Many companies handle performance reviews very differently and I can only speak from personal experience, but it seems as though more and more companies are subscribe to the fact that if reviews are tied to merit increases, then performance reviews have to be “right-sized” to fit whatever the budgeted salary number is for the year… When that time of year comes around, do you feel accomplished or dreading the meeting with your direct manager?
I understand the budget and P & L process; but if someone in the department is a superstar and rate 4 out of 5 on a review and a 4 is supposed to be a 4% increase, then this person should not be re-ranked as a 3.25 out of 5 because the department can only afford a 3-3.25% increase. Companies experience this type of constraints all the time when it comes to salary adjustments on an annual basis, but then why not change the method behind it and make the salary adjustment a “Cost of Living” increase or annual raise instead of tying it to a performance review? Has your company done something like this before or have you been part of these budgetary conversations before?
Another aspect that I have heard before for performance reviews is the idea my Sr Management that no one deserves a “perfect score”. It harkens back to the idea, that if someone is a 5/5 then they have nothing left to learn and should move on from the current position because their performance will eventually decline because they are bored or dissatisfied with their job. This is an opinion that is really hard to define and/or measure. Example: One of my direct reports was a person that came out of retirement because they were bored and just wanted a job where they could come in everyday, do their work and leave without any of the management stress, long hours or political aspects of the job; as a result this person was the best employee that I have ever had the pleasure of managing. When it came time for their annual performance review, I had no problem giving this person a 5/5 on the scale I was given by my company. Once I handed it to the VP of my department, I was promptly told that no one should ever score a 5/5 because then they have nothing to improve upon; once I made the argument that this person didn’t really need to improve all sorts of things happened, questions like why wasn’t this person running the department, was I a poor manager and not able to make tough critiques of my people? Why can’t someone just be really good at their job… These are things that will frustrate me, as it seems businesses use performance reviews as a tool to hold people back to a certain degree.
I have no problem telling people the things that they could improve upon, but on the other side, I also want people to know when I think they are excelling and looked at as an example to the rest of the department. Guess I was just not allowed to do that when it mattered and money was on the line.
Do you agree with your company’s performance policy is legitimate, fair and truthful? If not, what would you do to improve this if given the opportunity?