The Consequences of a Seniority-Based Promotion System

Upon entering the workforce, the goal is often to move up the corporate ladder.  That is done by receiving promotions within a company. An age-old debate among employers has been whether one should receive a promotion based on seniority, their time with the company or merit, their actions while employed.

While there are pros and cons to each promotional system, the benefits of promoting based on merit greatly outweigh the cons.  Offering promotions based on seniority can lead to high-quality employees developing a lackluster work ethic and even taking their skillset elsewhere as they look to advance in their career.

When deciding upon the best promotion system for your company understand that the decision you make will have an impact on the overall corporate culture. It’s best to take the time to map out your specific process via a thorough strategic planning process.

Decreased Motivation

When an employee develops the understanding that they will be promoted based on a seniority system instead of a merit-based system a reduction in motivation and engagement can occur.  This is because they realize despite how hard they work or if they go above and beyond the scope of their position, it won’t have an impact on if they receive a promotion. Therefore they begin to question why they should give their job 100% of their effort.

While many people love their jobs and the joy and satisfaction associated with their position are intrinsic motivators, the external motivating factor for many is an increase in pay and status.  Taking that away dramatically deflates their overall motivation.

Maintaining employee motivation and engagement can be a difficult task without adding promotion systems to the equation. If your company is struggling overall with keeping employee engagement high, you should review my free ebook, 5 Tips to Improve Employee Engagement.

Increased Turnover Rates

Highly skilled employees know their worth to a company.  They generally undertake expensive schooling, loads of professional development, practice, and training to reach their skill level.  Most employees don’t take on this level of dedication to remain stagnant in their career.

A seniority-based promotion system can lead to decreased retention rates as highly qualified employees who are passed up for promotions due to lack of seniority leave the company to find positions that will recognize and reward their abilities.

A high turnover rate then leads to more employees entering the company who are lower on the totem pole and less likely to receive a promotion.  The cycle then continues.

Decreased Efficiency

A culture of decreased efficiency can occur when a seniority-based promotion system is put into place.  Both employees with seniority and those without will be less motivated to perform at high levels for different reasons.

Those with seniority know that their odds of getting a promotion are high based solely on their number of years with the company. They don’t have to perform at an optimal level because of their tenure.  

Those without seniority, as stated previously, know they will not receive a promotion, so without that as a motivating factor, they don’t give 100% to their position.

A seniority-based promotion system also rids the company of the healthy competition amongst employees that sometimes leads to better job performance.

Increased Frustration

Imagine giving your all to a company and continually being looked over for a promotion because you haven’t been employed for a certain number of years.  Instead, you watch those will lesser abilities promoted to higher level positions year after year. A certain amount of frustration builds within you when that is your vantage point.

This frustration is what leads to decreased motivation, decreased efficiency, and increased turnover rates within a company.

Promotion Criteria

Though there are downfalls to a seniority-based promotion system, a merit-based promotion system can also have its difficulties.

When merit-based promotions are in place, there is often fear that those who are more popular or have a better relationship with the management team will receive a promotion first.  That naturally can also lead to increased frustration and turnover rates along with decreased efficiency and motivation.

If a merit-based system is put in place, it’s best to ensure that there is a standard for promotions that is consistent and impartial.  Everyone should be aware of the general criteria considered when promotions are given, and those in charge of promoting should use these specific criteria for each promotion. You should always be able to provide a clear explanation as to why the person you promoted received the promotion over others who were also eligible.

Knowing that promotion selections are impartial and consistent decreases the feeling that merit-based promotions are based more on relationships than actual work-related skills.

Merit and Seniority Hybrid

Some companies have found the best system for promotions to be one that combines the merit-based system with the seniority-based system.

This system considers both with employee merit being the primary criteria and seniority being part of the secondary criteria.

A hybrid promotion system allows companies to take the work of the employee into consideration while also giving preference to the employees who have been with the company for an extended period.

In this situation, if employee A and employee B have a similar work ethic and results, the employee who has been with the company longer would receive the promotion.

Moving Forward

Whether your company chooses to promote based on merit or seniority, it’s vital that the system be as fair and impartial as possible. Your goal should be to develop the best team within your organization and to keep those highly skilled employees you must create systems that are understood by all and fair.

Without a proper promotion system in place, you risk the chance of losing high-quality employees who otherwise would have remained within your company.

