Performance Review

The company has what I imagine to be a fairly normal compensation philosophy, but one which is counter-productive for both the company and the employees.

Every year each employee fills out a long (and rather tedious) form regarding their goals for the upcoming year. This can include things like decreasing line shrinkage, completing a funding proposal, completing documentation, doing audits, or managing a project. Everyone’s job descriptions are different and thus their goals are unique. Then, for each of these, the employee sets benchmarks for what is below average performance, vs average vs above average vs superior. Managers vaguely look over the goals and sign off on it. Once the year is completed, each employee does a self-evaluation and then meets with their boss for a performance evaluation, where ideally the boss and the employee will reach an agreement on how the employee performed. Once the entire department has been evaluated, the boss divides up the possible salary increase. The company will set a certain percentage, say 3%, as the average compensation increase. A department manager then has to make sure their department increases average 3%.

The problems with this system are numerous and probably detrimental to the company. The first problem is obviously that the employees are in competition with each other. Within a company that relies upon collaboration and team work, having employees compete for a raise cannot be good for working relations or morale. The second problem with this system is that it encourages safe goals. If an employee wants a good performance review at the end of the year, they are likely to make their normal behavior an above average benchmark. Safe goals are bad for the company, as no one is encouraged to take risks and stretch themselves, resulting in a middle-of-the-road, unexciting company. Lastly, this system penalizes the honest. If an employee goes into a performance review with an honest evaluation of themselves they should not only argue in places where it is to their benefit, but also places where it is in their detriment. It makes a mockery of the whole system for an employee to receive a high evaluation where they don’t deserve it, while not helping the company identify opportunities for improvement.

I had my performance review this week and couldn’t stand for inflated marks where I didn’t deserve them. There were times when I argued my boss up some points, but there were also times when I argued for a lower score. This obviously took him by surprise, but it doesn’t help the company and it doesn’t help me to have inflated scores. On the other hand, it likely hurt me in the long run, with my compensation increase being lower than it should be. I’m torn by my actions, because although I know they were right, I also know that they were stupid from a business perspective. If being business savvy and being honest conflict, is being business savvy worthwhile?