Yahoo! is drawing plenty of flack for ranking employees on a bell curve, a once-trendy practice that has since fallen out of favor. According to the Institute of Corporate Productivity, just over five percent of high-performing companies used such a system in 2011, versus nearly 20 percent two years before earlier. My take: thank goodness.
Years ago, I started my career at a company that used a ranking system euphemistically called “calibration.” While bottom-ranked employees weren’t necessarily fired (as is allegedly the case at Yahoo!), an individual’s rating directly affected their annual bonus: those dubbed “outstanding contributors” could earn more than 100 percent of their target payout, while those on the opposite end received less than or nothing at all. Virtually everyone – even those at the top – hated it. Employees essentially competed with each other for a bigger slice of a finite pie, and they avoided taking any risks, calculated or otherwise, that could jeopardize their bonus.
Now that I lead a team of my own, I’m glad my current employer doesn’t make me pit my staff against each other. Instead, I can recognize each individual’s contributions on their own merit. That said, as flawed as forced ranking may be, it’s is intended to encourage performance by rewarding high achievers. It’s still important to do this, as top talent is extremely valuable and often a flight risk.
No matter how a company formally manages and rewards performance, here are three ways to recognize strong performance on an everyday, informal basis:
- Take every opportunity to thank people for good work. Specifically cite what the employee did to earn recognition. Be sincere, and do it in person whenever possible. Handwritten notes are also good for employees who like to display recognition in their workspaces.
- Learn what your employees value, and reward them accordingly. Some employees love public recognition, while others would feel embarrassed by a glowing shout-out. If an employee craves interaction, host a team lunch to celebrate a job well done. If they’d love nothing more than some time to themselves, give them an afternoon off.
- Recognize hard-working, “in the trenches” employees who do a great job but aren’t vaulting up the corporate ladder. Not everyone can or should get promoted every year, so demonstrate that employees can earn recognition and reward independent of upward advancement.
Tamara Snyder is a senior vice president with Employee Engagement.
Image by TechCrunch.