Improving C Suite Communication With All Company Levels

Reaching the C Suite is considered the ultimate goal of many employees working in the business world. The C suite, also known as the upper management department houses top senior executives within a company.  Once you’ve reached the C Suite level, you are charged with maintaining a demanding workload and making high stakes decisions regularly.

As a member of the C Suite maintaining communication with those at lower levels of a company can become a struggle, but it doesn’t have to be.  Below you will find ways in which you can improve the communication of C Suite executives with all levels of your company.

Company Levels

Most large companies have multiple management levels tasked with various responsibilities within the organization.

Upper Management

The upper management team is also known as the C Suite.  It’s called the C Suite because most senior executive titles start with the letter C including…

• Chief Executive Officer (CEO)
• Chief Financial Officer (CFO)
• Chief Operating Officer (COO)
• Chief Information Officer (CIO)

Middle Management

The middle management team is composed of the heads of a division or department.  They are responsible for managing other middle managers or the lower level management team.  They often have the titles of director or Vice President

Lower Management

The lower management team oversees the daily business operations of a company.  They have titles such as supervisor and office manager.

Communicating With Discretion

When talking with those at lower levels, you must understand what can and can’t be shared. Many conversations held at the C Suite level are sensitive in nature and are not to be revealed to those outside of the C Suite for various reasons.  While you want to communicate with those outside of the C Suite on a regular basis, you want to ensure that you are not leaking sensitive information.

Terminology

Those within the C Suite often utilize terminology that differs from those on lower levels.  You want to refrain from using complicated verbiage and acronyms especially if you feel those in lower level positions won’t fully understand what you are referring to.  Instead, use layman’s terms. You don’t want your employees to feel as though you are disconnected from them and who they truly are. One of the best ways to ostracize yourself is to communicate in a way that doesn’t connect with whom you’re having a conversation with.  

Understand The Culture

Every company has its own corporate culture, and quite often various departments and company levels have their own mini company culture as well.  The way things operate within the C Suite will often be different than how things are in the lower management realm.  It’s crucial that you develop a general understanding of the culture that’s present in all areas of the company.

This is similar to the role of a United States President.  He/she must be flexible, able to eat lunch with the ruler of a nation and a school teacher within the same week.  This wouldn’t be possible without an understanding of the culture of the various people in society.

Remain Visible

Visibility is crucial to maintaining communication with various levels of the company.  

Obviously, every employee should know who you are by name and face. However, they should also have the opportunity to speak and connect with you when possible.

As the size of your company grows, that can become increasingly difficult, but it isn’t impossible.

Send newsletters to employees addressing topics that are important to them. Record video messages regarding various issues which allows you to connect in a more personable manner than a print message.

Have roundtable discussions with members of the lower levels.  This is best done in a smaller group setting maybe via a brown bag lunch series or departmental meeting.  When you schedule these meetings ahead of time and make them a priority, you can ensure you’re getting face to face time with those in your company to maintain visibility.

Stay Connected

Above all else, you must develop an understanding of what’s going on on the ground floor of your company, both good and bad.  Acknowledge the positives that are taking place with praise. Also, acknowledge the struggles and concerns and put steps in place with the person responsible for those issues to make necessary improvements.

You can stay connected by remaining visible.  When your employees are used to seeing you and interacting with you, they are more likely to feel comfortable communicating with you about what’s going on within the company.

You can also stay connected through the use of surveys, polls, questionnaires, etc. to collect information regarding what’s working well and what’s not working well within the company.

This qualitative data is sometimes more impactful than focusing solely on quantitative metrics in business.  It helps to maintain a human connection with those in the company.

Above all else remember that you are a human working with humans.  Despite your title. Despite your salary. Despite the high impact career level you’ve risen to, everyone should be treated with the same respect and human connectedness across the board.

Moving Forward

As a C Suite Executive, you have a great deal of responsibility on your plate. Maintaining strong communication skills with those in your company should remain a priority throughout your tenure.  

To ensure it maintains a priority, make it a mission in your strategic planning process and revisit the progress you’re making overtime.

A strong and successful company is built from the top down, so establishing a culture with highly engaged employees who produce amazing results begins with you. A little communication can go a long way as a C Suite executive.

Top Reasons for Leaving a Job – Why Good Employees Quit

Finding a highly skilled, hardworking and consistent employee to join your team can be a difficult task.  Some companies find it just as challenging to decrease turnover rates of their best employees.

