The best way to lose a high performer in your company is to:
1. Fail to recognize that they are a high performer
2. Fail to give them increasing responsibility and challenge
3. Make them work for a manager who is not a high performer
4. Fail to compensate them based on their exceptional abilities
Reviewing employee performance on a curve or imposing a forced distribution is controversial, but in my experience, it is important and necessary to win.
How can you expect to build and maintain a company that outperforms the competition if your team isn’t better than their team?
Of course, the implementation is where things get tricky. People decisions are always judgment calls, and this can sometimes go wrong. But that doesn’t mean the concept is flawed. It just means you need to strive for the best process that leads to those calls.
I spent countless hours in bi-annual Organizational Leadership Reviews (OLRs) at Amazon, discussing the performance of each person in the organization to accurately assess and calibrate ratings.
Once we identified our highest performers, we discussed the next steps to help them grow and develop, to take on more responsibility, and to compensate them more than their peers with lower ratings.
The point of business isn’t participation or learning; it’s performance. You can’t build a high-performance organization without a clear way to distinguish who is truly excelling from those who are not. That’s where the curve comes in. People say that it is unfair or that it fosters unhealthy competition, but it also creates an incentive to continuously strive.
If you want to reduce the quantity of a desired output (in this case, hard work and high performance), simply reduce the incentives to achieve it.
Equal treatment might feel good and equitable, but it doesn’t incentivize great work. If everyone gets an A, the grades become meaningless.
In sports, we don’t apologize for separating the minor leagues from the majors. Not everyone gets to play for the Yankees, and that’s okay. Business is no different. It’s about allocating the most important roles and opportunities to the people most likely to succeed in them.
The right move is to double down on the superstars and maintain the core. Low performers naturally consume more time, but that can’t become your default. It’s not fair to your top talent, and it’s not good for the business.
