Managing employee expectations
Most discord is the result of unfulfilled expectations. This bold statement is Shakespearian in its origin and represents one of the unavoidable truths that govern employee-employer, individual or family relationships.
In short, when an employee or a stakeholder expects one thing, and then is disappointed with a lesser outcome, trust and understanding will suffer. This is a subject that we often broach or otherwise discuss when addressing the subjects of incentive pay and compensation or relations amongst the stakeholders within a family business. Today I will focus upon the broad issue of matching rewards with employee expectations—to assure positive outcomes.
How many times have you heard the following from an employee or group of employees:
- “What do you mean I am not going to get a raise this year?! I have always been told I am an excellent performer.”
- “How is it possible that members of my sales staff are earning more than me—I am the sales manager?”
- “What do you mean the company did not make enough money this year, and there will be no annual bonus? Someone said we actually earned more this year than last—and I got a $15,000 bonus for that. Is that true, and what do I tell my spouse about the swimming pool?” [in the words of Clark Griswold]
- “How come Joe got that promotion, instead of me?”
- “You did not tell me that I was responsible for growing sales by 15% this year, now you are telling me that only 10% growth means I get no bonus!”
- “You told me that I would earn more than any member of our key-competitor’s sales force. I am not. What gives?”
- “It’s April and I am not earning what you suggested I would earn by this time in the year.”
- “You have always treated me fairly in the past, why not now?”
Do you recognize a situation above that has also caused some angst within your organization? If so, look at the two common threads shared in most of these statements. First, the employee did not get what they believed was promised; and second, the employer understands the promise-to-be-met quite differently. Of course, in the last statement the train seems to have fully come off the tracks for unknown reasons—the manager asks: “What did I do (or not do)?”
In any event, there is actual or brewing trouble with regard to the employer-employee relationship that needs to be fixed or reversed fast (if fixable, at all). Were these misunderstandings and disappointments avoidable? In 99% of cases the answer is a resounding yes.
What can an executive or manager do to avoid this type of future trouble? We suggest the use of four basic and simple rules to establish clear understanding between employer and employee. This simple four-step strategy that can be used universally or selectively:
- If you are promising something (especially anything that will result in a payment), put it in writing. In fact in some states, written agreements have now become mandatory—so know your local laws.
- If you use metrics or performance standards to determine bonuses or incentives, frequently report monthly or YTD results for everyone involved to see. For broadly-based “profit-sharing” bonuses or programs, report key results to everyone in the building.
- Be honest and open with your employees regarding their performance and how you see it. Are your annual performance reviews just a feel-good exercise for delivering a raise and a smile on both sides of the table? If so, trouble is lurking in your future—and you should have the phone number of your labor counsel handy. If an employee is not doing the job you expect, tell them now and tell them again until you are sure the message has gotten through.
- Be clear with your managers and staff regarding how you will determine and deliver their compensation. Be prepared to share both the whys and hows.
Notice that the common characteristic of each above prescription includes the phrase “tell them” in it. Further, notice that you control the information and facts. There will be little room for rumors or inaccurate interpretations of fact (or fiction). I have never seen an executive or manager hurt by over communication with their staff.
And finally, if you sense that your team or staff harbor basic misunderstandings of fact or intent that will lead them to future unreasonable expectations, trust your “gut” because you are probably right. Act quickly and get out in front of the problem. Assure everyone is on the same page before the situation potentially explodes—all over both of you. You truly have nothing to lose.
So when in doubt, tell them.
Wilkening & company has assisted clients for over 30 years with setting, meeting and rewarding employee and stakeholder expectations. Having trouble aligning expectations with reality. Give us a call at (847) 823-5090.