Employee Ranking Systems LO16771

Sat, 31 Jan 1998 19:39:39 -0800

Replying to LO16647 --

Ben Compton writes:
> I've had several very thoughtful messages from people, and so I've decided
> to resubscribe. In another message I'll explain in more detail why I
> unsubscribed.

Welcome back, Ben.

> If a business doesn't know who the most valuable employees are, how are
> they to reward people based on performance? And if employees aren't
> rewarded for their performance, then what are they rewarded for? Rewarding
> people based on subjective criteria increases the risk that a business
> will behave in unethical ways (I define unethical, in this context, as
> rewarding someone for something they have not done). Furthermore, if
> employees aren't ranked how are they to know if they need to improve their
> skills or increase their knowledge so they can become more valuable to the
> company?

Just be sure you don't give in to the lure of having too simple a value
system. A successful organization depends on the application of a wide
variety of skills by its people. Can you identify what those skills are,
and value people according to the appropriate measures? Can you judge the
relative worth to the company of a top-notch system programmer vs. a
senior manager of mediocre ability? Can you judge the relative worth of a
"hero" who works hard to rescue a project in deep trouble (maybe one he
helped get in trouble) vs. a worker who quietly and effectively keeps
projects out of trouble? Can you separate out the contribution of an
individual on a project that required constant close teamwork among
several people? Can you reward an individual for good work on a project
that was an overall failure?

> Most people respond to competition. In the face of competition a person is
> faced with two choices: Compete as hard as you can, or get off the playing
> field. That is the whole premise of a business: Compete with other
> businesses, and if you can no longer compete find another business to go
> into. Why should the same principle not apply to employees? As employees
> compete for the value they give their employer the business as a whole
> increases it's competitiveness. What better way to encourage learning than
> to have people compete with one another based on their knowledge and
> skill?

>From an earlier message on this list by Roxanne Abbas:

1. External Focus vs. Internal Focus

Wonderful managers keep their people focused on the world outside the organization. Their people have a deep, daily understanding of customers and their needs.

Clueless managers keep their people focused internally. Their people direct their attention upward, having a deep daily understanding of the bosses and their needs. These employees are also looking laterally at one another, measuring their individual competence by contrasting themselves with their peers. Employees of the clueless pay a lot of attention to their immediate superiors. (That word itself says a lot about the expected relationship. An employee, introducing his manager to a visitor was asked by the visitor "Is this your superior?" "No", he replied "this is my boss!".)

One way managers encourage "internal focus" is by encouraging employees to compete with one another for rewards, recognition, ratings and rankings. -- This was an extract from "Leaders of People: Some are Wonderful, Some are Clueless. The Rest are Somewhere In Between" by Peter R. Scholtes, available on www.pscholtes.com.

> Competition is a natural principle that has universal application. Instead > of fighting it, why not leverage it?

It's a management tool like any other. You have to understand the consquences of applying it, which may not be entirely what you wanted to accomplish. If you haven't yet, you might want to look into "Co-opetition" (start at http://mayet.som.yale.edu/~nalebuff/index2.html) for a structure encompassing both competition and cooperation (disclaimer: I'm only vaguely familiar with it myself).

A final thought: pay attention to short term vs. long term consequences of your actions; be wary of "mortaging the future" to achieve attractive short term gains. You mentioned wanting to make lots of money. I'd ask "For how long? Are you willing to lose or reinvest immediate gains for the sake of better returns later on?"


Best of luck with your new endeavor, Don Dwiggins "Experience is what you get SEI Information Technology when you were expecting something else." dwig@earthlink.net -- Seen on an office wall

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