Helping a Company Survive
In a previous Insight on HRTools.com, I described and detailed the business costs and benefits of implementing employee performance appraisals. As mentioned, employers want and need their employees to succeed. By effectively using this tool, you can help your employees better understand your expectations, and maybe even love their jobs, so they can help you succeed.
What should you do if you want to develop and implement an employee appraisal program? Sometimes it helps to share real life stories that employers or supervisors can relate to. Here is one of mine that may be both encouraging and relevant.
Out with the Old and In with a Change
I previously worked with a company that had a system where the salary increases, promotions, etc. were all based on seniority. With that criterion, all one had to do is survive and show up to work. Employees were then eligible for pay raises based on a pay-matrix system. Effectively there were no set standards and pay raises were based on and solely determined by seniority status.
To improve upon this system, I worked with the company managers and supervisors to replace it with a higher performing tool. We began the gradual process of creating a performance-driven system that was based on establishing evaluation criteria and meeting production standards. This was an especially significant time, because for several years the company could not afford across-the-board pay increases. So, in order for the company to survive, some things had to change.
We then encouraged the supervisors to sit down with the employees and review their performances and, if possible, develop individual training plans. For instance, supervisors and employees discussed career growth or advancement interests. This type of personal interest, when taken by supervisors, can be very motivating to employees.
It wasn’t all lollipops and roses, though. As they say, change is difficult for many to accept, and this change became a really hard sell. Most of the supervisors came up through the former system—through the ranks themselves—and, they were used to being paid the old way.
However, I could see that the old way did not inspire any sense of employee ownership in the company’s business objectives or goals; so we worked on that. Also, after years of no pay raises, we worked to find other ways to reward and recognize employee performance. We also tried to find other benefits that the company could provide to employees that would also have some tax advantages.
How This Story Ended
It was a slowly adopted change, and it was also slowly accepted. At the end of the hard-sell journey, I am pleased to say that everyone considered it a success. They realized that it was more expensive not to have this higher-performing tool—the performance appraisal system. Also, implementation did not hurt the bottom line, so they finally saw it as a win-win.
Here are a few final tips that employers might find worthwhile:
- Educate employees about how their individual performances affect a team environment.
- Provide structure and guidance, particularly when tying individual performances to the business goals; at the same time, try and keep some flexibility. By adeptly managing this balance, you will help set the stage for more freedom of expression, including individual creativity and strength.
- Evaluate what training or continuing education the employees need in order to regularly contribute to the company’s successes.
- Be prepared to provide feedback on a continuing basis. Strive for open, fair and honest communication on a regular basis.
As the former head of Intel, Andy Grove, said, “There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance.”