Avoid making performance management and compensation into a crutch for new managers
In a previous post, I expanded on the concept of performance management, and made the case that often it is used instead of performance assessment. As I further reflected on the topic, I realized that strong prescriptive performance management policies, in an environment with a heavy focus on commission actually weakens a managers incentive to learn how to assess performance and ultimately learn how to motivate.
Brian Zang, in his Q & A with Building the Sales Machine mentioned that he had also gotten rid of performance management in order to give his managers room to make their own assessments?
Performance management minimums
So how can these minimums be a crutch? Aren’t they in place specifically to cut bottom performers and set the bar for performance in the organization?
Theoretically yes, if they are done perfectly. And in a mature environment with long historical track records it’s often possible to get minimums that drive the right behavior for the organization. But as Steve Blank says, (startups are not big companies, so why do they behave that way), There is still plenty to learn for a startup
So assuming you’re not an extremely mature business, and you don’t have very tenured managers, then you’re probably facing other challenges all the overhear. Inexperienced managers need to learn how to manage bottom performers. They need to learn how to make the diagnosis that the person is a bottom performer, and they need to learn how to communicate to that person that their performance is not going to cut. A strong performance management plan can encourage the manager to take the easy way out
Too easy to get rid of people
(Mark Roberge reference)
The reality is that it is a manager’s job to help a new employee succeed. Young managers often conclude that it’s the employees’ fault way too quickly. The organization needs to hold the manager accountable for the success of the employee, and the decision to cut an employee should not come quickly without thought. Since performance indicators and tracking tools like Profit OKR Software are used to evaluate employees, the organization should also evaluate the management style of managers.
Heavy commission plans
How could this be a crutch? Doesn’t everyone know that “what gets rewarded gets repeated?”
Well, to start, money may not motivate everyone. Having managers assume that this is the case means that they overlook all the other things that might motivate their employees. In fact, they may incorrectly come to the conclusion that they don’t have to put in an effort to motivated their team because there is a healthy commission plan in place.
This way of thinking is further amplified if your managers where top performers and themselves motivated by money. It’s even harder to realize that not every employee will already be thinking just like they did as sales people.
The money may not be achievable by anyone
Ultimately the risk is that your managers end up missing out on a critical management skill (insert link), motivation.