A few days ago, we shared about how to set KPIs, emphasizing that as a manager, you should never set unattainable goals for your subordinates. Otherwise, during the annual review, even if your subordinate works very hard but fails to meet the goal, you will be faced with a very difficult decision: whether to give the subordinate a full bonus? At that time, in the comment section, many readers further illustrated this situation with their own experiences. But one friend said that as a manager, he encountered a problem when implementing his company's "271" performance review principle, which I think is very representative. What problem? It is that during the annual review, some managers are very conflicted. They are conflicted about whether to give low scores to subordinates who did not meet their goals according to the "271" principle. As a new manager who grew from an employee, he is embarrassed to give low scores to subordinates who did not meet their goals. He wants to help such employees achieve their goals in the second year. Is his approach reasonable? Of course not. This approach seems to take care of the face of employees who did not meet their targets, but in essence, it is unfair to those who did meet their targets. This may be a common problem for new managers who have not received systematic training and have just grown from employees to managers. So I think this kind of conflict is very representative. So how should annual reviews be conducted? What is the "271" principle? -01- Not Only Look at What Was Done But Also How It Was Done When doing annual reviews, many people understand it as assessing the goal commitments made at the beginning of the year. For example, the sales department committed to a target of 30 million. By the end of the year, did they achieve it? Of course, these need to be looked at; this is a very important part of the annual review, but it is not the only part. When conducting the annual review, you assess whether the subordinate achieved the goal commitment made at the beginning of the year. What are you assessing? You are assessing what the subordinate achieved this year. In fact, there is another very important point: you need to assess how the subordinate achieved it. Did he use any abnormal means to achieve it? When he did it, did he consider the interests of other departments? Did he collaborate with others? "How it was done" is the most important. Why? Because if he achieved a result through abnormal means, then next year or the year after, the result may not be the same. Therefore, you must not only look at the result, but also how he achieved it. You also need to compare this result with others. He did well, but others also did well; everyone did well. What does this show? It shows that his good performance may not be due to his ability, but because the market environment was good. If everyone did poorly, and he did poorly, it is not because he lacks ability, but because the market environment is bad. Excellence is relative, so you must evaluate all these factors together. -02- What is the "271" Principle How to evaluate together? What is the evaluation standard? As mentioned at the beginning, many large companies follow the "271" principle when evaluating. What is the "271" principle? Alibaba requires every employee to participate in the quarterly and annual "KPI + Values" dual assessment, and department heads must evaluate all employees according to the "271" performance assessment principle. The "271" performance assessment principle divides employees into three tiers:
1. Employees who exceed expectations: 20% of all employees.
2. Employees who meet expectations: 70% of all employees.
3. Employees who fall below expectations: 10% of all employees. At Alibaba, the 20% who exceed expectations should be immediately rewarded or promoted, while the 10% may be eliminated. This performance assessment principle is very effective, and many companies use it. So how exactly should you score and evaluate? Take Microsoft, where I worked for 13 years, as an example. The first category, the 20% who exceed expectations, we call A-level employees at Microsoft. What does A-level employee mean? It means particularly outstanding employees. What does outstanding mean? Meeting the target is not outstanding; exceeding the target and achieving unimaginable results is outstanding. If he committed to 30 million and finally achieved 60 million, that is outstanding. If he committed to developing one new product and produced three, that is outstanding. For such employees, at Microsoft, we give them a score of 4.0. Then, from those who score 4.0, we select a very few who can serve as role models for employees, and we give them 4.5. The second category, the 70% who meet expectations, are called B-level employees. What is a B-level employee? He meets most or almost all of the requirements, meaning he completed the indicators he committed to at the beginning of the year. Completing the indicators does not earn a 4.0; completing the indicators only counts as passing. Completing the target only earns a score of 3.0. From those with 3.0, we select some promising employees and give them 3.5. In actual work, some employees treat completing the target as the highest requirement. If they do not complete it, they think, "Although I didn't complete it, I got close, and I did very well." This is not enough, because our goal setting is that 80% should be completed. So completing the target is expected. When an employee treats completing the target as his psychological ceiling, that employee is not worth promoting. The remaining 10%, we call C-level employees, meaning employees who did not meet the work requirements. When a company adopts the "271" principle, it must require that 10% of employees are C-level. What does that mean? If you manage 10 people, then at least one of these 10 must score 2.5, and at least one of the 10 is considered lagging behind. If an employee receives 2.5 for two consecutive years, under Microsoft's "271" principle, he is forced to leave; he is eliminated. -03- Don't Leave Difficult Things for the Last Moment But, as in the case at the beginning of the article, new managers without systematic training are particularly reluctant to give low scores to subordinates. They feel that they see their subordinates every day, and after giving a low score, how will they interact with the subordinate in the future, and how will they assign tasks next year? When communicating with employees, they say, "You are doing well, keep it up. Everything is fine. Keep going." and so on. In fact, this is a particularly irresponsible behavior. Once at the end of the year, the company requires that 10% of people receive 2.5, and a red card must be issued. Then the manager feels uncomfortable and is very conflicted: Who should I give it to? In the end, he gives