Disconnect base compensation and yearly employee performance reviews

by on June 5, 2009 · 0 Comment POSTED IN: HR Info Center

Change expectations with employee performance reviews

Disconnect the base pay administration from the conversation of last year’s employee performance reviews and just talk to them about what’s really going on there. But the bonus is difference between the golden egg and the goose.

There are two different kinds of employee performance reviews and compensation plans. One of them is a goose-based system and ones that an egg-based system. To separate these, Steven Covey talks about the difference between production and production capability.

He says that production is kind of like golden egg. Why are we in business? Make golden eggs. How do we get them? Well, we have new geese. Okay. Traditional – the cascading business objectives which I think you paid bonuses on that come from the top and all the way to the bottom, those are eggs.

Okay, did you make your calls, did you have the production quota, you have the sales quota, you have – did you do the things we are paying you to do to a level that merits extra money? Yes or no? That’s an egg-based system for employee performance reviews. I have no problem with that.

You need a performance management system to decide whether it feeds a bonus system or not .

The part that’s the problem is when I start talking about your teamwork and communication skills and attendance and all that stuff, the softer things about developing you or your knowledge of this product, all those developmental things are what catalytic coaching helps you with.

The things about running the business, you need a system like you’re describing for whether it ends up in a bonus or not. Okay, you need to be able to talk. Remember I said when you sit down and talk to them about your business objectives, that’s like you’re describing the cascading business objectives.

You need that kind of system. This does not try to replace that. It doesn’t pass – it’s a separate tool. Remember its better to have multiple good employee performance reviews in different areas than one overall review that covers nothing

Edited remarks from the Rapid Learning Institute webinar “No More Performance Reviews! – A Revolutionary Approach to Performance Feedback” by Gary Markle

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