Today’s guest post is authored by Petter Andersson, global HR executive, talent development leader and consultant. He is a global thought leader in the field of organizational and talent development with more than 20 years of multinational experience in numerous HR executive, business and consulting roles.
Moving away from annual ratings and rankings might spark worries that your organization is less performance oriented. Some might question if you can still have a “pay for performance” culture and be an organization of meritocracy, where employees’ performance is counted for and rewarded. One way to reduce those worries and make change more understandable, is to think about your employees as professional athletes on a team.
One principle for a professional sports team is the same as for any organization. You win as a team and you lose as a team. Success or failure depends on many variables and everyone plays a part, some more than others. Even with a strong team focus, professional sports teams are often also exceptional in managing individual differentiation in pay, development and growth. How do they do it? I believe it’s through continuous coaching, transparency in evaluation, and ongoing gathering of insights about the athletes, their performance and potential.
A key to acquiring such deep understanding is to foster high intrinsic motivation, a growth mindset (willingness to learn from mistakes), and self-awareness among every professional athlete. Successful athletes on a team do not compete against each other , they compete against themselves. Most set personal goals and collect stats during every game and practice, using the data to understand how they can improve. Together with their coaches, they discuss which strengths to leverage and new ones to develop. The involvement of teammates and others in supporting individual performance aspirations and development is critical.
At a team level, the coach enables a strategy that maximizes on-court capabilities, balancing the players’ strengths with a winning strategy for how to play together.
Everyone has a role to fill and might not be equally successful in doing so. However, ranking players on a team against each other using a five-point scale and a bell curve makes no sense. You risk an inward-looking team occupied with internal competition rather than winning the game. A player’s relative performance against teammates matters less. Most likely, athletes already know how they performed against their personal goals, expectations and how they compare to others. Most likely, the coach understands how the player fits in the game strategy going forward.
One might argue that not all businesses are similar to sport teams and not all employees can are equal to athletes. I’d like to think there are more similarities than differences and lessons to be learned from the sports world for the rest of us who didn’t make it as far on the pitch.
In summary: Eliminating annual rating and ranking doesn’t mean you should stop setting expectations and evaluating employee performance. It doesn’t mean that you disregard data. Instead you will gather and analyze data continuously. Most of all, you are just about to change the principles for whom, how and why you evaluate performance.