A friend asked me recently about one of his reports. He had a few concerns going into annual review calibration. His employee was a smart, strong, consistent contributor, well beyond entry level and independence (see Level up for reference), but he had plateaued. My friend was concerned that his employee didn’t recognize he had plateaued, and that he might calibrate poorly against his peers who still have growth potential.

Managers and employees frequently fret about plateaus and growth potential—especially around review time. At what level is it safe to plateau, if any? Does a lack of growth potential mean a 4 or 5 review? Are people who’ve plateaued delusional if they don’t see it? Allow me to clear this up—growth potential is a fairy tale and plateaus are nothing more than places to regroup. Think I’m delirious? I think you’re clueless.

Eric Aside

In Microsoft’s current rating system for reviews, a 1 means an employee rates in the top 20 percent relative to peers in the same discipline and level band, a 2 indicates the next 20 percent, a 3 is the middle 45 percent, a 4 is the lower 10 percent, and a 5 indicates the employee is in the bottom 5 percent. Rewards are directly determined by an employee’s rating (with the very top 5 percent receiving extra). Reviews happen once a year during the summer, though many divisions have a midyear calibration to help determine promotions and recognize performance issues.

What... what seems to be the problem?

There are two different issues revolving around my friend and his employee: the nature of plateaus and the value of growth potential. Let’s take them one at a time.

  • Are plateaus permanent? Nope. Sure, everyone has limitations, and a man’s got to know his (just ask Hal Holbrook). However, put the right people in the right situations and they can surprise you. When people plateau, that simply means they need to regroup, consider their situation, and either accept the plateau because they love their work or pursue a different situation that better suits their gifts—even if that situation isn’t at Microsoft.
  • Is growth potential valuable? Nope. Growth potential is an intoxicating fantasy born of those who remind you of people you admire from long ago who became great (like yourself, I’m guessing). You know what is valuable? Actual growth. Actual results. We should hire people who show potential, but only reward them for realizing it.

Eric Aside

Microsoft’s review system used to place value on growth potential. Thankfully, since 2011 that is no longer the case. The review system is now solely based on demonstrated results over time (both what and how).

I can't go any further

What should my friend do about his employee who doesn’t realize he’s plateaued? Treat him like he hasn’t. Give the employee assignments appropriate for his continued growth. Either the employee will do well, proving the plateau was temporary, or the employee will fail to excel, sending both of you a clear message that you can discuss.

Mercurial managers might mention, “But what if the employee fails miserably? We can’t risk our business on someone who’s clearly not capable of reaching the next level!” First of all, cut the assumptions—they’re bad for you and your employees. Second, any high risk assignment should have a mitigation plan. If you don’t have one, stop being a manager—you’re incompetent (worse than plateauing).

They expect results

Will my friend’s employee calibrate poorly against his peers who still have growth potential? That depends—what did his employee accomplish this fiscal year? How does that compare to his perky peers?

People with stalled career growth can still achieve more than their current peers—much more at times. Their perky peers may be less experienced and make more mistakes, technically and interpersonally. We shouldn’t reward perky people for their poor judgment, poor behavior, and poor results. Ignorance is a reason, but not an excuse. Our current rating system values proven results, not postulated potential.

“But if we don’t pay them extra, how do we retain people who have growth potential?” Help them grow! Give them stretch assignments to challenge their abilities and accelerate their learning. Give them mentors to teach and guide them through all the twists and turns of real experience. Give them thoughtful, constructive, and actionable feedback that hones their skills. Treat them with the respect and dignity that rewards people for exceptional work, not hotness.

Are we there yet?

What if you are the employee who has plateaued? What’s your next move? That depends. What do you want to accomplish…with your life? What role best puts you on the path to achieving your goals?

Knowing what you truly wish to do with your life is critical to happiness and true success. The trick is knowing which “you” to follow—ego, heart, or spirit.

  • Following your ego means chasing your perception of success through others’ eyes. This path may lead to fame and fortune, but people can end up feeling isolated, lonely, and hollow.
  • Following your heart means pursuing what makes you happy at your core. This may not lead to western culture’s vision of success or even a steady paycheck, but it does lead to happiness.
  • Following your spirit means seeking a higher calling for your life and serving a greater purpose beyond yourself. This path yields powerful feelings of connection and meaning for your life. It can also lead to cults and sappy memoirs.

As with all things, you want a balance: ego to help you earn a living, heart to make you happy, and spirit to provide meaning in your life. Too much of any one of these can lead to trouble.

One thing I’ve learned after a long career is that when you need to make a choice, and the options are balanced with no clear favorite, go with your heart. Your ego is insatiable and your spirit is with you wherever you go and whatever you choose. Your heart knows what truly makes you happy.

Eric Aside

I wrote about being fulfilled at a plateau in “When the journey is the destination” (chapter 7) and how to best use your heart (gut) to help you make decisions in You have to make a decision.

It takes all kinds

What advice did I give my friend with the plateaued employee? Don’t assume the employee has plateaued. Give him assignments appropriate for his continued growth, mitigating in case he falls short (true for any employee assignment). Discuss his strong results at calibration—ensure he’s alongside those with similar proven results (not imagined). If the employee falters, take time with him to discuss his true aspirations as a balanced, complete human being. Help the employee choose a career path in line with his unique skills and personal vision.

We don’t give up—we evolve. We don’t reward potential—we shape it. Great people come together at Microsoft to change the world. We need every talent and every insight. Instead of fretting about plateaus, we should be helping each other realize our dreams. When we do, we turn those dreams into a reality for the world.