Joseph Grenny is author of three bestselling books, Influencer, Crucial Conversations, and Crucial Confrontations.
Dear Crucial Skills,
Our company has a review policy called the 70/20/10 rule. This means that 70 percent of my staff must be rated “Meets Expectations,” only 20 percent can be rated “Exceeds Expectations,” and worst of all, 10 percent must be rated “Needs Improvement.”
I find this rating system unmotivating and unfair for many obvious reasons. Specifically, at the present, I don’t have anyone I’d describe as “Needs Improvement.” However, I must come up with two people to fit this category.
At the other end of the spectrum, more than 20 percent are exceeding expectations and deserve commensurate rewards—yet I must arbitrarily leave people out so I don’t exceed the quota.
I raised my concerns over this policy but was told I should always be able to find 10 percent who “Need Improvement.” This seems like a losing battle, but I’d like to encourage the decision-makers to rethink this policy.
I find the performance appraisal system you’re describing to be as unjust as you do. However, I believe it was designed to address an even more egregious injustice.
Forced rating systems have been imposed on managers for decades because managers were failing to manage. The heart of good management is the speed and effectiveness with which managers hold crucial conversations. However, they typically put off holding crucial conversations for many months and, even when holding them, tends to gloss over the most fundamental messages.
I believe that forced ranking systems have been imposed on managers primarily because senior leaders believed that, without the compulsion of these systems, managers would continue to shrink from their responsibility to deal candidly, ethically, and professionally with performance problems. Managers are now being governed by unjust systems because so many failed to exercise ethical and leadership responsibilities in addressing performance problems willingly.
Now, with that said, most system responses to behavioral problems are doomed to fail. They produce unintended consequences of the kind you describe. They are brute force solutions to entrenched influence problems. Those familiar with our work on influence know that problems exist because there are six sources of influence that are perfectly aligned to produce the negative results you’re experiencing. To change those results, you must affect four or more of those sources of influence—nothing less will do.
Okay, soapbox aside, here are some thoughts as you decide how to be an ethical manager, a loyal employee, and a decent human being at all once.
1. Keep the spirit of the law. Given that the 70/20/10 system’s intent is good, first make sure you are not fooling yourself about the quality of your team and are stepping up to crucial conversations scrupulously—both in the interest of your organization and in the interest of your team members. You lose the moral authority to claim there is a “better way” than the 70/20/10 system if you aren’t an example of that better way yourself. For example, if you conclude that 40 percent of your team is in serious need of development, you should acknowledge that just as honestly as when you believe 40 percent deserve a rating of “Exceeds Expectations.”
2. Choose only from ethical options. When considering my options in confronting value conflicts in organizations, I distill them down to three. I can quit, stay and accept, or stay and influence. In other words, I could conclude that I would be a hypocrite to stay in an organization whose practices so conflict with my values. If you take this option, I’d suggest you use your exit as an opportunity to exert influence. In a clear and respectful way, detail what you admired in the company and all of the reasons you are reluctant to leave. Add your concern with this system and the inequities it made you participate in. One strong and clear voice like this can be remarkably effective at influencing change. It may not happen overnight, but it can plant seeds of doubt that spur reflection after you leave.
Second, you can stay and accept the circumstances. The only ethical way to do this is to decide to loyally fulfill your duties, even though you personally disagree with the system. If you stay in your current position at this company, carry out the 70/20/10 system as you are bound to do, and avoid badmouthing the system or the leaders who choose to continue with this program.
Third, you could stay and influence. You could, for example, decide that you are remaining only contingent on your success at influencing the system. If you do so, you must do so under the same ethical terms as the previous option. You must carry out the spirit and letter of your management duties. But at the same time, you can make your best effort to influence change. If this is the approach you take, I’d suggest a time limit to your efforts so you don’t become the angry rebel and waste your professional efforts in a lost cause.
If you choose to stay and influence change, here are a couple of options you could consider:
1. Invite study. If you have influence with HR or senior leadership, attempt to invite them to study the effectiveness of the 70/20/10 system rather than simply criticizing it with anecdotes. Honestly share your concerns with some of its effects, but also express openness that further study may convince you it’s the best approach. Encourage HR to declare what “dependent measures” they believe will be positively affected by the employment of the system, then study over time whether or not better results are following. It’s likely you’ll find that the system did produce some worthwhile effects—which will help you make recommendations more useful than just “throw out the bad system.”
2. Teach influence. As I mentioned earlier, the intent of the system is to influence managerial behavior. Our research into the six sources of influence is often a very effective way to help leaders see the limited success of their “single source” influence strategy. Share copies of Influencer: The Power to Change Anything with key leaders and attempt to engage them in reflecting on its application to managerial behavior in your organization.
I applaud your desire to do right by your people and your company and wish you the best as you make this crucial decision.