What companies should do, and what they shouldn’t.

In one corner you have the performance management crowd who want to divorce pay increases from the performance appraisal process.  Two separate discussions.  They prefer to focus attention on performance improvements and career counseling – issues that tend to have a longer term focus. Looking forward, not backward.  The subject of pay determination (the increase) would come later, during some vaguely defined subsequent conversation.

In another corner you have the so-called traditional practitioners, those who tie rewards directly to the work effort and in doing so tend to combine performance, reward determination and career counseling steps into a single conversation.  Performance improvements and the where-are-we-going? discussion are the epilogue here, not the main topic.

And finally you have the employee perspective, those who have delivered the performance and await management’s assessment and reward determination.  They want to see, and expect to see a direct connection between their efforts (performance) and a subsequent connecting reward (pay increase).

What’s wrong with performance appraisal?

Part of the reason for such active and long lasting debate between often opposing viewpoints is that performance appraisal systems are flawed; we all recognize that they are the object of numerous well-deserved criticisms.

• Managers do a poor job of it.  Whether it’s lack of training, lack of interest or simply an attitude of “I’ve got more important issues to deal with,” the result is often rushed, inadequately thought out and . . . short.

• Should pay increases be tied / linked with performance?  Appraisal conversations run the gamut from emphasizing the past review cycle’s performance to “looking forward for a more productive tomorrow.”  The cause-and-effect pay increase may or may not even be discussed.

• Favored son (or daughter) treatment.  The “I like you” or opposite syndrome, regardless of performance.  Fair treatment can be a casualty if appraisals are too subjective.  Refer again to the training issue.

• Job responsibilities not clarified. When the manager expects performance “A” and the employee thinks “B” is called for, and the outdated description shows a muddled “C” – what follows is going to be an awkward conversation.

• Forms gone wild.  Human Resources and systems people always tinkering with forms, creating ever longer, more complicated processes.  The usual result is a manager’s passive resistance and poorly handled assessments.

• Process evolution.  A good idea evolved into something bad, something feared, something to be avoided.  Other than the potential for a pay increase, almost nobody looks forward to these discussions.

• The focal date review.  “Let’s do these things all at once.”  Procedures that mass produce performance appraisal forms and meetings usually result in a loss of quality – and credibility for the process.  Pity the manager who has ten of these to work on at the same time.

What’s good about performance appraisal?

The process of performance appraisal has been around since the first manager – subordinate conversation, and that learning curve of experience has brought about a number of solid advantages:

• How else are you going to tell an employee how they’re doing?

• If your compensation strategy is to have a pay-for-performance program, you’ll need performance appraisal to assess the employee’s contribution, and to somehow assign a corresponding reward – to pay . . for. . performance.

• Employees expect a connection between performance and pay.  That’s what they’re listening for during the performance discussion.

• It makes sense to periodically review performance, to eliminate the need for employees to stress over when to ask for a raise.

During any performance appraisal discussion the employee’s first question (asked or simply thought) is always going to be, “how much is my raise?”  If you’re not prepared to discuss that, even mentioning your “recommendation,” you’re in trouble.  Because employees tend to pay closer attention to career counseling and next performance steps after the raise for past performance has been resolved.

When an employee expects a performance appraisal discussion to include a reference (at least) to a likely pay raise, and you don’t cover that topic, the meeting will go rapidly downhill from there.

• They won’t be hearing your thoughts for the future, as they’ve stopped listening.  You’re not talking about what they want to hear.

• Frustration and lost engagement are going to seep into body language, tone and perhaps even conversation, with the recognition that pay-for-performance is somehow not viewed as a primary concern by management (by you).

• To make the assessment process work employees need to be engaged in the  conversation.  Otherwise what you’re left with is delivering a lecture, a boring monologue to a half-interested party who only hears bla-bla-bla.

What do I think?

I like to connect rewards with performance, because performance rewarded is performance repeated.

