Achieve organizational excellence through better performance management, strong leadership and talent, and a focus on personal development
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A blog post from a few years ago by marketing expert Seth Godin, titled The fruitless search for extraordinary people willing to take ordinary jobs, brought me back to a revealing boardroom conversation about executive pay.
Every organization has a “compensation philosophy” guiding how employee salaries, from the CEO on down, are set. In this particular meeting, we discussed the need to meet shareholder performance expectations and improve the organization’s talent pool. Then, almost as if forgetting the prior discussion, we reaffirmed our policy of targeting employee compensation at the market median – or, in simpler terms, the average.
We were doing precisely what Godin describes as folly: expecting above-average talent to deliver above-average results for average pay. Guilty as charged.
Reflecting on this conversation brought to light other ways organizations and leaders unwittingly undermine organizational excellence and effective performance management.
Overrating performance
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During a project to help a client fix their performance management process, we discovered the issue wasn’t with the criteria, forms, or system itself. The problem was with the ratings. The average performance score across the organization was an improbable 4.2 out of 5. Just 10 per cent of employees were rated as “meeting expectations” (a score of three), and no one was rated below that.
If the organization had been delivering exceptional results, this statistical anomaly might have been excusable. But it wasn’t. By rating everyone as exceptional, the organization reinforced mediocrity and achieved exactly what it deserved – average results. This flawed approach to performance management directly impedes organizational excellence.
Rewarding loyalty over performance
Long service, loyalty, and effort are commendable, but they shouldn’t be mistaken for excellence. Today, one of the most common reasons for keeping long-serving but underperforming employees is their institutional knowledge. However, we live in the information age, where knowledge management systems can store, access, and transfer institutional memory. Organizations need to rethink how they manage knowledge instead of holding on to employees who no longer contribute to organizational excellence.
The time for rewarding mediocrity with gold service pins has long passed. A commitment to performance and personal development should take precedence over tenure.
The pension trap
Defined benefit pension plans, once a cornerstone of employment at large corporations and government institutions, still have a profound influence on the workplace. These plans are a wonderful safety net for employees and a benefit to society, but they also discourage movement and keep people in roles they should have left years ago.
Organizations must recognize that such structures can stifle the growth needed for organizational excellence. If pensions keep employees who would otherwise move on, it may be time to rethink how retirement benefits are structured.
Average leaders don’t inspire exceptional talent
Talented employees gravitate toward talented leaders. Asking extraordinary people to work for average leaders is a surefire way to create a revolving door. Leadership and talent must go hand in hand. Exceptional employees want to be inspired, challenged, and engaged by leadership that matches their capabilities and ambitions.
Hiring exceptional talent as a strategy to compensate for weak leadership doesn’t work. Instead, organizations must prioritize building strong leadership teams that can retain and motivate top performers. Strong leadership and talent pipelines are essential for sustained organizational excellence.
Neglecting personal development
Personal development is too often treated as optional. Many organizations fail to foster a culture of continuous improvement, leaving employees without clear development plans or the tools to grow.
When asked about their development agenda, too many employees respond with, “Nothing really,” or “I haven’t discussed it with my boss yet.” Leaders who delay these conversations are complicit in this stagnation. Personal development should be a cornerstone of performance management, as it directly influences both individual and organizational success.
In today’s competitive environment, constant improvement isn’t just a nice-to-have – it’s a necessity. Continuous learning and development are essential to achieving organizational excellence.
The relentless pursuit of excellence
Creating and sustaining organizational excellence requires more than ambition. It demands exceptional people supported by strong leadership and talent, effective performance management, and a commitment to personal development. Former GE CEO Jack Welch championed the idea that exceptional performance is the result of relentless discipline, not luck or coincidence.
Welch’s example serves as a timeless reminder: achieving excellence is a deliberate and continuous effort. Organizations that want to thrive must abandon practices that reinforce mediocrity and embrace a culture of high expectations, personal growth, and strong leadership.
The path to organizational excellence is clear, but it’s not easy. As Jack Welch taught us, it’s worth the pursuit.
Rebecca Schalm, PhD, is founder and CEO of Strategic Talent Advisors Inc., a consultancy that provides organizations with advice and talent management solutions.
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