It’s an unfortunate but undeniable truth: talented employees don’t always make successful managers. However, in many industries, strong performance records often result in promotions into management roles. On its face, this move makes sense... but just because someone excels at sales, for example, that doesn’t mean that they have the skills and inclination to oversee a team of reports.
The Harvard Business Review examined promotion practices at various companies and discovered some incongruities between the people who are elevated into management roles and the skills displayed by these professionals. Based on the research, these four signs may indicate that a new manager has been promoted beyond their competence level.
Harvard’s research centers around a concept known as the Peter Principle, which suggests the following: “If organizations promote the best people at their current jobs, then organizations will inevitably promote people until they’re no longer good at their jobs. In other words, organizations manage careers so that everyone rises to the level of their incompetence.”
HBR uses the sales industry as a prime example of the Peter Principle at work. High-performing salespeople have a 15% higher likelihood of receiving a promotion into management than their less-successful compatriots. However, according to Harvard, “sales performance is actually negatively correlated with performance as a sales manager: when a salesperson is promoted, each higher sales rank is correlated with a 7.5% decline in the performance of each of the manager’s subordinates following the promotion.” The skills that make someone an effective salesperson don’t result in strong management aptitude, so using job performance in sales as a metric for selecting managers will culminate in a bunch of new supervisors who aren’t suited to their roles.
In well-operated workplaces, promotions come with pay raises. However, if your workplace promotes high performers without offering them more money, they may be using these title changes as placeholders rather than thoroughly-conceived decisions.
To avoid this problem, HBR has a recommendation: “Firms can reward top performers with pay rather than promotion. In our data, we found that firms with the strongest pay-for-performance also promoted the best managers. In other words, by rewarding sales performance with greater incentive pay, firms are free to promote the best potential managers. The best salespeople don’t feel they “have to” become managers in order to earn more money.”
Performance reviews are a crucial element of any workplace; employers must keep their reports aware of how they’re doing, and employees must use the information provided at these reviews to improve and grow. However, if a company doesn’t optimize its performance reviews, it may be prone to ill-advised promotion choices.
To get on the right performance review track, HBR advises companies to separate future potential from past performance. “One approach, embedded in evaluation regimes like the 9 box, asks raters to decouple evaluating future career potential from prior job performance. People who score highly on future career potential can be rewarded with a promotion to management roles and stock options to retain them until their potential can be realized. People who score highly on prior job performance can be rewarded with bonuses, promotions up an individual contributor track, or recognition,” HBR recommends.
In some cases, “manager” becomes a fairly meaningless title; if a newly-promoted employee is put in charge of a very small team with few responsibilities, then that’s a clear sign of tokenism. A better approach? “Promote the best candidates for the managerial job role, let them manage large teams, and isolate their managerial responsibilities from their individual contributor responsibilities. We find that when firms assign managers more responsibility over larger teams, firms are more willing to promote workers who are weaker in terms of sales but more likely to be effective managers,” says HBR.
This article was written by a Fairygodboss contributor.