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Posts Tagged ‘Grading employees’

jack-welchA recent article in the Wall Street Journal “C-Suite Strategies” Report by Dr. Peter Cappelli, Director of the Center for Human Resources at Wharton, delves into our rather natural tendencies to put people into categories – especially in business.  We do it, he points, because it’s useful, providing managers with an easy way of thinking about people.  At work, we typically put them into boxes: The A players, who perform well, the C players, who perform poorly, and the rest, the B players stuck in the middle.

But Cappelli suggests this does companies and employees a lot more harm than good.

For starters, he notes, the boxes are just plain wrong.  Broad categories miss a lot of subtleties and “people’s true talents and strengths often get ignored.”  The notion that good players are always good creates a ‘halo effect’ in the mistaken belief that if you’re an A player in one thing, you will be an A player in another.  And these prophecies too often become self-fulfilling, if misguided.  When we give stars more opportunities to succeed, we risk denying those chances to those we expect to fail.

Former GE CEO Jack Welch abided by this tack with his famous “vitality curve” describing differences in employee performance and used as justification for forced ranking systems in which the bottom 10%, relative to other employees were usually shown the door.

And of course, once workers are labeled as the C player, they are usually shunted aside, or as in the GE case, out the door – even though on the next assignment, or with a little help, they may well improve in the next period.  Meanwhile, players labeled A-level are assumed to have more ability and get designated as high potentials.  “Research shows that when employees believe their current performance isn’t recognized, they are stuck with a B player label even if their performance shoots up… incentives no longer motivate them, so they give up trying.”

How do we shake off the natural inclination to put employees into boxes then?

Among Cappelli’s suggestions:

  • Respond to employees’ performance more quickly, reflecting on how variable that performance actually is. This might mean paying an excellent bonus for superb performance in one period or project, and perhaps none for lesser work on another project.
  • Monitor performance. Where possible, take people out of high-potential programs and slot in people whose performance is surging.
  • Create new performance categories based on the actual tasks people have to perform. Who is good at managing projects, negotiating agreements, running meetings?  “Knowing such things breaks down the tendency to rely on a simple good/bad employee classification.”
  • Finally, supervisors should be “active about managing subordinates.” Cappelli notes that “the evidence is overwhelming that it does matter how we set expectations, assign projects, hold people accountable for performance, provide feedback and so forth.

Finally, this: Surveyed HR leaders say their number one employee-potential assessment method is “management judgment” followed by “performance-review results.”  Nothing else even came close.

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