It can be easy as a manager to label people as bad or good performers. This performance labeling tends to be a convenient way to quickly categorize people. It is efficient for human resources. Once labeled, people can be given promotions or demotions, merit or punitive action, more money or less money. Management and Human resources can now implement programs of the month such as succession planning, employee of the month and so on. This approach seems to have come from the behavioral management theories of the past. These ideas do nicely align with short term thinking and the idea for quick results at any expense.

The dangers of labeling people

Having been labeled, people will tend to perform to the level of management’s expectation and no more. Those labeled as good performers will tend to continue to do well without fear or anxiety about how they are perceived. Those labeled as poor performers will find it difficult to do better under the threat of having to improve.

For better management, it is wise to avoid this approach.

A better approach

It is a far better approach to look at each person as unique and different. This can be demonstrated through regular development reviews, plans, and an on-going focus on employee development. It is better to invest time and meet on a regular basis with all employees. Establish regular meetings which are developmentally focused. Make it the employee’s agenda to discuss what they want to do more of, less of, and discuss areas in which they are finding difficulty. Make these development sessions focused on the positive development of each person. Under this approach all people will perform better having their manager show interest and support in their development.

Of course, under annual performance evaluations there will be performance ratings and reviews but these should be separated from the developmental discussion itself. Make employee development a process and an on-going event. This insures great management leverage and both employee and organizational improvement.

Organizational behavior and labeling

There is a tendency in many organizations to rank, rate, and sort people against each other. They produce quickly a list of good people and bad people. The problem with this management tool is that it is mostly subjective and people can be labeled unfairly. Little known to the employee is that they lose out on new opportunities to contribute once their managers have labeled them in negative terms. In many cases just the opposite may be true.

To become a better manager, step back from a systems view when having difficulty with an employee and ask a few questions. Does the person have the tools to be successful? Is there something in the environment which is preventing success? Is there something I can do as the manager to remove barriers and assist? This mindset will go further towards helping people to succeed at work.

Is there a good employee and a bad employee anyway?

I have not yet met a person who wakes up in the morning and decides it would be a good day to perform poorly at work. Poor performance at work can be attributed to many things. The most common from I have observed is either the person has a wrong fit in his current role, management goals and communications are unclear, or the culture is unhealthy. This can be a result of poor management.

The dangers of ranking and rating

Many firms especially in high tech have adopted the ranking and rating model of employees. While this can be effective in creating competition, it's not effective in the long term. Any management process which is purely subjective is bound to cause tension when it is the only way; better to include people in their own evaluations and next steps. Management can help people to make better contributions to the organization through two way communications, on-going feedback, and more focus on collaboration vs. competition.

Viewing people as a commodity vs. an asset

The Best Manager views all people as assets. The Best Manager is always thinking of how to effectively work with employees; matching high challenges and high skills and considering the needs of the business. When people are viewed as assets, management looks proactively at how to best work with its employees. This system gives flexibility for more job rotation, for more cross functional assignments and more feedback. When people are viewed as JUST a commodity the system tends to be directed one ways, from management to employee.  Employees start feeling that they are being used and not appreciated.

Better ideas to replace labeling

Establish a database of abilities and interests. Combine this database with business needs and employee development plans. As new opportunities come up, utilize the database to assist in selecting people for assignments. This helps people to feel vested in the business and less constrained by a job description. This leads to more risk taking and creativity which is a good thing for the organization.

Enable movement throughout the organization

Effective leaders enable all employees to move from assignment to assignment or job to job despite past performance. Many people become stagnant when they are forced to remain in the same positions year after year. Sales people are told they can’t go into marketing, engineers are told they can’t go into sales, and human resources staff have difficulty moving into business line functions. Moving people around the organization spreads knowledge and enhances learning.

What occurs when people feel included and valued?

People feel valued at work, they get more done, have better relationships with their peers, and make the culture stronger. When people feel like they are viewed as unique and not labeled or forced to compete against their peers, motivation can increase. The organization and the employees benefit.

Craig Nathanson

Craig Nathanson is the founder of THE BEST MANAGER™, workshops and products aimed at bringing out the best in those who manage and lead others

Craig is a 25 year management veteran, Executive coach, college professor, author and workshop leader. Craig Nathanson is also The Vocational Coach helping people and organizations thrive in their work and life.

