In a recent episode we addressed underperformance, but what about addressing top performers? It was a great question that was posed to me recently and I am happy to share some thoughts on it.
You see, the way that large companies, or companies that are striving to be large, tackle this is frustrating to me. It’s actually one of my pet peeves. What am I talking about?
I’m talking about the fact that financial budgets are created and HR teams create rules around the bulk of your workforce being “standard.” It’s true.
I don’t want standard people on my team! I want my team to be jam-up amazing because when they are amazing, we exceeded the expectations our customer has of us. Heck yeah! That’s what I am in business for! That’s what you are in business for!
When I have amazing people, I can leave my business in their capable hands and have the freedom I want. I can live my Legendary Life because the talent around me runs the business and I can step away. Having standard employees doesn’t allow for that.
Why do corporations create expectations around their workforce being standard? They allow the budgeting process/expense planning to override what they know to be true. You see, pretty much all companies establish their budget before the end of the current fiscal year. Most large organizations finalize the following year’s budget (say 2021) in October of the current year (so in the example, they would be establishing the 2021 budget in October of this year). When it’s established they want to create a bucket of money to give to people relative to their performance reviews. But how do they know what to give?
Well, finance lives in a world of average, and HR creates the “bell curve” of talent, so together they create a budget that allows at least 50% of your workforce to be average. Again, what?! That kills me!
In reality, I want 50% of my workforce to be well above average. I want to pay all of my team their max bonuses. I want them to know that they are doing exceptionally well and to keep doing it. I want to give them a rating on their performance review that truly aligns with their behavior, their effort, and their results. I don’t want to be pigeonholed into having to rate everyone “standard” because that’s what the budget allows for. I don’t want my team to feel like they gave it their all and their all was equal to someone who just showed up and their breath fogged a mirror today. No. Those are two different performance levels and we should show that in our performance reviews.
As leaders, we need to actively reward our talent for being just that, talented. We need to give them an honest review. In the same way, I have challenged you to be honest with your underperformers, you have to be honest with your top performers. It is only fair. And if “fair” is part of your brand, you have to walk the walk.
So my challenge for you today is to create an environment where you don’t settle for mediocrity, you give honest feedback and praise to your top performers. You give them the monetary compensation they have earned. If that is tied to the budget, then set your budget to the highest level. Assume everyone is going to be well above the standard in your budget, and then if the reality is that not everyone is there, then don’t spend it. But don’t rate someone’s performance as less than just because you can’t afford to pay them what they earned. That is one sure-fire way to lose the talent you have.
Create a process where talent is acknowledged, celebrated, and rewarded. Your teams will continue to get better because of it.
Your challenge today is to honestly and fairly assess your top talent, give the correct feedback, and build routines to maintain this effort.