My colleague once shared a story about managing that I will never forget. At the conclusion of her company’s performance management process, one of the new manager’s evaluations were the most thoughtful, honest and actionable she’d ever seen – despite it being his first time providing formal feedback. Unfortunately, it was also his last time. Upon realizing the effort required to manage people, the employee decided to relinquish his managing role and return to his passion as a software developer.
I love this story because it highlights the importance of truly understanding people management. "Manager" is a responsibility – not just a fancy title – that requires a special set of skills and immense effort. And it's not for everybody: It should be okay for ambitious high performers to decline the management career path.
The many consequences of ineffective and uncommitted managers take a high toll on organization effectiveness. Far too often, top individual contributors transition into management roles for the wrong reasons and without knowing what the role truly entails. In a previous post, I shared some alarming data from the Corporate Executive Board’s (CEB) Corporate Leadership Council research:
- 57 percent of managers would have opted for non-management roles if there were an option.
- 65 percent of managers would "opt-out" of their management roles today if given a chance to take another equally attractive role.
- 31 percent of managers were neither committed nor effective at their management roles.
- Only 19 percent (out of 9000 managers studied) were both committed and effective at managing.
In order to avoid the mediocre management syndrome, human resource professionals need to provide career path alternatives, help high performers consider alternatives and then carefully select qualified and committed managers. Below are three ways to cultivate the best managers for your company and determine the best paths for your employees:
1. Offer alternative career ladders
Commonly found in technology industries, dual career ladders allow those not well-suited or interested in management to advance their careers up a comparable professional ladder. "Distinguished engineer" might be the job-level equivalent of a senior manager or director, for example. And an engineering or scientific "fellow" may be the equivalent of a vice president.
2. Mentor aspiring managers
You can design a set of tools, programs and experiences to help top performers gain an understanding of the management path – and make an informed decision about whether it's right for them. At 2020 Talent Management, for example, we developed a one-day program to mentor aspiring managers in Bangalore, India. During the pilot program, two engineers approached me after lunch, having already decided management was not right for them. This was a true win-win – the engineers avoided accepting an ill-fitting job and the company avoided appointing disengaged managers.
The next time I delivered the program in Boston, I shared the Bangalore story with the group. By 11:00 a.m. that morning, one of the participants told me he did not have to wait until after lunch – he already understood management was not the best fit.
3. Design a comprehensive selection process
Jim Clifton, the chairman and CEO of Gallup Inc., said, "The single biggest decision you make in your job – bigger than all the rest – is who you name manager. When you name the wrong person manager, nothing fixes that bad decision."
Establishing a formal process for selecting new managers is critical to the future success of your organization. While the hiring manager is ultimately responsible for any decision, the smartest hiring choices are made in consultation with others (i.e. HR, Leadership Development, current colleagues). When selecting new manager candidates, consider their skills and experiences, such as leadership on informal teams or projects, collaboration and ability to establish relationships beyond their immediate team, as well as their personal motivation and commitment to being a manager. Consider utilizing standardized tools that assess attributes that correlate with manager/leader success, such as Emotional Intelligence and Learning Agility.
If you offer a mentorship or self-selection management program as described above, did the candidate take advantage of it? You can also ask candidates to work through a manager-oriented case study, such as the HBR case study, Is the Rookie Ready.
Great leaders foster engaged teams that deliver great results. By carefully selecting and developing effective and committed managers, you can enhance your organization’s competitive advantage and ensure a sustainable future for your company.
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A New Poseidon Adventure: Flipping Succession Planning Upside Down
Organizations make significant investments in efforts to hire the right candidates – the people who have the right experience and cultural fit. By carefully managing the performance and potential of these people over time, the organization can grow its leadership pipeline, keep a steady inventory of needed skills and competencies and remain nimble in the face of change (which we have plenty of all around us these day) – all of which can have serious impact on the bottom line. However, much of this pie-in-the-sky stuff relies on being able to locate and cultivate high-potential and high-performing talent across the board. Without an integrated succession management solution, recognizing and developing talent can be an ever-elusive process. The questions we are seeing asked today include: does the traditional top-down approach to succession management still make enough of a difference? Does managing succession for a slim strata of senior executives take full advantage of the kinds of talent data we now have at our fingertips? It doesn’t have to be so. Succession management can be an interactive process between senior leadership, managers and employees at all levels of the organization. And, if we trust them, we can actually let employees become active participants in their own career development. (Shudder.) Career Management (Succession Planning Flipped Upside Down) This "bottom-up" approach is gaining momentum because who better to tell us about employee career path preferences than employees themselves. Organizations actually have talent management and other HR systems in place that allow for collecting and analyzing a whole slew of data around: Career history Career preferences Mobility preferences Professional and special skills Education achieved Competency ratings Performance scores Goal achievement Training and certifications Etc. In short, pretty much everything we’d want to know to make well-informed succession planning and talent pooling decisions. For some, the leap is simply putting some power into the employee’s hands. The talent management system of 2011 is capable of displaying a clear internal career path for employees and then, on the basis of all that data bulleted out above, showing a "Readiness Gap" – what do you need to do to make the step to the next level? And if your talent management environment comes armed with a real Learning Management System, you can take it to the next level with a dynamically generated development plan that gets the employee on the right path to actually closing those gaps. Faster development, faster mobility. Organizations that seriously favor internal mobility don’t just make employees stick on pre-defined career paths – they can search for ANY job in the company and check their Readiness levels. I might be in accounting today, but what I really want to do is move to marketing. Giving employees the chance to explore various career avenues within the organization helps assure that "water finds its level" – that is, that the right people with the right skills and the right levels of motivation and engagement find the right job roles internally. Employee participation is key, but make no mistake – managers play an important role in this interactive process. They must be prepared to provide career coaching, identify development opportunities and recommend employees for job openings. The candid discussions require that employees have open access to information so they can best understand the criteria necessary to move to the next level. A Two-Way Street Employee-driven career management is just one tool. The more traditional top-down approach to succession management remains indispensable. But organizations that value talent mobility and the ability to be able to shift and mobilize talent resources quickly will find that attention to career pathing can be vital. For employees, of course, the impacts are immediate and include boosted levels of engagement, higher retention, increased productivity and more.
The Hidden Costs of Ignoring Your Talent Management Strategy
Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs. Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean. Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management. The Real Costs of "Doing Nothing" As a Talent Management Strategy The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example: Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone. Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business. In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income. To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.
The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance
With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.