Is your Appraisal system used to provoke more performance? Is the old GE method of “rank and yank” used to remove the 10% lowest performing people?
Does your organisation use a plethora of systems to coerce and bribe employees to be more effective? An article I shared recently alleged that Amazon managers were hiring more people than they needed, because they were incentivised to fire the least well performing.
The perverse effects of incentives are well documented – don’t do it!
Although I can’t see any reason why these incentive systems are incapable of working, in general, they don’t work.
The incentive scheme should encourage the desired behaviour. It just happens that people regard the system as a challenge – how bored must they be in their job – and seek ways to circumvent the system and get the incentive. It becomes a Game.
I can see why you are interested in performance management (PM) because you found that coercion and bribery don’t work in the long term.
The purpose of a PM system is to get more work done. There is no other reason.
You might think it sensible to reward people for attending work regularly or producing the right “quality” work. I don’t see the point in paying twice for same things.
If it costs you 35% more to get 35% more work done, it all seems rather pointless in the medium term.
I know labour costs are often not the biggest contributor to the Cost of Sales, but wouldn’t you rather have a management system that produces 35% more work for little extra cost?
Let’s call that a people management system, a culture or leadership.
Before we get an argument over fairness and the value due to labour, let me say I wholeheartedly support paying better, indeed the best, salaries.
Only the best people work for the best organisation, so they deserve the best pay.
I will show you how to have the best performance of any organisation in your sector, to become outstanding.
When your people astonish you every day, don’t they deserve the best reward too?
When you’re ready to journey to outstanding, let’s talk.
Find a time that suits you to talk https://bit.ly/MMLBooking