Personnel e.bulletin – April 2012

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Prepared for the PHCC Educational Foundation by TPO, Inc.

Why are we talking about a process for promotions anyway? We know that there are few opportunities for upward mobility in small companies, why not just “wing it” when it comes to a promotion decision? Part of what makes entrepreneurs successful is their ability to make good decisions quickly “from the gut,” without having all the facts. But what serves you well in other aspects of running your business can backfire when it comes to promoting staff. Just “winging it” when it comes to a promotion decision can have long term consequences.

Know the Risks
Unfortunately, the consequences of “getting it wrong” when it comes to promotion decisions can be significant and lasting, undermining  all the hard work that you have done to build a cohesive team. Contrast the illustrative coffee room chatter:

Positive Work Environment Negative Work Environment
I am so happy for Sue and her promotion.  She really has worked hard for it and I know she’ll be good at what she’s doing now. 

 

I can’t believe Sue was promoted.  She has always been the “favorite.”
The promotions this year went just how I expected and followed what they told us the process would be.

 

It sure does help to be related to the boss. I guess that’s the process here.
I’m happy they gave me a chance to be considered for that promotion.  Though I didn’t get it, at least they gave a clear explanation of why I didn’t meet the qualifications and why Sarah was a better fit for filling the position.

 

How did that promotion happen, it seems completely random?  I think I am more qualified than Sarah and should have been taken more seriously.
Once things were explained, now I understand why they decided to hire an outside applicant to fill that opening. There really wasn’t anyone here with the skill set they were looking for to move us forward quickly. I should have been promoted instead of bringing Sam in from the outside. I am not going to make his job easy and forget about taking on additional responsibility.

 

Know the Process
• Define the Process
• Develop Standard Operating Procedures
• Make Decisions

A process for promotions starts with defining the principles that will guide you in making promotion decisions. They should be consistent with your company culture and communicated broadly so that everyone in the company has a shared understanding. Principles are rules of conduct, so once they are established, they need to be followed.

Promotion Principles
Examples of Promotion Principles include:

• Skills and requirements of all positions will be defined and communicated so that all team members know what is required.

• Promotion opportunities and criteria will be broadly communicated and not limited to only a select group of employees.

• All internal applicants will be assessed and vetted before considering external candidates.

• Promotions will typically only be considered when there is an open need.

• Promotions will be based on qualifications and performance, not on tenure.

• Performance will be the “tie breaker” between two equally qualified candidates.

• The promotion process will be as transparent as possible.

Promotion Standard Operating Procedures
Once you have defined your principles, you can leverage them to outline Promotion Standard Operating Procedures (SOPs), like:

• During the annual performance reviews, supervisors will discuss the promotion interests of their people.

• Once a promotion opportunity becomes available, supervisors will inform their teams.

• Any interested employee will be asked to fill out a “statement of qualifications” and review it with their supervisor.

• Supervisors will serve as “advocates” for their people in making promotion decisions.

• Once promotion decisions are made, they will be effective immediately.

• Salaries will be adjusted as appropriate.

Decision Making
With Promotion Principles and Promotion SOPs, you are prepared to make decisions. In addition to continuously testing against the principles and guidelines, Decision Making should consider the:

• Return on investment; insights into how long you can reasonably expect the candidate to stay in the job, costs to train or retool, etc.

• Candidate’s motivators; do they really want the work, are they attracted by an increase in money or status, do they really want to learn?

• Candidate’s understanding of the lifestyle implications; does the new role have less flexibility, longer hours, require availability after hours, or change opportunity for
taking vacations and holidays?

• Impact on the candidates who are not chosen; should you anticipate turnover as a result of the decision?

• Communicating the decision; how will you announce the decision and do you need to have any individual conversations to make sure the promotion is successful?

Know the Possibilities
The responsibility for upward mobility is not yours alone.  Ultimately, it is the responsibility of employees to “own” their careers. However, you must do your part by expecting your employees to start preparing for their promotion the day they start working for you.

1. As soon as they are hired, check with their supervisor to identify if the new employee has potential for future promotional opportunities.

2. Review with the employee, or make available to him or her, job descriptions or prior job announcements for positions that might be a next step in their career path. This will provide the employee with the skills, knowledge, and abilities that they need to develop at every opportunity.

3. For each major duty or responsibility, set goals with the intent of being ready to promote in two years.

4. Prioritize the development of the employee’s skills based on her or his current skill gaps.

5. Periodically evaluate the employee’s progress against his or her goals.

While there are clear limits to the promotion possibilities you will be able to offer your employees internally, there is a great deal that you can do to prepare your employees to be promoted externally. Counterintuitive as it may be, the practice of helping your employees to “build their resume” just may increase their loyalty to you.  If you create a culture of growth and development, if & when your employees move on, they will leave on better terms.

As a small business, promotions are one of the most important decisions you make. Do it right and will you have great talent to help you run the business. Do it wrong and you will have constant distractions of dealing with disgruntled employees, legal challenges or a bad hire you have to address. Something this important shouldn’t be left to chance or “winging it.” A structured process will net you better results all the way around.

 


This content was developed for the PHCC Educational Foundation by TPO, Inc. (www.tpo-inc.com). Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of March 2012. Any omission or inclusion of incorrect data is unintentional.

The PHCC Educational Foundation, a partnership of contractors, manufacturers and wholesalers was founded in 1987 to serve the plumbing-heating-cooling industry by preparing contractors and their employees to meet the challenges of a constantly changing marketplace. If you found this article helpful, please consider supporting the Foundation by making a gift at http://www.phccfoundation.org.

 

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