5 sure-fire ways to destroy organizational excellence
A blog from a couple of years back by marketing guru and all-round provocative thinker Seth Godin entitled The fruitless search for extraordinary people willing to take ordinary jobs took me back to a boardroom conversation about executive pay.
Every company has a ‘compensation philosophy’ that it uses to guide how it sets the pay of employees, from the CEO on down. We talked about the challenges we were having meeting the performance expectations of shareholders and our need to increase the level of talent in the organization.
Then, as if we had just forgotten the previous conversation, we reconfirmed our compensation policy – to target pay at the market median (otherwise known as ‘average’). We were doing exactly what Godin proposes is lunacy – expecting above-average talent to deliver above-average results for average pay. Guilty as charged. Reflecting on this got me thinking about other ways organizations and leaders ‘kill’ the potential for excellence:
Rate everyone’s performance as ‘above expectations’: A few years ago I had the opportunity to help a client ‘fix’ their performance review process. We discovered there was nothing wrong with the performance criteria, the forms or the process. The problem was the ratings – the average performance score was 4.2/5. Only 10 per cent of employees scored a three (‘meets expectations’) and no one scored less. If the organization was delivering exceptional results perhaps this statistical improbability could be overlooked. But it wasn’t. The organization was reinforcing average performance and getting exactly what it deserved – average results.