The reason an employee chooses to resign can vary widely.  Some get married and move to another state. Others decide to start their own business.  They might have a baby and decide to stay home or even win the lottery. Those are all based on circumstances that have more to do with their personal lives and less to do with the decisions made by their managers.  

The other reasons good employees quit their jobs are often directly related to their employer.  Poor management, lack of advancement opportunities, and the inability to maintain a work/life balance are some of the reasons given by good employees who choose to quit their jobs.

When you are dedicated to keeping the employees you manage satisfied and employed with your company, you must first develop a firm understanding of the top reasons why good employees leave their jobs.

Poor Management

Wendy Durante Duckrey, Vice President of recruiting at JPMorgan, is famously quoted as saying,  “most people don’t quit their jobs; they quit their boss.”

It is also one of the top reasons good employees give for leaving a job.

When an employee feels supported, encouraged, and motivated by their superior, they will work harder for them, and remain more dedicated to their position.

If they feel their needs are not being met and their concerns are not being addressed, they are less likely to remain with the company, not due to the job itself, but due to management issues.

Unfortunately, there appears to be a lack of proper training for many who enter into managerial positions.  It involves more than paperwork and tracking metrics. Managers must have strong people skills and the ability to develop relationships with those who work under them.

Otherwise, employers who struggle to manage their employees will continue to face the harsh reality that goes along with high turnover rates.

Feeling Undervalued

There’s nothing worse than going to work every day, doing your job to the best of your ability, being expected to go above and beyond your required tasks, and feeling underappreciated and undervalued by those at your job.

It is one of the fastest ways to decrease employee engagement and to lose a good employee.

You can make your employees feel valued in many ways including:

• Acknowledging their hard work publicly
• Providing them with a physical token of appreciation
• Offering incentives such as a half day off after reaching a big goal
• Buying them lunch
• Giving them a card expressing your appreciation

The ways in which you can make your employees feel valued are endless and can fit any budget your company has.

While all employees should be made to feel appreciated, it’s especially important to do this for employees who are continually working hard and taking on additional responsibilities beyond what they’ve been hired to do.

Lack of Advancement Opportunities

Most employees want to feel challenged in their career.  Being in a job with no advancement opportunities, be it their position or a significant salary change, will often lead to the search for new employment, especially when they recognize their value as an employee.

It’s important to give employees an opportunity to stay with your company as they improve their skills and advance in their career.

You can do this by making new job opportunities known to employees within the company, so they have first dibs before bringing in outsiders.

Also, check in with your employees at minimum once per year to discuss their career goals.  This will allow you to gain an understanding of how your employees are feeling regarding their current position and hopes for the future.

Also, offering educational opportunities and tuition reimbursement opportunities can provide your employee with a reason to remain with your company while gaining skills that can lead to advancement in the future.

Feeling Overworked

Today more than ever, the desire to have a career that still allows for flexibility, time with family and friends, and a healthy personal life is at the top of many employees’ list.

When employees are overworked, it reduces their ability to maintain a healthy a work/life balance.

It’s often found that good employees who show their ability to handle their job and take on additional responsibilities find the weight of their department placed on their shoulders.  While it might be seen as a way to show your trust in the employee, it is actually a form of punishment. It shows that when an employee performs well, they are rewarded with additional work and no salary increase.

When you want to give an employee additional responsibilities, it should be a non-negotiable that a salary increase or position advancement comes along with those added responsibilities.

Keeping Good Employees

If your goal is to keep your good employees working with your company, it’s crucial that you stay abreast of their needs and wants career wise.  In most situations, a highly skilled employee will be able to find another position, so you must consider what you need to do to keep them with your company.

Understand that you are working with people. People who have families.  People who have personal lives. People with dreams, wishes, and goals. People with feelings.

When you keep that at the forefront of your mind, you will treat your employees like real people and your good employees will recognize your humanism and be more likely to stay around.

When you treat them like they’re disposable, they will dispose of their position and find another.

As you work to ensure your employees remain within your company, it’s also vital that you keep employee engagement high.  It is one of the key factors to maintaining low turnover rates within a company.

If you’re searching for a resource that will help you maintain a workforce that is highly engaged, download a free copy of my book, 5 Tips to Improve Employee Engagement which features best practices for getting your employees involved in your company’s success.

Managing Generational Differences in the Workplace

Many of today’s companies have employees that represent various generations, and this can lead to many generational differences in the workplace.

