I'm about to embark on (late) 6 month reviews with the team.

I've listened to all four Performance Appraisals podcasts and am planning on re-structuring the appraisal system to follow M&M's structure.

However I have two issues;

a) All of my team are performing 'OK'. Nothing bad and nothing particulalrly 'wow', just 'fine'. I dont want to have a core message of 'Keep up what you're doing' as that sounds wishy washy. Any suggestions?.

b) The business, whilst still very profitable, is down year-on-year by around 10%. At new year appraisals I told the team that there would be no pay rise due to reduced company performance last year (we have had annual increases every year previously) but that it would be reviewed in 6months (ie now). They are all performing as per their job description and thus could argue they are doing what is asked of them so 'where's the increase in pay?' I have one guy in particular who we dont pay that well who keeps asking about money in his O3.

Adding additional cost, through pay rises, onto a reducing bottom line doesnt make business sense, but I sense the negative motivational issues that will arise if it's still no rise.



AspirationM's picture

I'll open with "Take this with a grain of salt" as I'm an aspiring person (0 experience, just being frank), not currently a manager.  But here are my thoughts.  First thing I'd do? Ask yourself a few questions:

Can you even offer it realistically?  If your budget can't support it there's no choice.  If it can move on to question 2.

If so, does your gut as well as the facts (but that can be looked at after you go through the rough view) tell you any/all deserve it?  Or are they simply expecting it and you're anticipating the backlash from another no?

That should be enough to give you an idea on what you probably should do (though I wouldn't personally commit to it just on that gut feeling).

As for how to approach a no discussion (I imagine there won't be issues if you say yes) I'll say this:  Do all you can to re-frame a negative conversation into a positive, future oriented one.  If they want raises and you can't give them one based on the now, explain why you can't.  Then help them figure out an effective 'how' for them to make it happen next time.  People wanting more money doesn't seem like it's really all that bad a thing.  It's part of what drives us all to do and learn more, which lets you get more out of your people. 

Also, if it was me, I wouldn't be afraid to take a bit of a bullet in the conversation, either.  "The last time we talked about this I forgot to do something important.  You have goals, and I told you we'd reassess in a few months.  I failed to help you achieve them by providing direction, and I apologize for that.  All I can do now is move forward and fix that.  I'm going to do all I can to help you justify what you want so you can get it."  Bonus?  If they take it to heart that later raise could come in the form of moving up, and even if not the approach could impact that 10% in a positive way.

Again, grain of salt, I'm just going with my gut here.

Tom Green's picture

Hi Phil. 

First, having all ok performers and no performance issues is a blessing.  Sure, would be nice to have a superstar, but no poor performers is great.  Regardless of where they are ('just fine' being good), that should be praised.  But also challenged. 

Can you paint a picture of what a superstar would look like, what she'd be doing?  Then, what is the gap between your people and that vision?  That's what your team should receive as feedback.  Then, with that in mind, what are the differences between the team members?  Tailor your praise of the 'just fine' on each individual's strengths, and your recommendations for improvement on their weaker areas.  Guideposts are balance (praise and challenge) and the focus (no more than 3 challenges, and 5 areas of strength).  If you find 10 gaps between superstar and 'ok' you can pick one to three to share as a challenge with each person.  And it doesn't go 'you stink at...' but more like 'your performance is really good in these areas, you can improve by..." 

Sometimes it helps to think of a career ladder.  What differentitates people on the lower and higher rungs?  Where do your people truly deserve to be (regardless of their title or pay, often that has more historical baggage than any tie to reality).  And then, critically, what is it that they need to do to get to the higher rung? 

It also helps to find the win-win-win here.  What does the company want from your team that they are not getting?  What does each individual on your team want from their career in the next 6 months to 2 years?  You do know the answer to those two questions I hope.  Then tie in what part of their performance that is holding them back (and what part is making it a breeze for them).  Making them see the benefit for the company and their career in tackling and improving on their performance challenges is key to getting long term committed effort at change. 

On your second part, I think AspirationM was spot on.  Good thing your only promise was to re-evaluate in 6 months.  Time to share your re-evaluation as you promised.  If it is still "no raises for you, sorry" so be it.  But if you think you need to go to bat for them, then the performance reviews should also help you frame the argument with whomever will approve the raises why it is deserved (praise) and what they'll get (challenge).  

Good Luck! 

ChiffaN's picture

Hi Phil!

My cents on the issue, but bear in mind, I'm a bit biased myself as we have had no raises for the last 3 years in the whole company (I currently work for a global Tier-1 Telco equipment manufacturer) due to "poor corporate performance".

I would start my thoughts on the following question:

What is the cause of business being down year over year? Is it competition? Not good enough performance? Poor sales? Finally, have your directs influenced the business being down 10%?

If the answer to the final question is "Yes", whilst the team has been performing adequately, than, begging your pardon, the blame lies with you. You should've set more aggressive goals for them.

In this case my advised course of action would be - re-assess their goals and agree new and more aggressive goals that will help your company get back on track and justify the pay increase in half-a-year provided they meet the goals.

If the answer to the question was "No" and you realistically CAN afford the pay rise - I would opt for it, at least a little bit.

It's important for people to feel they are not left behind by the company. Remember, with things life inflation even you're not literally cutting their salary it's real buying power decreases every day. And it's very easy to fall into the habit of saying no hiding behind "poor corporate performance".

As a final thought I advise watching the following excellent video for some thoughts on keeping your people happy via non-money stimulae. Just remember that the key premise is "once the money issue is off the table", meaning you should pay your people at least "enough".

superjac's picture

My last company had a similar situation. I was in the position of passing down the "no raises" notice, as well as getting the same speech from my manager. I got that for four years.  After the first year, some of my people were granted increases, initially in the form of a year end bonus, and later as a raise. Sadly, it was just 1-2 of the 15 people in the company, and those same 1-2 were constantly getting rewards while everyone else waited thinking they were saving the company in hard times. 

I struggled with two questions:

1) At what point are we actually costing them money? My owner would say, "People don't deserve more money for showing up everyday and doing their job," but inflation is a real thing. He was too frank about this outlook, and it was demotivating for everyone. 

2) Just what does someone have to do to get a raise? As manager, I couldn't see how my top performers got recognized year after year, but I somehow got no credit for that.  At my previous job, I wanted a raise. I went in on the first day of the new year, and I said, "I'm looking to get an 8% raise this year, so I would like to set some goals that will drive that decision." When review time came, my boss told me I had met all my goals but didn't earn a raise beyond 1.5%. I left that company.

I know we should keep developing our top performers, but in my case it felt like I was cutting of my nose despite my face. Only my top 1-2 wanted to stay since the others weren't seeing any rewards. If I wanted to cut staff, it was a great way to do it.

Personally I think 3 years is the most you can go without recognizing inflation in the form of a raise. It doesn't have to be a large increase but a recognition. 

Additionally, I think each employee needs specific actions that would get them to a real raise, and you might want to be frank about what "real raise" means, something between 3-8%?

When my lowest paid employee (works in another country whose currency has risen sharply compared to the dollar) requested a 20% to make the same money as last year, I couldn't do it. However, I sat down with him and wrote the proposal with blanks to be filled in that I would take to management to get it next year, though I didn't promise 20%. We had a frank discussion about the unlikelyhood of a 20% raise . Then I gave it to him to make it happen. 

PoL's picture

Thanks to all for the input.

I actually ducked out of the difficult salary decisions and gave most of the team 'a little' with a promise of review - subject to them hitting appraisal targets. Thanks for that suggestion.