The WSJ today had an article on B1 that talked about how companies are attempting to get away from grading employees. You know, the ranking system which can use numbers, letters or simply “need improvement” or “meets expectations. In the story, they talked about how Intel had done a test with 1700 of its 105K employees. They omitted the ranking from this group and watched to see ho managers would react. According to the article, little changed. Managers still handed out raises to the top performers and generally things went on as before. When asked if they wanted to expand this to the rest of the company, Intel’s leaders weren’t ready to do away with labels. They said the were ‘concerned that forgoing ratings would “suck healthy tension out of the workplace”. In other words, they felt that competition with the threat of a low rating or the reward of a high one was what drove their people to succeed. They’re wrong (partly).
Studies of behavioral motivation shows that people are actually motivated by very different forces. Some, like sales people, want to win. Some, like many engineers, want to do better because they always want to be right. And some just want to be liked. For many employees, the rating system creates negative tension that hurts performance. The good news is that enlightened companies that train their managers in behavioral analytics find that they get better results from each type of person. That’s because they adjust their management style to fit the natural motivations of the individual.
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