Having differences in business can be a benefit because homogeneity often leads to a lack of new ideas and fresh perspectives.  However, if those differences are not appropriately managed, it can lead to division and a lack of engagement within the company.

To ensure the latter does not occur, it’s essential that all companies with employees from multiple generations be diligent in ensuring each generational sector feel appreciated, welcomed, and vital to the success of the company.

Generational Subsets

There are currently 3 generations most likely to be employed at this time.

Baby boomers were born between 1946 and 1964.

Generation X was born between 1965 and 1980.

Millennials were born between 1981 and 1996.

There are some Traditionalists still employed, though most have passed the working age.  They were born between 1927 and 1945.

Generation Z is entering the workforce in higher numbers being born between 1997 and today.

Each generation is likely to come to the company with different wants, needs, and viewpoints.  Taking everyone’s opinions into consideration and treating each employee as an essential member of the team are the high-level keys to managing generational differences in the workplace.

Below you will find more specific tips regarding managing these multigenerational differences amongst employees.

Review Your Company Culture

You can start managing generational differences in the workplace by reviewing how your company culture treats all generations within the company.  

Is the environment inclusive? Are there opportunities for collaboration amongst employees of various generations? Do members of different generations feel as though their needs are not being met or considered?

The review and adjustment of your company culture should not be a process only completed by those at the top of the company hierarchy. Every member of the team should have input regarding the creation and implementation of the company culture.

This can be done by having an in-person conversation or receiving input and feedback via digital formats such as surveys.

Also, offering opportunities for employees of multiple generations to be visible within various departments and levels of the company allows for a more heterogeneous culture overall.  

Consider Your Communication Style

An employee born in 1964 likely prefers to communicate in a different style than one born in 1994.

To offer an inclusive environment, provide communication methods that would make everyone within your company feel comfortable and considered.  

The IBM Center for The Business of Government posted a study highlighting the common communication preferences of members of the different generations.

• Traditionalists often prefer personal notes and letters.
• Baby Boomers prefer phone calls and face to face meetings.
• Generation X is more comfortable with emails.
• Millennials utilize text messages and blogs to communicate regularly.

This doesn’t mean you should stereotype your employees and assume Baby Boomers don’t text or Millennials don’t like phone calls.

It just means you should consider communicating in various ways to meet the possible preferences of your employees who represent different generations.  

You can gain a clearer understanding of communication preferences by getting feedback directly from your employees.  This can be done by sending out a digital survey to your team or bringing up the topic during your next department meeting.

Another communication topic to consider is whether there are open lines of communication amongst everyone on the team.  

If a millennial employee feels uncomfortable bringing ideas to the table, their skill set is not being utilized properly.

Also, if a Generation X employee believes his ideas are not taken seriously, he won’t be as motivated to stay fully engaged in the company.

Consider What Motivates Your Multigenerational Employees

You will likely find that each generation is motivated by something slightly different due to their background.

To determine what motivates your employees, gain feedback from them regarding what would make them feel more satisfied at work and what can be done to increase engagement with the team.

Motivating your employees should lead to increased employee engagement, but if you’re seeking additional methods to improve the engagement rate of your employees, download a free copy of my book, 5 Tips to Improve Employee Engagement.

In the same study referenced previously, the IBM Center for The Business of Government also highlighted the various rewards employees from multiple generations prefer.

• Traditionalists tend to prefer loyalty symbols such as plaques and certificates.
• Baby Boomers prefer promotions and other forms of recognition.
• Generation X is motivated by professional development opportunities or certifications that will advance their careers.
• Millennials prefer awards or monetary rewards in the form of bonuses or raises.

Again, you shouldn’t stereotype your employees based solely on their generational status, but instead, use this information as a guide. Ultimately, gaining feedback from your employees regarding precisely what would make them feel more satisfied allows you to get real insight into the factors that motivate them.

Promote Team Building

Engaged employees are happy employees, and happy employees feel comfortable amongst their co-workers.

Team building should be initiated regularly whether your company employs members from multiple generations or not because it’s good business practice. When your employees are from numerous generations, it can be even more essential to building a positive business culture than usual.

You want to incorporate team building as a way to connect employees of all generations and to connect members of the company who are at all hierarchy levels.

A team building activity can be as simple as going to happy hour after work for an informal opportunity to connect outside of the office, or as detailed as planning a team building program at an off-campus site.

