A Better Way to Gauge Performance
Employee rankings and performance evaluations are serious business. They are as difficult to do well as they are important for an organization’s development. Seems every company has its own unique philosophy and system for rating and ranking performance. Many use a simple scale ranging from 1 to 3 (1: does not meet; 2: meets expectations; 3: exceeds expectations) while others use a 4 point scale (1: does not meet; 2: meets; 3: often exceeds; 4: consistently exceeds/role model) and I’ve even seen some go up to five (1: does not meet; 2: partially meets; 3: meets; 4: exceeds most of the time; 5: exceeds all of the time). There are probably many others.
Every system has its own merits but clearly, the fewer the number/types of rankings to pick from, the harder it becomes to differentiate performance between individuals and the harder it is to recognize nuanced contributions.
I therefore would like to propose a new approach and classification model. A new methodology that rates performance not just within the context of a company’s own finite talent pool, but across an industry and even globally.
A+ World-Class: With the globalization of business and improved access to international talent thanks to social media channels such as LinkedIn, companies owe it to themselves (and their employees) to judge performance in a more global context. The highest ranking an employee should be able to strive for is not just to be the best in their organization, not even the very best in his/her industry, but to be the best within his/her function (i.e. finance, marketing, etc…). The World-Class ranking should be reserved for those rare individuals who consistently perform at or above the highest standards of their chosen profession. These are the stars who demonstrate competence that would shine in any organization, any industry and any region of the world. Precious and rare, they are truly the indispensable role models, the elite of their functions who shine on the global stage. Because of their exemplary competence and brilliance they are appreciated and sought after across multiple industries.
A Best-in-Class: These individuals perform and contribute at a level that puts them among the very best in their industry. They are highly recognized/respected by their peers and perform at a level consistent with the top talent the industry has to offer.
A- Top-of-the-Class: By definition, these individuals are your particular organization’s top performers. They surpass colleagues in their functions/teams (without necessarily performing at an industry or world-class level).
B Front-of-the-Class: A much larger percentage of your organization, these individuals offer solid and appreciated performance & behaviors. They represent valuable contributors but they do not necessarily distinguish themselves vs. other internal peers.
C Back-of-the-Class: These are clearly your laggards who are struggling in one or more dimensions of their role or who still need to develop into their full potential. Maybe it is a question of missing skills/competencies/enthusiasm/focus. Maybe its just poor attitude. Either way, they are barely hanging on and the question is whether they are worth the extra attention & support needed.
D Bottom-of-the-Class a.k.a the Pain-in-the-(Cl)ass: These are the anchors that are dragging down their teams and co-workers. They are almost never worth the additional management time and effort investment. These individuals need to be let go as soon as possible, for their own good and for the benefit of the business. They are not only unworthy of any further investment, they are toxic and can drag down your entire organization.
The goal of such a model is to:
- Calibrate and rank employees based on more than intra-company standards by:
- Recognizing performance that transcends industries and geographies
- Recognizing industry-leading performance
- Give employees a fair/market assessment of their performance both within and outside the organization
- Challenge and stimulate high potential employees to stretch themselves beyond simply being better than those around them. After all, you don’t want an organization full of people who are just content to run a little faster than the slowest member of the team.
- Help managers provide richer more nuanced evaluations with more “buckets” and performance criteria
- Help managers identify employees that are mission-detractors and others who might not be worth either investing much time with or keeping on board for much longer.
Such a model obviously does not come without challenges, questions and potential drawbacks. A few that come to mind include:
- Who are the arbiters of both World-Class and Best-in-Class performance? How will they be able to assess these if they have limited experience themselves (i.e. worked in same company for whole career or never worked outside the industry). Solution: use a diverse panel of evaluators ensuring that they have sufficient experience inside and outside the industry to make appropriate assessments. Use external benchmarking services, guidance and input. Clearly define performance and behavior requirements for World-Class and Best-in-Class standards.
- Up to 50% of staff could potentially be considered C or D grade. This could be seen as excessive or unfair, especially in high performance organizations which have a disproportionate amount of strong talent. Morale and engagement could take a serious hit. Solution: don’t use hard/fixed percentages or quotas, especially for the B grade category.
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