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It’s Crucial to Base Promotions on Performance Metrics

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I was recently asked this question: Quint, what are your thoughts on people who are not achieving what the organization states are important objectives, yet are promoted anyway?  Digging deeper, I found out this question was not about hourly workers moving to first manager/supervisor positions, but about promotions for people already in leadership roles.

It is nothing new for employees to wonder why some promotions are made. If they already have a high degree of trust in senior leaders, they will give the senior leaders the benefit of the doubt. Unfortunately, the impact of the pandemic has reduced trust in most organizations today. That is why it’s so important to make sure promotions are justified by performance.

Another factor is the amount of transparency in organizations. In some industries, certain measures have always been transparent. It is not unusual for car dealerships to have a whiteboard with every salesperson’s name on it and the number of vehicles they sold that month. My grandson Cooper is in sales for a large company. Each week an email comes out with all the salespeople listed in order of sales performance.

The best organizations have clearly identified ways to measure performance. Authors Chip and Dan Heath state that 80 percent of achieving high performance is clarity in the measures needed to achieve it. Sales or revenue seem to be the items most noticed and, in many large companies, the ones recognition is most often based on. Then there are items such as expense management, net revenue, revenue growth, and so forth.

In today’s complex environment, other key measures are also seen as very important. Customer service as measured by a Net Promoter Score (NPS) is now very prevalent. NPS is how service is rated on a 10-point scale with 1 being the lowest and 10 being the highest. Scores of 9 and 10 are considered great promoter results. People who give 9s and 10s create great word of mouth.

For example, a few weeks back, my wife and I were in NYC for the wedding of Andrew and Stephanie, who are friends of ours. At the wedding reception, we were talking with Teri and Marci, and they mentioned that the night before they had attended the play Shucked, and it was great. Two days later, we were still in NYC, and we attended Shucked. We then told John and Sylvia, who were in NYC the next week, about the play, and they went. That is how a promoter operates.

A customer who gives a score of 7 or 8 is satisfied but will not promote a product, service, or organization. They felt the experience was good, not great. Those who give a 1-6 are termed detractors. These are people who will tell others not to use a service, product, etc. To figure the net promoter results, the 9s and 10s are added up, and the number of 1-6s are added up and subtracted from the 9/10 number. So, if 70 percent of the people rated the experience a 9/10 and 7 percent rated the experience a 6 or less, the NPS is 63. These are usually well-known results within a company.

Let’s say a company states that NPS performance is very important to the organization. They set a goal of an NPS of 65. Now let’s say a department is averaging a 50 NPS and has been for a while. Then that leader receives a promotion. In that case, the organization will need to be very specific about why the promotion was given. If not, the senior leader team loses credibility. Even better, let the leader know that until the department’s NPS is a 65, they will not be eligible for a promotion.

Another example is employee engagement. Today most good organizations have a method to measure engagement. They also have set targets to achieve; these often vary by the size of a department and other factors. So, when considering promotions, how much will a person’s employee engagement results impact the decision? For example, will someone within the lowest quartile in employee engagement get a promotion? What about the next quartile, over 25th but below 50th percentile? Is there a certain floor for a leader to stay in leadership?

These are not easy decisions. However, they are the decisions that separate high-performing organizations from the others.

Some suggestions:

  1. Decide what overall metric goals are key to the organization. There will be many goals throughout the organization. However, at the top, there should not be more than seven goals and many times even less than that.
  2. For each leader, set five to seven outcomes. Any more than that dilutes performance.
  3. Put weight on each outcome. For example, for one leader employee engagement may be weighted at 30 percent of their evaluation. For someone else, engagement may be 10 percent. This is based on the size of department and past results.
  1. Set a performance floor. If a leader’s metrics fall below the floor, they are not eligible for a promotion.

I get asked by senior leaders for ways to get the attention of leaders and make the point that “this is important.” The suggestions above are some of my recommendations.

Elite performance is not easy. It requires individuals who have high levels of drive and passion. Measuring and holding people accountable for achieving that performance is a challenge for us all. However, it is worth it. When we start to base promotions on metrics, we not only increase trust levels in our workforce, we create stronger, healthier organizations.

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Quint Studer
If you are interested in purchasing books or having Quint speak in-person or virtually, please contact info@HealthcarePlusSG.com.

Quint Studer’s Wall Street Journal bestseller The Busy Leader’s Handbook: How to Lead People and Places That Thrive is filled with tips, tactics, and need-to-know insights. It functions as a desk reference, pocket guide, and training manual for anyone in a leadership position. His newest book, The Calling: Why Healthcare Is So Special, is aimed at helping healthcare professionals keep their sense of passion and purpose high.

Quint is the co-founder of Healthcare Plus Solutions Group, a consulting firm that specializes in delivering customized solutions to diagnose and treat healthcare organizations’ most urgent pain points. He also serves as Entrepreneur-in-Residence at the University of West Florida, Executive-in-Residence at George Washington University, and Lecturer at Cornell University.