Few things can can impact workplace performance as negatively as a promotion system that fails to promote people based on their accomplishments. American society prides itself on being a meritocracy but in too many instances, existing promotion systems in both the private and upublic sectors do not promote the truly qualified. If a company’s “doers” are not properly recognized through promotions, bonuses, and other incentives, the company risks alienating them. If that happens, the company’s most productive workers will inevitably experience lower morale. Low morale among this indispensible segment of the workforce can spawn a costly “brain drain” when the company can least afford to lose its best and brightest. In order to avoid these problems, CEOs must pay close attention to their company’s promotion systems and ensure they are as meritocratic as possible.
Promotion systems were originally designed to provide upward mobility to those whose performance merited increased responsibility. The Industrial Revolution, accompanied by the labor movement and a concomitant democratization of society, brought about the career progression systems found in today’s large corporations and government bureaucracies. Theoretically, these promotion systems were designed to reward talent and performance in the workplace. They also provided workers with a means to ascend the organizational hierarchy if they followed the rules laid down by their management. However, as soon as these promotion systems were instituted, human nature began to take over as workers looked for ways to assure their own advancement.
Promoting the Right People and for The Right Reason
Many employees, seeking to advance their careers at the expense of their colleagues, “game the system” to favor themselves. They seek to curry favor with the boss through flattery or “face-time” or both. Bosses must continually be on the lookout for sycophants. They must uncover these self-promoters as quickly as possible, because their self-aggrandizing ways are not compatible with business success in an age that values cooperation and collaboration.
Ambitious employees also know what the important milestones in their desired career path are, and they seek to achieve them as rapidly as possible. If not held in check, employees will go through the motions of achieving these milestones without internalizing the knowledge they should be acquiring along the way. That can be bad for both the company and the employee.
While this is true for any training, it is especially relevant for those who have MBAs and similar top-level professional certifications. Managers should not be blinded by the purported qualifications a degree may impart. They must also assess an employee’s ability to get the important things done. In short, the employee should be assessed on ability to execute a strategy, not on ability to pontificate about one.
The Halo Effect
One of the most detrimental elements to the establishment of an equitable career advancement policy is what I will call the “halo effect.” The “halo effect” occurs when an organization continually promotes someone who achieved success early in his career, no matter how he stacks up against peers at the moment. Universities, the military, and some large corporations are notorious for employing the “halo effect” to help make promotion decisions.
Let me provide an example of the “halo effect” in action based on several true stories. A young university professor (Professor A) catches the attention of his dean, who likes what he sees. Professor A is promoted quickly to associate professor. A few years later, Professor A is being considered for promotion to full professor. By now, a new professor (Professor B), with similar credentials and a newly published book that’s heralded as a scholarly breakthrough (Professor A has not published one recently), has joined the university’s faculty. Nine times out of ten, Professor A will be promoted to full professor before Professor B. Why? Quite simply, Professor A was promoted early before and he is a known quantity; therefore, the reasoning goes, he’s bound to perform well as a full professor, so he should be promoted over Professor B, even if Professor B has made a more recent and relevant contribution to the department’s field of study.
How do you think Professor B feels about Professor A’s promotion? Chances are that while Professor A is pulling out the champagne flutes to celebrate his advancement, Professor B is looking for a job at a university that will make him a full professor. Thus, the university stands a good chance of losing Professor B’s talent to a competitor.
Similar situations exist in the military. In several of the services, there are opportunities for early promotion to some of the officer ranks. In the Air Force, for example, practically the entire cadre of general officers is drawn from the ranks of those promoted early to major, lieutenant colonel, or colonel. (It is now no longer possible to be promoted early to major.) Those who are promoted early to one or more of these ranks are automatically selected to attend the command and staff or war colleges. Those who are not selected for early promotion may still be selected to attend these schools, but the likelihood of their selection is comparatively diminished.
Attendance at both of these military colleges would effectively take an officer away from the fast-paced operations world for at least two years. In many cases that increases the operational learning curve for school graduates and mission accomplishment may suffer as they familiarize themselves with their new environment. Let’s see how this works in practice.
Colonel A is the prototypical “fast-burner.” He is an Air Force Academy graduate who served as a briefer to the top-ranking officer in the Air Force, the Chief of Staff. He’s promoted early to lieutenant colonel, selected for command (where he had a mixed rapport with his troops), then sent to school. He excels in the Air War College, does a tour on the Joint Staff in the Pentagon, is picked for colonel early, then command of a group and, then, a wing. Colonel A is well on his way to making general. At this juncture in his career, he may not even have any combat experience under his belt.
On the other hand, Colonel B was never promoted early and never attended any of the military colleges in-residence. He received his professional military education via distance learning. Yet, he was continually engaged in operational work from the start of his career. He also held several assignments on the Air Staff and the Joint Staff, the equivalent of working in key management roles at a corporate headquarters. Colonel B did manage to be picked for squadron command, where he had an excellent relationship with his subordinates. In the course of his career, Colonel B developed several key initiatives and led a key element in combat. Colonel B never achieved early promotion to any rank and, thus, does not stand a chance of being selected as a general, even if his operational performance was far more relevant than Colonel A’s.
What happens to Colonel B? Just like Professor B, he takes his talents elsewhere at the earliest opportunity.
Because bureaucracies have a hard time overlooking the “halo effect,” it becomes the manager’s job to look out for their operational stars and make sure they are rewarded for the jobs they do. To do that effectively, managers must not shy away from digging deeply to uncover those employees who can lead, who have the relevant operational experiences, who can implement a strategy, and who put the good of the organization first.
Reward Talent and Remove Deadwood
The same is true in private industry. Today, businesses are engaged in a war for talent. Opaque, “good ol’ boy” promotion systems will no longer work if a company wants to survive in an environment where talent goes where it is respected and rewarded. CEOs and other managers should be careful not to look at this world through the same eyes they used to assess their own careers. While many employees do not strive to be future occupants of the corner office, they still want to be rewarded for a job well done. Creating a promotion system that rewards performance when it occurs will go a long way to minimizing turnover in your most talented employees.
By the same token, promotion systems should strive to uncover and eliminate nonperformers from the company’s rolls. The deadwood of a nonperformer has no place in any organization. Nonperformers are often difficult to uncover, although a 360-degree evaluation system can help. Once uncovered, CEOs and managers should act quickly to remove them.
Linking Promotion System to Succession Plan
Finally, a company’s promotion system should be clearly linked to its succession plan. The current corporate leadership must find the people that are able to fill key positions as the world around us becomes more interconnected and transparent. The next generation of corporate officers will have to be more diverse, globally aware, and innovative than the current generation. That means the current generation of CEOs will have to work hard to pick the right talent to take their companies forward over the next 50 years. The old ways of promoting people are no longer relevant. If CEOs fail in this key task, their companies will become the Studebakers of the next generation.