Whichever route you take, remember that a team built on trust, consideration, and mutual respect is more likely to succeed.

Moving Forward

As you make the steps to manage generational differences in the workplace remember that your company is blessed with the opportunity to have employees representing various generations.  Their knowledge can serve and support your clients and customers in invaluable ways.

Building Corporate Culture By Design, Not Default

Designing the corporate culture of a business is a crucial component of long-term success.   It’s not enough to just let it develop over time without care, thought, or purpose. You must think about how the culture should look and feel within your company.  This should not be one more thing to add to your to-do list, but instead an integral component of your company, just like your products, services, and employee choices.

Understanding Corporate Culture

Before you decide to cultivate the corporate culture of your company, you must have a firm understanding of what corporate culture is.  According to Investopedia.com, corporate culture is the “beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions.”

You can read more about the specific benefits of creating a corporate culture and how it impacts various businesses here.

Determine Foundational Values and Beliefs

Creating the corporate culture of your company should involve an open conversation between everyone in the organization from the top down, but it shouldn’t start that way.  

Begin the process by having a meeting with the leaders of  your business to develop a baseline understanding of what the foundational values and beliefs are related to

• Goals
• Strategies
• Customer interactions
• Investor relationships
• Community
• Dress code
• Business hours
• Office setup
• Employee benefits
• Hiring decisions

While there’s no guarantee that the ideas you develop during the beginning of this process will make it to the final stage of your corporate culture plan, this is a great place to start before you involve your full team.

Gain Employee Insight on Corporate Culture

After developing a foundational overview of the values and beliefs of your organization, it’s time to bring in your employees.

Depending on the size of your organization and the current culture, this can be done anonymously via a digital format, or in person by having a traditional roundtable conversation.

If your company is smaller and used to open communication, an in-person roundtable meeting might be best.  

If your company is larger, or you believe some employees might not feel comfortable giving their honest opinions in the open,  it might be best to send out an anonymous digital survey.

Whether this stage is completed in person or virtually, you must set the purpose for the conversation.  Explain why you are gathering this information. Ensure they understand the end goal and why their input is essential.  Explain to them your next steps in the process.

This helps them become fully engaged in the development of the corporate culture and allows them to respond to the questions with the background knowledge and foresight necessary to give their best responses.

Gain Buy-In

Once you have a conversation with your employees and flesh out the final corporate culture of your company, it’s time to gain buy-in.

Everyone might not be excited about the new culture you’ve set in place.  Maybe it’s because they feel the current culture is good enough. Perhaps it’s because they don’t want to see change.  

Whatever the reason, it’s crucial to gain buy-in, if only from a few employees to start.  This is because when you start a new mission or process, those who believe in it will start the domino effect of support.  These supporters will act as role models and express to their co-workers in a peer to peer conversation the benefits of this new initiative.

You might need a bit more of a boost in increasing employee engagement in the corporate culture process.  If you are seeking additional support, download a free copy of my book, 5 Tips to Improve Employee Engagement where I share best practices for getting your employees engaged in your company’s success.

Implement the Corporate Culture

Now that you have a corporate culture in place that you’ve designed, it’s time to implement it.  Setting a plan in place is the simple part. Incorporating it in your day to day business practices will test whether you can maintain this culture.

Make sure you stay focused on your ultimate corporate culture goals, and if necessary, you might need to teach and reteach your employees how to operate within this new culture.

Lead by Example

Here’s a bonus tip as you’re designing your corporate culture and expecting your employees to buy-in to the process and follow along.  You must with no doubt lead by example.

Remember that you are being watched at all times by your employees.  Everything in business comes from the top down, so your employees will follow your lead.  

If you start out strong in modeling the new culture then get lax around month 2, they will believe the initiative is not very important, and they will get lax as well.  However, if you’re serious about it and model the culture on a daily basis, they will see you and hopefully become more serious about it as well.

Make the culture a part of who you are as a leader.  Be the biggest cheerleader and supporter of the new corporate culture and hold yourself to a higher standard than your employees.  That means if you want your employees to shoot for the stars, you need to be on Neptune. It wouldn’t be the expectation that the majority of your employees land on Neptune with you, but some will rise to the occasion, others will fall short, but at least they won’t still be on planet Earth.

Above all else, remember, your energy is contagious. It’s your role to guide your employees in the design and implementation of your company’s corporate culture.