I recently wrote about performance management and the abolition of performance reviews at certain companies. Then I read a Wall Street Journal article last week stating that one of Kimberly-Clark’s goals is “managing out deadwood.” So much for doing away with performance reviews at that company.
The article states that Kimberly-Clark has about a 10% total turnover (voluntary and involuntary), and that employees are expected to “keep improving—or else.” I don’t disagree with a focus on continuous improvement, and a 10% turnover is not excessive. Still, performance management and “managing out deadwood” are two different things in concept, if not always in the end result. And they have different consequences both from a legal and from an employee relations perspective.
From the legal perspective, talking about employees as “deadwood” can lead to complaints of age discrimination. See Herr v. Nestlé U.S.A., 2003 Cal. App. LEXIS 855 (June 12, 2003), described here.
Any indication that an employee over age 40 is past his or her usefulness is problematic. Of course, employees can be ineffective performers at any age, but the tendency at many companies that initiate performance improvement drives is to focus on employees who have been sitting around for awhile—and who tend to be in the protected age group.
From the employee relations perspective, it can be demoralizing to adequate performers to know that managers are snapping at their heels, that as soon as the worst performers are out, a continuous improvement drive will mean employees who are in the lower mid-tier are now at the bottom.
Yet a true continuous improvement program means there is always someone at the bottom. It’s not like one manager told me once, “We’re done—we fired all our poor performers last year.”
Despite my quip above (“so much for doing away with performance reviews . . .”), there actually is no disconnect between abandoning annual reviews and an emphasis on performance improvement. In fact, it may be easier to focus on performance issues with the more regular discussions between managers and employees advocated by such companies as General Electric, Adobe Systems, and others.
Whatever performance culture a company decides to adopt, the important thing is to train managers to handle it well, to avoid the legal pitfalls of only focusing on older low performers or others in certain protected groups, and to keep the emphasis both encouraging and disciplined.
Performance management isn’t about getting rid of deadwood. It’s about improving every employee’s performance—including that of managers.
When in your experience has a performance management emphasis caused legal or employee relations problems?