NOTICE to Daily Beast viewers: Here is the correct link to Donald Van de Mark's story on Lou Dobb's Management Style>>

There is a favorite grocery store that I like to visit. All of the employees are treated fairly and equally. No tasks are either too big or too small for any employee. Since people are treated well, they are motivated to contribute their best at work. This store pays the highest in its industry with the best benefits. There is job rotation so everyone gets to know all aspects of the business. Communication is frequent, there are no closed doors, and the managers are also accessible. They have a great well thought out system in place.

What is a system?

A system is comprised of processes, some important, some not so important. A process has a start and a stop, an in and an out. You know you have a process when you can flow chart it on a piece of paper. A process has a certain state. It is mature and working well or could be embryonic and very immature. A process can be broken if some pieces are not working well together. The system then represents the state of all of its processes. The idea of a system is to focus on long term stability. Understanding the system helps not to make short term decisions which may temporarily fix the immediate need but damage the system in the long term. It is easy when trying to resolve problems to focus on cause and effect.

What is a management system?

A management system also has many processes on multiple levels. They all contribute to the health of the management system. For example, it is very important to understand what process is used to evaluate people. If people are evaluated in a way which encourages competition among peers this will influence the overall competition and affects the climate in a company in an unhealthy way. If people are encouraged to work together on teams and collaborate, the system will look different. In this case people will tend to help each other more without fear of sharing information which might affect their performance ranking.

The way managers communicate affects the overall system. If management typically keeps its doors closed and rarely shares business updates with the entire staff, the system will tend to operate in a way which encourages secrets, gossip, and many other problems. If management keeps its doors open, it will help open communication and overall sharing of all business-related information. In this type of system one will see more risk taking, creativity, and interest in the business by employees.

The Worst management system!

The worst management systems encourage limited information sharing, a lack of creativity, unfairness and less opportunity to contribute and participate in the overall business. I will give you a few examples of bad management systems:

• A top manager asks Human Resources to establish a ranking and rating system among staff in an effort to improve performance but this leads to less teamwork and positive relations between staff and a direct impact on the bottom line.
• Another manager might establish a new policy that limits overtime which leads to an increased amount of errors in the workplace as employees rush to complete their work so they are not forced to work long hours without pay.
• A manager implements a new policy which restricts employees from transferring to new positions if they are not performing well in their current role. This leads to people leaving the organization for lack of opportunity when all they may have needed are new opportunities. Now the manager will have to hire replacements at usually twice the cost.
• Another manager decides that the first cost cutting activity should be to eliminate free coffee and instant soup in the lunch room. This does not lead to much cost savings but instead sends a message to employees that they are not that important thus leading to work slowdown, poor morale, and people leaving, which ends up costing the organization many times over what the coffee and instant soup cost!

These are examples of behavior which are usually well intended but simply not thought through from a system’s view.

The impact of non-systemic thinking in management

Decreasing revenue, morale, working relationships, and overall fear and lack of trust occur with short term non-systemic thinking.

Just wander into any retail store and you will notice the health of the system. For example, there is one office chain I used to visit. It became more difficult to find any employees working there. It seems in this store they are each given assignments in the morning having to do with store maintenance for which they are rewarded or possibly punished. As a result in the system there is little focus on the customer. Over time, the customers will visit competitors and much more revenue will be lost in this system.

On the other hand I can think of a local bagel shop I visited where the employees greet me by name and remember my usual order. I notice how happy all the employees seem. Later I learned every employee has been given a share of the business and is considered an owner. In this example they don’t hide from customers because this is their business. I am sure you can now think of similar examples. Non-systematic thinking leads to entropy, errors, and a general decline of the business. The BEST manager thinks through all decisions and policies and in advance determines the resulting impact on the system.

The best management system

The best management systems are aligned and interdependent. All processes make sense and impact each other in a positive way. The people who work in these systems know what to do, have complete autonomy, and are respected. Each business process leads to another. If a customer requests a product which the store does not have, this product is ordered and now the inventory process and related processes adapt to this customer request. Employees are given updates on new products coming in and old products going out. This constant flow of open communication leads again to employees feeling vested in the business. In the best management systems, people can explain how things work and why.

The impact of systemic thinking in management

The impact is felt widespread. The business works well, employees are happy, customers feel good about the service, and the brand builds a healthy reputation. Most important, the business thrives and grows.

How to implement a good management system

Think from a big picture view. Indentify the most important processes and examine how they work with each other. Understand which processes have the biggest influence on the organizational goals. Put people in charge of these processes to improve them. Have open feedback and communication at all levels of the system. Encourage risk taking, creativity, and personal development.

How to make a good management system last

Make the people who work there the most important, more important than customers, more important than profit. People will rise to the occasion helping to build a system which lasts.
Involve all levels of staff including them in all major decisions and actions. Enable staff to feel like owners of the business and they will work to improve the system. As a result everyone benefits.

