Performance Assessment and Team Dynamics

by Edward Henkler on December 10, 2013

Most salaried individuals would likely agree that performance assessment is a necessary evil and they also hate just about everything associated with it (unless they happen to win the “lottery”).  While competition can be useful, it is very challenging to reward individuals while motivating a team.  It’s equally hard to provide meaningful rewards if you try to reward the entire team.  So, what do you do?

I am against giving everyone a small percentage of the bonus pool.  In my experience, it doesn’t make anyone happy; instead it leads to a lot of frustration with relatively meaningless bonus amounts.  You might avoid this fate if you directed most of the bonus pool to the winning team but then you risk alienating other hard-working employees who were not on the winning team.  Instead, I’d recommend a multi-pronged approach that starts with the philosophy from one of my favorite books, Matthew Kelly’s “The Dream Manager”.

Start by understanding and helping your employees realize their dreams.  Approached authentically, you must recognize that these dreams will vary from someone who wants to become the CEO to someone who wants to start their own business to someone seeking a sabbatical to pursue an advanced degree.  You should help all of your employees realize their dreams but perhaps the winning team can get a bit of a “kicker” such as a low interest loan to start a business.  You can also hand out bonuses when the team completes their assignment rather than just at the end of the year.  Lastly, you can use a little trick that John Lucht talks about in “Insights for the Journey”.  When attempting to identify the top candidate, he recommends asking everyone, “if not you, who would be your top pick?”  In most cases, one or two names will be mentioned consistently and there will be strong support for special acknowledgment.

Abundance vs. Scarcity

I’ll close by suggesting that if you handle this correctly, you can create the spirit of abundance rather than the angst of scarcity.  I uncovered an interesting example of this when talking to students who were involved with EMBA versus MBA programs.  In case you’re unfamiliar with the acronyms, EMBA is an Executive Masters of Business Administration versus a Masters of Business Administration.  It’s just one small letter/word with one very significant difference.  The EMBA atmosphere tends to be collegial and collaborative as the students are typically employed and want to learn from the interactions with their peers.  The MBA program is very different as the students are typically seeking their first job and view themselves as in competition for scarce jobs.

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