Niki is Insperity's director, service operations. She specializes in employee onboarding, human capital management and HR infrastructure.
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During employees' yearly performance reviews, there are two common scenarios. First, imagine an employee who receives a rave yearly review, scoring at the top of each performance category. While they may not be ready for a promotion yet, they're clearly on track to succeed so they're given greater responsibilities for the next year. Meanwhile, a different employee’s yearly review shows that they've struggled to excel in core competencies. They then receive fewer responsibilities so they can focus on developing those skills in the hopes they'll be ready next year.
Savvy managers will understand what is wrong with these scenarios. Though there are often positive intentions behind both decisions, this practice can actually lead to a phenomenon called “performance punishments.” High performers are “rewarded” with additional work, while average or below-average performers don't receive enough opportunities for development. Also called “quiet promotion,” top performers ultimately take on more without reaping the benefits of a higher title or additional compensation.
This can ultimately harm an organization by increasing stress on top performers and lowering their productivity. According to a study by the American Institute of Stress, 62% of employees experience high levels of stress, undermining workforce productivity. To avoid the effects of performance punishments, your company and its managers can focus on three areas.
1. Develop skills throughout the year.
Employees should never feel surprised by their yearly review. These meetings are a critical opportunity for managers to give employees a bird’s eye view of their performance and where they can expect to go within the organization. However, yearly reviews should serve as one of many moments throughout the year when employees receive praise or constructive criticism from their managers.
By touching base with employees, assigning skills development opportunities and connecting them with resources to learn throughout the year, your company's managers can provide support to help employees gain additional skills on an ongoing basis. Your top performers often feel eager for development opportunities, so you can prevent them from growing bored. Meanwhile, the employees performing at a lower level will benefit and lower the chances that they feel as if they must “catch up.”
2. Assign work fairly.
Companies understandably often feel tempted to assign more work to performers who don't need support in completing it. While high-quality work is important to a business, managers should consider how to receive first-rate work from employees who aren't yet performing at a consistent level of excellence. Of course, it's impossible to avoid some level of difference in the amount of work assigned to each employee. Nonetheless, stark imbalances in workload could lead to resentment among employees.
One option your organization can try is placing a top performer on the same team as a performer who needs to develop relevant skills. Another tactic is assigning an individual project to two employees of different skill levels. This can be a chance for your best talent to bolster their own leadership and training skills while developing employees can learn from working alongside them. Through group collaboration, employees can discover their strengths and weaknesses and produce higher-quality work together than any employee would separately.
3. Communicate expectations.
Top performers are often working toward a promotion. If they feel they deserve one but aren't receiving the opportunities they want, they may consider leaving your organization. To avoid potential discontent and resignations, managers need to focus on clear communication with their team.
During a yearly review, conversations can involve asking top performers directly about where they see themselves growing within the organization and whether a promotion is in their future. In a transparent and open culture, employees will feel comfortable being candid about their intentions. If an employee indicates they may wish to move on soon, their manager has a chance to offer additional opportunities for leadership development, advocate to higher-ups for a deserved promotion or articulate a path for that employee to their desired role.
In your organization, managers may not intentionally instill performance punishments, so they need to be aware of how the practice could alienate all employees on their teams. With ongoing skill development, fair distribution of work and open communication, managers can lead everyone on their team to growth and success.
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