For my family, traveling is quite an ordeal. Having two boys with autism means I need to do a lot to get them to overcome their fears of going to someplace new. That means finding an incentive that will excite them enough to leave the comforts of Southern California and brave the more temperate, ancient world that is my second home: Germany. For my youngest son, that means going to Disneyland Paris at the end of the trip. For my oldest son, it means having Spaghettieis every day. Both these perks aligned with the values of my boys, and my family, and communicated the type of culture we have: fun, family, and good food (or in this case, treats).
The beginning of the year is a time of stress for managers, and one often looked forward with anticipation by employees. It’s that time when the Company shares its values with the employee. You might be thinking of mission statements, the company All Hands meetings, or new company visions being shared in meetings around the globe. And yes, while that does share the company purpose, vision, and goals, that doesn’t tell your employees what the Company, Organization, and ultimately each individual manager values. That is communicated by compensation reviews or raises and promotions.
Employers take the time to sit each employee down and outline their performance, and what has and has not qualified them for an increase, promotion, and/or bonus. Human Resource departments diligently outline to each manager the company values, the ways to express and approach those values, and how to best target the high performers on the team. Numbers, charts, spreadsheets, databases, etc. are being generated to best identify how allocations should be made. Performance and potential are weighed, market adjustments are made, and compensation is calculated. Managers, directors, and so on look to find ways to make allowances and stretch resources to try and keep things as human as possible. But in the end, when all is said and done, the results of this process outline the values of the company.
This is important to note because the annual compensation review should not be a surprise for anyone, whether or not they received a raise or promotion. If, as a manager, you have been diligent in regular (at least quarterly, if not monthly) performance reviews with your direct reports, and outlined the values of the company and those expectations, then nothing should be a surprise unless it’s a pleasant surprise that was unexpected. The problem that I’ve often seen is a lack of clarity. I’m not talking about your Key Performance Indicators, which are hard numbers and are the foundation of all performance reviews, but rather the how of your performance review. How, as in how those key performance indicators are reached, how your team performs, and how they treat each other.
When I started as a manager a few years ago, my director, Jon Lloyd, lent me a book entitled The Five Dysfunctions of a Team: A Leadership Fable, which shared a story that I have always kept with me: promotions communicate what you value. The story is found on page 370 of the ebook version and was told by the main character, the CEO trying to fix a dysfunctional C-Suite team, about her first promotion as a manager. She had one top performer on the team that had a really bad attitude. In spite of his being the top performer, his attitude and methods of accomplishing the work impacted the culture of the team. Instead of firing him, she promoted him. Instantly three members of the team quit, and the department fell into chaos. She made the mistake that so many other managers have made before and valued individual performance over culture, and as such damaged the team and overall performance.
Performance is valuable because it’s through a long history of performance that drives business success. But long histories of performance don’t happen unless you have a culture of respect, gratitude, and trust. So while working through compensation adjustments, bonuses, and promotions, please keep in mind the long-term impacts of your actions. It communicates volumes to your employees about what you and your organization truly value, and that value will dictate the culture you wish to foster a lot more than Free Food Fridays, Margarita Mondays, or pep rallies every quarter. Celebrate your wins and cultural contributions, and you will see an organization that will thrive.