"A" Players, Layoffs, and Missing Data

Here's a real-life situation that I'll bet is getting played out in more than one company:

1. Company X identifies a  legitimate need to reduce headcount

2. Managers are asked to do an "A-B-C" performance ranking activity, with A being the stars and C being the lowest 10% (or whatever system is decided).

3. It is announced that retention decisions will be made based upon performance

4. It is then discovered that the "C" players (as well as others), many of whom have been with the organization since the first Reagan administration haven't received a written performance review since then, either.

5. All of those newly-identified low performers have also received regular pay raises over the years.

Ooops. I'm From Legal: Don't Do This.

• No performance review means no supporting written documentation,

• Regular pay raises imply satisfaction with performance.

The result? Your corporate legal eagles tell you that, absent defensible data, your downsizing will be done based on seniority--with the newest hires leaving first, regardless of performance.

If your organization hasn't demanded regular performance feedback and documentation, I hope this will cause all of that to change. In addition to the positive developmental aspect, having the data can protect your from what happened to the above organization:

1. Needing to manage lean in tough times.

2. Needing the very best people to do that.

3. Seeing some of the best people laid off while some of the lowest performers remain, hindering the ability to survive and hopefully thrive.

What's happening in your organization?

Comments

[Derek]

Wonderful article! Would you consider posting articles or blogging on my site: http://www.hrresource.com ...

[Karl Staib - Work Happy Now]

My company isn't cutting back, but I have plenty of friends who have lost their jobs. They were newer hires and were "no longer needed." It's a shame that companies don't look at performance, reviews and opinion of co-workers. Many more companies would have survived and wouldn't have gone under in these tough times.

[Marsha Keeffer]

Steve, you've just identified a classic nightmare scenario during a recession that guarantees the company involved won't be a competitor. Really good post - I hope companies (and employees) realize that reviews are necessary for the health of the organization.

[Joanne Bintliff-Ritchie]

Steve,

I've actually lived this scenario with one exception. There were annual performance reviews for everyone but those employed < 1year. However, the distinctions driving the 'who to cut' list were not matched in the reviews. Everyone had a performance rating of Acceptable or better, and the majority were better. So the legal eagles still stepped in and said our data was inconclusive and weak. We then had to fall back to data like time in position and years of service to identify the layoffs. We lost many strong performers and several new hires we had spent a great deal of $$ to recruit and onboard.

[Steve Roesler]

Derek,

Please email me to discuss at steve@steveroesler.com. Thanks.

[Steve Roesler]

Karl,

I have to admit that, being out in corporations each day, I make the assumption that since performance of people is discussed, that it is also being discussed with them. Clearly, that is an incorrect assumption. This comes back to haunt the organizations when difficult decisions need to be made and there is no solid foundation upon which to make and carry out decisions based upon performance.

Pleased to know that in these precarious times, your situation looks to be ok.

[Steve Roesler]

Hi, Marsha,

One would have to think that this is being played out in numerous organizations of all types. The short-term legal costs and retention of poorer performers certainly don't add to their ability to move ahead when things are already challenging.

[Steve Roesler]

Joanne,

You raise another important element: quality and accuracy of performance reviews. Organizations whose reviews are allowed to include only happy talk vs. straight talk still end up in the same situation.

For those of us who spend much of our time in this area--internally and externally--the hope would be that today's scenario will be painful enough to bump up the game when it comes to accurate reviews.

Thanks for bringing your experience to this one...