Differentiation Creep

Recognize This: No one wants to be “the bad guy” in performance reviews and differentiation.

Ever since “Neutron Jack” Welch popularized the “differentiation” approach to performance management in which employees have been segregated by their managers into performance levels of top 10%, middle 80%, and bottom 10%, people managers and HR pros responsible for them have tried to make differentiation work.

The problem for managers is trying to (somewhat) arbitrarily lump employees into these categories in a once-a-year effort to remember an entire 12 months’ worth of performance and achievements. The problem for employees is average and low performers don’t realize their performance is not exceptional.

The result? Differentiation creep. Workspan magazine (“Measuring Employee Performance the Right Way,” January 2011. Membership required.) recently published research showing:

“While high performers are increasing in relative numbers by leaps and bounds, there is also a depletion in the population of low performers.”

Why is this happening? Two reasons:

1)      Managers don’t want to make the hard choices of who appears in the bottom 10%, or they’ve truly hired well and none of their employees are poor performers.

2)      Managers lack enough insight into employee contributions to make correct differentiation decisions.

Are you seeing differentiation creep in your workplace? Before I share solutions on Wednesday, how do you solve differentiation creep? 

Also, don’t forget to tweet your tips for employee appreciation and recognition using hash-tag #appreciationtip to be entered to win a copy of the Winning with a Culture of Recognition eBook or Amazon Kindle pre-loaded with the eBook.