This article was authored by Jeanne Heydecker and originally published on the Woomentum network.
Appraisals and performance management programs are time consuming and don’t necessarily bring you any tangible results. They can be extremely biased, even outright discriminatory. One thing I have always advocated for is performance incentives given often – once a month or quarter being much better than annually.
I use a methodology called SMART:
- Simple: It is easy to understand what is to be accomplished.
- Measurable: The target is easy to quantify through data whether it has been achieved.
- Achievable: The person can actually achieve the target if they work hard and effectively.
- Relevant: The work is based on achieving an outcome relevant to the company and the client.
- Time-Based: It is easy to understand when the target needs to to be achieved.
This process can be used for products and services as well as across the company. It cannot be as biased or as emotionally charged as an annual meeting where a salary increase percentage is negotiated and in the end, no one is happy.
The next step is to do this individually as well as for the team as a whole. This means each individual has a set of targets to meet in order to get paid incentives, but the team as a whole needs to achieve a whole different set of goals to meet a team incentive. I know, that sounds like more work but here’s why it’s important that you do both:
- Individual “A” players should get paid better than average players on the team.
- Individuals who don’t don’t make their personal targets will keep the team from achieving their team targets. This sets up two different herd mentalities depending on the team:
- The team will get together and help the underperformer achieve their targets in order for them to get their team incentive. This helps the underperformer learn how to do their job better through team mentoring, or
- The underperformer will be quickly ostracized and leave the job due to a perceived hostile work environment. This typically happens when the underperformer refuses their help and blames others for their situation.
Let your teams manage their teams. Let them think about faster ways to do things better in order to achieve those targets. As they achieve more, increase the targets and incentives. They’re making more money for the firm – so give them a piece. I doesn’t hurt to share the wealth and your “A” players will stay longer, be more loyal, recommend your company to their friends who are also typically “A” players… It’s a win-win-win all around.
Try it out in your company and tell me how it works for you.