at the company.’’ She encourages people to keep their commitments,
but she also encourages them to let her know quickly if something may
interfere with the keeping of those commitments: ‘‘Whatever it is, I
expect it to be delivered . . . And I always tell them the bad news better
come out real fast. The faster we can figure out that something either
has changed or needs to change, the quicker we can reassess and get
going again.’’16
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We can hopefully assume that both Bartz’s daughter and her employ-
ees have improved their performance through this gentle yet direct style
of correction. While Bartz’s daughter’s grades remain unpublished, pre-
sumably protected information, the company’s results are very public:
$100 million net income on revenues of $820 million in 1999, the year
she was interviewed.
CONSEQUENCES
The third stage of performance management takes place after a task,
project, or year is complete. Although formal performance appraisals
tend to occur at the end of predetermined periods of time, the best
leaders are giving ongoing informal feedback in the form of positive and
negative consequences. Performance feedback should be timely, job-
relevant, goal-related, and attainable. It should also be communicated
in a way that makes the recipient feel motivated to improve, not pun-
ished for irrevocably ‘‘bad’’ behavior.
Timely, Fair Consequences
The Bible observed the need for timely correction of misdeeds almost
2,000 years ago: ‘‘When the sentence for a crime is not quickly carried
out, the hearts of the people are filled with schemes to do wrong.’’
(Eccles. 8:11) Not only are we giving the wrong message when we fail
to give quick negative consequences to an employee who has failed to
perform, we are also setting a bad example for the rest of the team.
Dan Tully, chairman emeritus of Merrill Lynch and Company, is a
strong modern proponent of swift, honest feedback and consequences
to match. ‘‘You must give people honest, candid feedback,’’ he notes.
‘‘You owe it to them so they can reach their full potential, and you owe
it to the people around them, the ones above and below them . . . If
the guy in the middle is a stiff, and I let him stay there and destroy the
people around him, shame on me.’’17
Part of the reason that John Akers’s time at the helm of IBM was so
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rocky was the tradition of nonaccountability and entitlement that had
developed in the company. IBM had become a ‘‘jobs-for-life’’ company
where mediocre, unaggressive performance had become not just toler-
ated but often the norm. Performance feedback had become bland and
unconnected to future strategic actions the company needed to take. To
get discharged by IBM, you literally had to shoot someone or pilfer a
valuable piece of equipment in broad daylight.
This lack of consequences was having a severe effect on the com-
pany’s productivity and morale. In a 1991 interview with Fortune, Akers said, ‘‘We’ve been . . . not sufficiently demanding of ourselves regarding
those folks who aren’t doing the job. We have had a very low level
of separations for poor performance. That level will go up—must go
up.’’18
Unfortunately, the level of accountability was raised too little and too
late. At the time of Akers’s interview, IBM had already begun its first-
ever series of downsizings. In the process, it lost not just the poor per-
formers it was seeking to eliminate, but also some very good performers
who concluded they would be better off in another company where
consequences were tied more directly to performance. Those who
stayed went through a tough transition period, but under Lou Gerstner,
IBM has now become a company where ‘‘as you sow, so shall ye reap.’’
Most employees will accept negative consequences that are adminis-
tered fairly—in proportion to the offense—and justly, without favorit-
ism or vindictiveness. Jeremiah prayed for God to ‘‘correct me, Lord,
but only with justice—not in your anger.’’ (Jer. 10:24) This is the ear-
nest wish of so many modern employees who have been disciplined
with too little justice and too much anger. Such discipline actually un-
dermines the credibility of the leader.
Most employees wish for leaders who are capable of and willing to
carry out the words of Jeremiah 31:20: ‘‘I will discipline you, but only
with justice.’’
Two leaders who adhere to this philosophy are Bob Knowling, for-
merly of US West, and Gordon Bethune of Continental Airlines.
Knowling felt that in the phone company as it existed a few years ago,
performance was lagging because no one was held accountable and no
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one’s job was ever at risk. ‘‘It was demoralizing for the high performers,
degrading to the poor performers,’’ he observes. ‘‘Yet most poor per-
formers know they’re poor performers. If you’ve been honest in your
assessments of them and treated them fairly and respectfully, they usually
accept the fact that they have not made the grade.’’19
Gordon Bethune realized that one step in reviving the airline in 1995
was the removal of low-performing or nonperforming staff. This task
was understandably approached with some trepidation; if handled
poorly, the result would probably be lost productivity rather than the
productivity gains that were intended.
Bethune wanted to make sure that the consequences were applied
fairly and justly. The lowest performance rating at Continental is ‘‘4.’’
Says Bethune: ‘‘We simply asked all the 4’s to leave . . . Either they
weren’t doing well enough at their jobs . . . or because they weren’t
team players . . . And you know what? That final cut didn’t cause the
smallest amount of unhappiness or fear . . . in the ranks. ‘Jeez, they got
rid of Harry—that jerk should have been shot twenty years ago and
somebody finally did something.’ ’’20
The rank and file employees did not quote Ecclesiastes (‘‘When the
sentence for a crime is not quickly carried out, the hearts of the people
are filled with schemes to do wrong’’), but similar thoughts were proba-
bly on their minds.
But consequences applied too harshly by leaders can have as demoti-
vating an effect as lack of consequences. Rehoboam, son of Solomon
and successor to him on the throne, obviously did not possess his
father’s wisdom or judgment. This is the man who said, ‘‘My father
made your yoke heavy; I will make it even heavier. My father scourged
you with whips; I will scourge you with scorpions.’’ (2 Chron. 10) The
people understandably rebelled against a ‘‘CEO’’ who began his reign
with such a declaration of unreasonable harshness.
Another example of harsh consequences is that of three men—
Korah, Dathan, and Abiram—who dared to challenge Moses’ authority.
They felt that Moses had set himself too far above the rest of the people.
They also refused to come when Moses summoned them: ‘‘We will not
come! Isn’t it enough that you have brought us up out of a land flowing
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with milk and honey to kill us in the desert? And now you want to lord
it over us? Moreover, you haven’t brought us into a land flowing with
milk and honey or given us an inheritance of fields and vineyards.’’
(Num. 16:12–14)
The consequence to these three men was swift, sure, and perhaps a
little too harsh for our modern tastes: ‘‘The ground under them split apart and the earth opened its mouth and swallowed them . . . They went
down alive into the grave with everything they owned; the earth closed
over them and they perished and were gone from the community.’’
(Num. 16:31–33)
This was definitely an example of Theory X management, Old Testa-
ment version. Lou Noto, vice chairman of Exxon Corporation, felt that
his company was also the victim of a culture that punished the slightest
attempt at innovation or risk. Goals were set artificially low because any-
one who didn’t meet a major objective was severely punished: ‘‘If you
couldn’t meet it, it was the end of the world,’’ observed Noto. ‘‘We want
to encourage the right kind of risk. To do that, we have to break this
ironclad rule that says if you don’t succeed, we’re going to put you in
front of a firing squad.’’21
Whatever you may feel about the punishment given to Korah, Da-
than, and Abiram, it is good to remember that even the most powerful
human leader is not God. Who are we to duplicate such severe punish-
ment? Today’s modern business leaders have to gauge very carefully
how they react to those who dissent or propose innovations to the
established order. The person who was ‘‘swallowed up’’ or exiled may
be the very person whose ideas could have gotten the organization out
of the morass.
In the Bible, some of the strongest negative consequences are actually
reserved for leaders who abuse their power and who fail to realize the
disastrous effect they have on their followers: ‘‘Weep and wail, you