Over a 5-year Horizon
Managers often push back when asked to develop 5-year plans for some employees. Why would this be? Often it is because they simply don't see the value. And there is real value here for any number of reasons. First, consider the fact that employees just don't stay with one company for their entire careers as many people did in the past. Therefore, you, as a manager, will be faced with backfilling jobs in your organization. On the surface, this seems to be an argument for not doing 5-year plans. It's actually the opposite. If you consider that key people in your organization may move on, it becomes apparent that you must be developing internal talent to backfill at least some of those positions.
Many companies evaluate employees as "ready now" for promotion or "ready in 3-5 years" for promotion. Take a good hard look at those in the latter category and spend some time adding developmental assignments and opportunities to your plans for them.
As a first step in this process, have a conversation with the employee. Ask what he or she sees as his career path forward. Find out if he is interested in moving up in your department, or perhaps in another department. Begin to talk about his current skill sets and what the requirements of the next job up are, and where you see short-falls. Then add at least one or two developmental goals to the coming year's Performance Management Plan.
A second reason to develop five-year plans is that the developmental assignments which come out of such planning give you information and give the employee information. Perhaps the developmental assignment did not go well at all. You may need to change direction with your planning for this employee's future. Or perhaps the employee not only met, but exceeded your expectations in the assignment. Again, some tweaking may be in order. The employee himself will have learned from the assignment, too. He may have determined that the kind of work he thought he wanted to do is not at all what he expected it would be. He may have found that he actually wants to move in a different career direction altogether. Good information for both of you to have, whatever the outcome.
A third reason to work on five-year plans is to give your most promising employees a reason to stay with the company. It's really pretty easy to lose talented employees. If they perceive that they are not appreciated or not challenged, they are likely to go elsewhere. And which of your employees are most likely to be courted by other organizations? Right. The very ones you want to keep. So it's simply smart business to sit down and plan out career development, particularly with employees you are most interested in keeping.
What should a five-year plan include? Emphasize flexibility. There are absolutely no guarantees your business will look like it does today in five years. Instead of using this truth as an excuse not to plan, instead consider it one of the forces that make planning a necessity. What are the trends in your business sector? Are mergers common? What about down-sizing? Are new competitors or new technologies on the horizon? Or do you see government regulation or intervention increasing or decreasing? What about global markets or global competitors entering the market? Consider both the positive and negative outcomes of these kinds of forces on your business as you look ahead five years.
Let's suppose, for example, that a particular patent your company holds will expire in 3 years. Consider how that could impact your business. Will you lose customers? Will new competitors enter the market? Probably both. If that's the case, you could be directing your employee to research a broader customer base or perhaps different applications for existing products.
Suppose you are aware of rumblings in government about the likelihood of imposing new import or export regulations which will impact deliveries from suppliers as well as your deliveries to customers. Perhaps it's time to assign a two-year goal to a promising employee to become the resident expert on this eventuality.
Probably the most obvious long-term Performance Management planning opportunity has to do with projected attrition. If your company has key people who are nearing retirement age, you have an opportunity on several levels. First, the person retiring has handled his key role in his own way. His strengths and weaknesses have impacted his job performance, just as they do for each of us. Perhaps he has developed an absolutely state of the art way to track inventory, but he has not excelled in managing the people in his department. If you are grooming his replacement, you probably need to pay more attention to the people-management side than to the inventory-management side. In other words, take a look at the areas in which there is growth opportunity for that role, and focus on developing those strengths in the person you are doing long term Performance Management planning with.
A second opportunity as you plan for attrition has to do with how the current role fits with what future business challenges or changes may be. The job as it is structured today may have served the business well in the past, but may need to be re-designed once the incumbent retires. Let's suppose that a Quality Control Manager has risen through the ranks of the organization and has always been a hands-on and directive manager. When he retires, the business may be better served by outsourcing some of his role, or even by combining it with another job function. This could be true if instrumentation and technology has advanced to the point that a hands-on approach may no longer be the necessity it was in the past.
As you look at long term Performance Management planning as it relates to attrition, another obvious issue arises. Does the job of the person retiring have to back-filled at that same level? Could the same work be spread out among several other people whose own job responsibilities have decreased? Or could you move some of the work and hire a person at a lower level (and lower cost) to be responsible for some of the remaining job tasks? If that's the case, then your long term Performance Management planning for several employees could be impacted. You may need to begin training several people to assume new tasks once the incumbent retires.
Most managers in viable companies today are well aware of the demand to do more with less. They can perceive this demand as a reason not to do the "extra" work involved in long-term Performance Management planning. Quite the opposite is true when you consider the facts. Businesses will not suddenly begin to add people to take the burden off current employees. It's far more likely that the "do more with less" theme will continue well into the future, driven by competition and other market forces. Therefore, the wise manager is making the most of the talent at his disposal by planning with them for their success in the future. Done well, long-term Performance Management planning can be a powerful retention tool, a way to assess talent, and a way to insure that attrition does not blind-side you as a manager. The outcome of such planning is well worth the time it may take.
Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.