it to one of the subordinates. Then that subordinate is particularly confused: "Boss, didn't you say I was doing well? Why did you give me a red card at the end of the year?" Some managers are even more irresponsible at this point. They say: "I actually think you are fine, but the company requires it, there is no way. This year it's your turn. It's okay, it takes two years to be eliminated, next year it won't be you, don't worry." What about this kind of manager who is a "nice guy" all year round and "passes the buck" at the end of the year? This is irresponsible. This is definitely not what a qualified manager should do. So what makes a qualified manager? You must constantly train yourself in a certain ability. What ability? If you really think there is a problem with what your subordinate did, you must tell him: I think you did this poorly, why it is poor, I hope you improve, and I suggest how to improve. This is what you should do as a manager, and it is your most basic job. Even, I hope that after giving an employee a 2.5, he can still be grateful to you. Let him feel: "Boss, you have no prejudice against me. I am like this. I think I should improve. Can you help me?" This is what an excellent manager does. Never leave those difficult things for the last moment. -04- You Are Right and You Care for Him Some people might say, how is that possible? I gave my subordinate a low score of 2.5, and he is still grateful to me. If he doesn't hold a grudge against me, I would be lucky. This depends on whether, as a manager, your subordinates love and respect you, and whether they recognize your decisions. You are right and you care for him; this is a supreme power. Let me give another example from Microsoft about annual reviews. At Microsoft, after the brutal 271 annual review every year, we also do something called a calibration meeting. This meeting may be the most painful meeting of the year. What does it mean? It means that managers sit in a large conference room and start arguing. Why? Suppose your company has 100 employees, and you put these 100 employees on a line to see who is more important than whom. Then, at the most critical dividing points, that is, the 20th and 21st people, and the 90th and 91st people, their results will be completely different. So these managers sit in the large conference room. Suppose I am the head of the technical department, you are the head of the sales department, and he is the head of the administrative department. The three of us sit together and argue over the issue of who should be above and who below between the 20th and 21st people. "Why is your person ahead? My person is more outstanding than yours." At this time, a good manager shows his value. A good manager will definitely fight for his employees' interests at this time, fight desperately for his employees, and argue desperately. You can also clearly see what some bad managers do. They say, "Boss, you say he is not good? I have long thought he was not good." This kind of manager cannot gain the love and respect of employees. He never fights for employees' interests; he only fights for the security of his own position. This kind of manager is not worth keeping. -05- Spend Your Energy on Turning B-Level Employees into A-Level Employees After the calibration meeting, is the annual review over? Yes, it is over. But, as a manager, I hope that when you plan for the next year, you think about what your focus should be. As in the case at the beginning of the article, as a manager, you might think about helping C-level employees who did not meet their goals improve and achieve their goals in the coming year. The intention is good: to help subordinates grow. But I suggest you not spend your energy on turning C-level employees into B-level. The C-level group is already small. You should focus your main energy on the largest group. C-level employees should be made to recognize their own shortcomings and be given room to improve. But if they really cannot improve on their own, C-level employees should be eliminated. This may sound cruel, but by eliminating C-level employees, you can continuously bring in fresh blood and promote the company's talent cycle. So what should your focus be? The energy you should really spend is on turning B-level employees into A-level employees. Because B-level employees already meet the company's requirements and have completed basic performance. So can they do a little better, exceed a little more? What is the state of a good employee? A good employee is one who, after you give him a requirement and he achieves it, feels, "Why did the company set such a low requirement for me?" At this time, you need to give him a higher requirement, and he will do even better. This is the state of a good employee. You must constantly demand more from B-level employees, give them higher requirements, and help them exceed their goals to become A-level employees. So, you should spend your main energy on this. What about A-level employees? A-level employees, you don't need to spend time on them. A-level employees are self-motivated; A-level employees charge forward on their own. Final Words Finally, 2019 is about to pass, and many companies are starting their annual reviews. Today, I boldly share 10 heartfelt words with those new managers who have grown from employees, hoping they will inspire you. 1. Never set goals that are too high; a goal that 80% of employees can achieve is a valuable goal. 2. During annual reviews, you should not only look at what your subordinates achieved, but more importantly, how they achieved it. 3. Employees who meet their goals are B-level employees, just "passing"; those who exceed their goals and achieve unimaginable results are A-level employees, "outstanding". 4. Employees who treat goals as their upper limit are not worth promoting. 5. Managers who are "nice guys" all year round and "pass the buck" at the end of the year are unqualified. 6. Don't leave difficult things for the last moment. 7. Managers who only consider their own job security and not the interests of their subordinates, and cannot gain the love and respect of their subordinates, are not good managers. 8. To gain the love and respect of your subordinates, you must be right and care for them. 9. Don't spend your main energy on turning C into B. 10. Spend your main energy on turning B into A. Finally, I still want to congratulate you on growing from an employee to a manager. Congratulations on starting to have subordinates, leading a team, scoring subordinates, conducting annual reviews, and taking on greater responsibility. I hope these 10 heartfelt words and 10 suggestions can help you, let you take fewer detours, and lead your team through wind and rain, forging ahead. Let's encourage each other. Source: Liu Run (ID: runliu-pub) Tips will be paid 400-2000 yuan once adopted.