As the person with the CIO job, it’s your responsibility to stay on top of the quality of the employees that you have working in your IT department. In most IT departments this means that at least once a year you will have everyone engage in an evaluation process. During this process each worker will be ranked based on their value to their team and to the company. This sounds like a valuable thing to do, but what happens when a member of your department receives a ranking that they don’t believe that they deserve?
The Problem With Employee Grades
Let’s face it, there is something inherently attractive about assigning an annual grade to each and every employee. I guess there is also the argument that “this is the way that we’ve always done it”. Just in case you are not sure what I’m talking about, at most companies every year during the annual review process a score is assigned to each employee. Generally this is a number from 1-5 or some sort of phrase such as “meets expectations”. These scales often run from “outstanding” to “improvement needed”.
This system, although easy to implement and to run, can cause some serious problems in an IT department. Specifically, employees that receive a ranking of “successful” which is often the second-lowest label then to have their morale deflated. This can be a real problem when up to 70% of your department receives this ranking.
Another problem that CIOs face is that how such rankings are given out is not necessarily consistent throughout the department. Who your manager is can play a big role in what ranking you receive. If a manager is worried that one of their employees might leave, they may give out higher rankings just so that employee will get a bigger bonus and will more likely end up staying. Likewise some managers may just give all of their employees average ratings because that is the easiest thing to do. When things like this happen, there is a very good chance your staff is going to complain and tell you that the rankings don’t paint an accurate picture of the department.
Is there A Better Way?
Given all of the problems that this ranking of employees method causes, you would think that there would have to be a better way to go about doing this. The good news is that there is a better way. The bad news is that it requires a change in outlook for a CIO to be able to switch over to it.
Companies such as Microsoft, Gap, and Adobe have all done away with the employee grading system after they determined that it did more harm than good. These firms decided that grading systems deterred collaboration and just ended up making their employees more anxious. Companies that have gotten rid of employee grading systems are reporting improvements. Specifically, their IT employees feel better about their jobs and will often end up listening to what their bosses tell them during performance review meetings instead of focusing on what number they are going to receive.
Firms that do away with employee grades see a number of different benefits. Employee’s willingness to collaborate with other employees goes up. Employees are also willing to take more risks because they know that it won’t impact their annual grade. A better way to evaluate employees seems to be to have monthly coaching sessions coupled with more opportunities for employees and their bosses to have discussions. This approach provides managers with the information that they need about employees without destroying morale.
What All Of This Means For You
As the CIO, you have an obligation to know who you have working in your IT department. Some of your workers will be talented, perhaps some are not so talented. You would like to be able to determine who your best and worst workers are. This way you could work to retain your best and not worry so much about your worst. Many firms rank their employees on a 1-5 scale each year. It turns out that this may not be such a good idea.
The problem with an employee grading system is the impact that it has on your employees. Those who are not ranked the highest tend to have their morale become deflated. They start to not be willing to collaborate with other employees. A better way of accomplishing the goal of getting to understand your employees is to have monthly coaching sessions coupled with more opportunities for employees and their bosses to have discussions.
As CIOs we need to understand that although understanding who we have working for us is important, how we determine that can have an impact on our department. This means that we need to be very careful to not implement systems that will cause our employees to start to not be willing to work together. Instead, we need to do away with grading systems and find better replacements for them.
Question For You: Should you get IT department employees input before you get rid of your employee grading system?
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What We’ll Be Talking About Next Time
The job of a CIO is to make sure that everything works “just right”. If we have a nightmare it’s that the systems that we are responsible for suddenly just stop working just when everyone realizes the importance of information technology. As they sit around waiting for us to fix things, we frantically run around trying to figure out what went wrong. That nightmare become a reality for CIOs recently when the pricy Bloomberg terminals that traders use to conduct business experienced an extended outage.