A cynical person might describe Pay for Performance like this: Management pretends to have a bevy of rewards that are earmarked for top performers and employees pretend that their daily activities are aligned with corporate goals and that their performance was instrumental in helping the company meet them.
But I'm not cynical. Let's face it, it's human to want to put your best foot forward and 'Pay for Performance' has a much better ring than 'Punish Medicrity' or 'We Have No Money This Year But Thanks For All Your Hard Work.'
When I started blogging on human resources topics about a year ago the market was depressingly oriented toward automated talent management solutions, as if to supplement poor management rather than improve it. Kind of like treating the symptoms rather than looking for a cure.
What not many people seemed to realize is this: The key player in making performance management process successful is the manager, not the process.
A good manager is more than someone with decent social skills who does an acceptable job of consolidating team metrics. Heck, anyone can do that. A good manager:
...is someone who makes employees feel important and valued.
...motivates people to either take on more responsibility or else be satisfied with the responsibility they have, as needed.
...makes employees believe they are rewarded in accordance to their contributions, which is especially important when times are tough and there are no promotions or raises to be had.
In other words, a good manager is equally versed in the art of mentoring employees and stringing them along.
And with respect to the current economic situation, if you only have a tiny merit budget, you need even better managers. Kind of like you have to spend more on flattering clothes if you're overweight - if you're skinny you can look great in any old thing but if you like to hit the cake you need better clothes.
From a corporate point of view the quality of managers is the single most important thing you can get right.
Think about it: This is the person you are counting on to coax the best possible work out of average performers, motivate or identify and eliminate underachievers, and retain the loyalty and channel the creative energy of top performers.
And it goes without saying that managers also need and deserve good managers.
The good news is that today I see ample evidence that the attention of HR professionals is starting to shift to the manager. Every HR blog I visit seems to have something to say about the importance of good management. Which is great but it's only the first step.
The next step is answering this question:
How can companies do a better job assessing and developing the skills of their managers?