There are various approaches to employee peer review. Comprehensive multi-level feedback, top-down and bottom-up comparisons, and even the lightening fast Stoplight 360 I wrote about here a few years ago. In many instances, however, the most powerful rating system is the internal market.
Employees work with other employees whom they like, can depend on, and who carry their own weight. Terrific technical expertise is wasted if no one calls on it. The most popular employee remains idle away from the water cooler if he or she can’t be relied on to deliver in a timely fashion.
I’ve worked with numerous businesses who have faced a reduction in force (RIF). In most cases they try to develop a fair selection system for laying off people. A few have measurable productivity. In those companies, the decision is easier. Those who don’t produce are higher on the list.
Whether you have productivity metrics or not, employee peer review, the work pattern of colleagues, is still the best barometer.
Is there a supervisor or project manager who seems to spend most of his time waiting for the next job? A technician who is snapped up by another team the moment he becomes available? A support person who always has a disproportionate backlog of help requests? An engineer who spends most of his time working on tasks that are below his pay grade?
The Internal Market isn’t sensitive to seniority, education or job title. It’s the vote of colleagues on how valuable a person is to the organization.
How do you determine whether a less experienced hire has potential? It’s a pretty safe bet that it’s someone who is busy. It’s someone who other people are making an effort to mentor and train. It’s the employee everyone wants to work with.
You don’t have to wait for a crisis to pay attention to the Internal Market. It doesn’t require long forms, goal setting or meetings for guidance. It is an integral part of your organization. Performance documentation is usually just an attempt to codify what everyone knows and sees daily.
Deriving value from employee peer review is simply a shift in how you observe your workforce. Pay attention to the Internal Market, and a lot of personnel decisions become obvious.
Do you know a business owner who would enjoy Awake at 2 o’clock? Please share!
The M&A world abounds with horror stories of financial buyers who stripped the employee benefits from a company and drove off its key personnel. Others pulled their capital as soon as they had control (to leverage it in another deal) and left the business staggering under the debt replacing it. Still more inserted a Hired Gun executive from another industry whose inexperience quickly ran the business on the rocks.
Of course, employees have the right to their lives. We are all distracted by problems involving home, health and family. Some people, however, just seem to make a lot of bad decisions despite the best support you can render.
Selling to employees requires legal agreements, specialized compensation plans and a willingness to run the company transparently. The return is a team that is committed to the long term, highly motivated, and all on the same page when it comes to growing the business.
In large organizations you can hide in a crowd for a long time. Be wary of resumes that concentrate on credit for group activities. Carefully review claims from a member of an “award-winning team,” “record setting department,” or “nationally recognized initiative.” Such people may be superstars, or they might just be very skilled at standing next to superstars. Examine their personal contributions in detail.
I had a small family business with one employee. She was very loyal to us as a family and came to work nearly every day (which was an important part of the job because we were very small and very dependent on each other). She could manage herself and her work load very well. The customers loved her, she knew the business, understood the risks involved and – probably most importantly – knew when to ask for help and when not to. She always got the job done and did it well. She started on a part-time basis and then moved into full.
After she became a full-time employee, I began to see the horrific choices she was making in her personal life (because she would come and talk to me about them – often for long periods of time). Her issues began to dominate the office started causing more and more problems for me. One day, our work was interrupted because someone showed up to repossess her car….but how do you fire someone for that? And through it all, she still came to work every day, got her work done and the clients still loved her.
I tried to create boundaries to manage the drama, but probably didn’t do a great job of it, and it had a fairly negative effect on our relationship. I also had a hard time getting support from the other family members for terminating her because she did such a good job with her work and knew the business so well, and was so loyal to us and the company. In many ways, she would have been very difficult to replace.
It was a difficult situation that really had no good answers or solutions. In the end, it was resolved because we had to close the business for reasons that were completely beyond our control (and had nothing to do with her).
Closing the business actually solved a number of problems that had been brewing beneath the surface and threatened to make families dinners rather painful, but I can’t really recommend it as an effective or ongoing problem-solving tool.
Thanks for the story, Tracey. I wish I could say it was the first such I’ve heard. Closing the business is a more radical solution than I’d typically recommend, however! 😉