I like to acknowledge the elephant in the room, that employees want and expect that their performance appraisal meeting would cover reward determination as a key component, even if senior management approval remains pending.

I don’t like to artificially separate performance from reward, as if somehow the two aren’t connected.  The employee considers it a solid, direct line connection.

Go ahead and disagree, if you like.  There are many valid points of view on the subject, and no single answer works every time, for every organization.

But now you have my two cents.

Really?  Seriously.

Sometimes a warning flag needs to be waved more than once.   Because sometimes the decision-makers out there just don’t get it.   After all, goes the wide-eyed and innocent lament, what’s the big deal if you give an employee a bogus title?  Is anyone being harmed?  It doesn’t cost anything, right?

Some Human Resource advocates even claim that offering an employee a special title is a harmless and inexpensive reward, one that doesn’t raise employer costs.  It’s nothing more than a feel-good gesture.   It also raises the morale of affected employees.

I don’t think so.  So pay attention to the red flag I’m waving.

Why does this happen?

• Managers grant esoteric titles to those for whom they have limited means of reward.  “I can’t give you the increase you deserve, so let’s change your title.”  Like greasing a squeaky wheel for a short term fix they want to do something to keep the employee quiet.

• Employees are given opportunities (titles) where none should exist.  Have you experienced the long serving Secretary / Administrative Assistant promoted to Office Manager, while performing the same job?

• As a salve to employees a “special” title is used because the position (usually clerical) is considered so different from other jobs that it needs to be specifically identified.  Special titles can also be seen as reflecting on the importance of the managers themselves.

You Can Reap A bitter harvest

Let me explain what you can expect from planting these problem “seeds.”

• Role clarity (job duties, business impact, decision-making, etc.) behind questionable titles becomes blurred.  This in turn generates more confusion as the company creates Senior Managers and Group or Area Directors and other in-between titles to differentiate the “real” jobs from inflated titles.

• When attempting to determine market competitiveness the less accurate the title is in relation to the work performed, the more likely your analysis will be skewed.  Benchmarking unique, employee-specific and inflated titles hampers an accurate assessment of your competitiveness.  This could have real cost impact.

• Those with inflated titles will expect the perks or privileges that accompany the title, and their absence could cause difficulties.  What do you think went through the Receptionist’s mind when her title was changed to “First Impressions Manager?”  It’s an awkward conversation when you tell an employee that the import of their new level in the organization is “title only.”

• Inflated titles can be a detriment to incumbents as well, such as the “Director” who now only qualifies for a “Manager” title with a prospective employer.  These employees have limited opportunities outside your company because other employers would be reluctant to hire someone where the title is lateral or even backward to what they currently hold.  The result could be that mediocre performers remain with your company.

• The natural extension of inflated titles is inflated grades / salary ranges, as the bogus “senior” position would be placed in a higher grade than the “intermediate” position.  This practice will gradually increase your fixed costs without a corresponding rise in either performance or capability.

• Employees don’t like giving up inappropriate titles.  Thus employee relations issues will likely develop if you try to correct past practices.  You may have to develop creative “buy out” scenarios or grandfather employees.

What to do

If you are in a situation with inflated, redundant and confusing job titles, what steps can improve your lot?

• Organize a cleaning exercise: start with the low hanging fruit by eliminating all questionable titles that are unoccupied.

• Accompany that initiative by implementing tighter authorization procedures before a “new” title is created.  This would cut off the flow of new problems even as you address the core issue of incumbents.

• The company would need fewer job descriptions if the wording was more generalized.  Standardized titles would clear away much of the role responsibility confusion.

Fewer titles provide greater role clarity for your organization, improved accuracy in assessing pay competitiveness, more control of labor costs and higher morale as employees know where they stand and what they must do to succeed in your organization.

A final caution: be careful of setting up titles without occupants, ”in case we want to promote someone down the road.”  Guess what?  You will.