Why systemic thinking matters

Without systemic thinking, the same issues go unresolved. Time and resources are wasted and customers and employees are unhappy. Systemic thinking leads to the improvement of all working parts. With systemic thinking, processes become mature, people make better decisions, and the organization, its products, and services thrive. This is BEST management!

Craig Nathanson

Craig Nathanson is the founder of THE BEST MANAGER™, workshops and products aimed at bringing out the best in those who manage and lead others

Craig is a 25 year management veteran, Executive coach, college professor, author and workshop leader. Craig Nathanson is also The Vocational Coach helping people and organizations thrive in their work and life.

Craig’s on line communities can be found at http://www.thebestmanager.com/blog and http://www.thevocationalcoach.com/_blog

Have multiple streams of income

In this economy the idea of having just one job doesn't make sense. First, there is a lot of competition for a single job. Second, once committed to just one job, independence and flexibility are taken away.

The best strategy in this economy especially for those over 40 is to have multiple streams of income. This gives one the best sense of security. If one stream of income doesn't work out, there are many others to turn to. I suggest the number five as a target to aim for. Why? No scientific reason other than you can keep track of them on one hand! This approach, of course, takes a whole different thought process.

One of the best ways to start is to search on the various job sites under part-time work. I recommend indeed.com. Also start to look at sites like guru.com and elance.com which give people the opportunity to bid on work and offer themselves and their talents.

Align all work around a central theme

It is important for focus, energy, and momentum to look for five sources of revenue which all relate to one another. For example, I had a client who was a high school teacher and decided to leave because of the new emphasis on teaching skills. She still loved to teach. Today, she helps high school seniors to discover what they want to do in their life and to find the best colleges. She has a coaching business helping high school students who are struggling with grades. Her third source and core business is developing training programs for teachers as part of their in-service training days, teaching them how to better communicate with students. Her fourth and fifth sources of revenue are working part-time for others. She is a substitute high school teacher for 3 districts 3 days a week. She likes the challenge and no longer has the state testing pressure. Her other part-time job is working for a text book company selling textbooks to high school teachers. This keeps her close to her target audience and customers.

Her overall revenue after 2 years of developing is slightly higher than she made as a full time teacher. Now she has to pay private health insurance and she gave up her "retirement" but she is happier now with no need to ever stop doing what she loves. Recently she told me that she was considering a sixth source of revenue which is assisting teachers on the path and process to teach overseas.

Establish You, Inc

Like the example above, this same opportunity is available to you. First, you must think through which abilities and interests align the best. This is where you should focus. You will surprise yourself with the ideas you come up with. It is much easier to get 5 sources of revenue and customers then just one traditional job which will lock you into a time, place, and a salary! So outdated for those over 40!

Establish a niche

I have one client who loved working with old classic cars. Fast forward, today he has multiple streams of income around this passion. He organizes downtown shows of old cars. He actually fixes other people's old cars. He acts as a broker helping people to get the spare parts they need for their vintage cars. He works one day a week at a junk yard. He likes being outside and this also gives him access to new parts which come in. He works 2 days a week changing tires at a local shop. While this doesn't relate directly to his love of old cars, he knows how to fix tires and this part time job keeps him around cars!

Find new ways to work

Start with a business card. What would you call yourself? What would your tagline be? What would your marketing flyer look like? What products and services could you develop and sell to others. Which part-time jobs could you combine in similar areas?

It all starts with a sense of purpose and path

Focus in areas where you feel deep interest. It is very important especially after 40 when you start feeling a sense of urgency around your work and what you do.

Over 40 the OLD way of looking for just one job no longer makes sense. The new way is to create multiple streams of income. This is important in mid-life as the need to explore, to travel, and to be creative rises to the surface. Getting just ONE job is hard work- Getting five is much easier!

I'll be cheering you on as you go - Craig Nathanson

Craig Nathanson is the author of "Don't JUST retire and die: A new approach to your life and work after 40" and he is a coaching expert who works with people over forty.

Visit Craig’s online community at http://www.thevocationalcoach.com where you can take a class, get more ideas through Craig Nathanson’s books and CD’s, get some private coaching over the phone or skype using webcam or in Craig’s office, or read other stories of mid-life change and renewal.

Craig lives and works in Petaluma, California. His office is located at P.O Box 2823, Petaluma Ca, 94953. You can reach him at 707-775-4020 or at craig@thevocationalcoach.com.