Not everyone can be the CEO, and not everyone wants to be the CEO. At grocery retailers and CPGs, some workers thrive in their current positions and don't dream of moving up the ladder. For companies that promote workers as a form of recognition, rewarding these high-performing employees requires a different mindset.
"You have to recognize that some roles are really experience-driven, and if you move people out of those positions, you lose that," says Mike Friedman, a partner with innovation consulting firm Kalypso, based in Beachwood, Ohio. "It can be inspiring to see someone who is passionate about a role."
By keeping some people in certain positions or at certain levels, an organization can avoid what's often called the "Peter Principle," the idea that people are promoted until they are in a position in which they are not competent. Some companies now advocate the "Reverse Peter Principle," allowing people to stay in the positions they are most qualified for indefinitely.
Regardless of the reason a worker chooses not to climb the ladder, an important challenge remains: How does a company reward the employee? Some grocery retailers and CPGs reward high performers who are not necessarily in line for promotion with exciting assignments, while others provide lateral opportunities. Perhaps the most effective way to honor these employees is by providing meaningful work and recognition for successful completion of that work.
"The key to motivating employees in an organization that is more horizontal than vertical is to leverage their employees' strengths and enable them to contribute to the organization in a meaningful way," says Helayne Angelus, a partner at Kalypso who has worked with CPGs for 30 years. "Oftentimes we think this is equated to promotion, but what the vast majority of employees want is true engagement and involvement in their work coupled with a sense of control, so that they know where they are making a contribution to the organization."
Creating a Rewarding Environment
Naturally, before an organization can honor excellent employees who are not climbing the ladder, leaders must know what those employees want.
"One of the things I've seen a lot of grocery retailers focus on is the employee value proposition," says Wendy Hirsch, a workforce analytics expert and former principal at human resources consulting firm Mercer. "They look inward and say, 'What is the experience of working here? What is it that leads some to succeed here and some to struggle? What causes some to stay and some to leave?'"
An environment that recognizes performance – even if it doesn't lead to promotion – is essential to keeping top employees happy.
Creating that environment involves three steps, Angelus says. First, make sure employees know about the organization's purpose, mission, goals and roles, so they know what is important to the organization.
Second, provide "an open environment where employees can ask questions and believe that their ideas and suggestions are heard and acted on," Angelus says.
And third, continually recognize great work by individuals and teams, "so that everyone feels that collaboration, teamwork and engagement are really the culture," Angelus says.
High-performing employees at Kings Food Markets, a chain of 25 grocery stores headquartered in Parsippany, N.J., don't all climb the traditional ladder to success: Some instead show their promise on cross-functional task forces that address specific problems at the retailer.
Kings Food Markets
"The task forces allow us to evaluate some very different skills and challenge people in a different way," says Jessica Gasser, vice president of human resources, labor relations and administration at Kings.
Gasser was a member of the first task force at Kings, which was formed about three years ago. She and six others were given 45 days to find a viable new concept for the store, evaluate it, get it approved and implement it.
"The approach was to tackle a project under a tight time constraint," Gasser says. "The group had to employ skills many had not used before, such as creating a [profit-and-loss statement], and partner with various functional areas that would have to be involved."
Gasser's group met regularly – while still getting their normal jobs done – to develop the Experience Food program, which consisted of events that highlighted the culinary skills of employees and introduced customers to various meat and seafood products.
"We launched the program within the 45 days and ran 90 events from November 10 through the holiday season," Gasser says. "It was a major undertaking, and we delivered it on time and under budget."
The Kings program was designed to test the leadership skills of the individuals involved, and many of those involved have been promoted. But the program also provided a stimulating challenge for quality employees who were not necessarily in line for promotion.
"Depending on the position the employee came from and the individual's appetite for movement, not everyone was promoted," Gasser says. "For example, the customer service manager on the task force continued to manage the process in store and ultimately transitioned it over to what became the cooking studio. It was a terrific opportunity for her."
Other retailers have created special task forces or committees to recognize talented workers who are not on the fast upward track.
"In some organizations, especially flat organizations, the opportunities to move up are small," Hirsch says. "I worked with one organization that brought together a steering committee to focus on rewards and recognition. The members of the committee were high-potential individuals, and being on the committee was a growth opportunity. It was a marker that they were high performers."
Workforce analytics expert
Another way to honor excellent employees is to provide interesting opportunities at other divisions in the organization. Lateral movements can challenge employees, allow them to make valuable connections across divisions, and teach them new skills. If those employees eventually are promoted, those skills and connections will be valuable. But even if they are not, the experience of working in different environments within the organization can help them in their careers and keep them engaged.
"Lateral moves provide the opportunity for an employee to broaden his or her skill set," Hirsch says. "There is always a need for greater collaboration, and one great way to develop that is to give a person exposure to other parts of the business so they have an idea of how all the pieces come together."
Getting the Velocity Right
An employee who is not on the promotion ladder at any given moment could climb onto that ladder at another point in his or her career. Or he or she might always be on the ladder, but move up it much more slowly than others. After all, adhering to the "Reverse Peter Principle" might simply mean promoting certain people more slowly, not knocking them off the ladder altogether. Savvy human resources professionals pay attention to the ladder, who is on it and how fast they are moving, and then try to manage the ladder to best suit the organization.
Hirsch says HR pros call this concept "velocity" – i.e., the speed at which an employee is advancing through an organization – and make adjustments on a case-by-case basis. Some companies and employees suffer when velocity is too high, because the individuals are unprepared for higher positions or have expertise that would better serve the company by them remaining in a lower position. In some cases, speed up the ladder works well because it infuses new talent throughout the organization.
"The goal is to determine what level of velocity really makes sense for your organization and the individual," Hirsch says.
Even when climbing the career ladder seems natural to most employees, only one person will make it to the top at any given organization. For the majority of quality performers remaining at lower rungs, companies should ensure they remain fulfilled with a rewarding work environment, interesting assignments and recognition. Lateral learning opportunities often can make up for a lack of upward mobility.
"My experience has been that retailers are trying to look at the notion of promotions in a broader context," Hirsch says. "They are looking at it from a total rewards perspective."