It’s Time to Rethink Promotions

Let’s say you have a great team and they are getting results. That means when annual performance reviews roll around, they are gonna want to talk money. And promotions.

But before you change up your employee structure too much, take a moment to really think about promotions. Chances are the corporate world has trained you to think promotions always mean giving an employee more responsibilities and direct reports.

The problem with that is not all folks are cut out for management, no matter how competent and talented they are.

For example, just because a salesperson is excellent at closing sales doesn’t mean they will be as good at managing a team of salespeople. Those positions require two very different skill sets.

Startups and entrepreneurs are in a unique position to shake up the old way of rewarding exceptional employees. While many companies make advancement decisions on an annual basis, startups aren’t tied to the calendar that way. Things change rapidly in this world, and our staffing decisions often reflect those changes.

So we’ve been using a different kind of promotion strategy.

May we present what we lovingly call:

The Blaze-Your-Own-Path Model

It takes a certain kind of employee to thrive in a startup — those who like a fast-paced work environment and loathe the status quo. Understanding that about our team, we developed a unique approach to career advancement.

We encourage our team to find their own niche and give them the tools they need to pursue it. If it works out, we talk titles and compensation.

Not all folks are cut out for management, no matter how competent and talented they are.

So say a member of our operations team consults with lenders every day. That employee is in a perfect position to find out what lenders want and how we can work with them. All they need is a viable plan and management approval to start a lenders team and leverage those relationships.

Sometimes, advancement exists in another department. In fact, a few members of our sales team started helping out with projects in other departments to see if they like the work. So far, a few of our employees made the leap from sales to underwriting and compliance roles this way.

If it gets results, we make the position official. It allows both us and the employees to see if the role is a good fit.

Sounds wild, right? But hear us out.

Why It Works

The BYOP Model benefits the company and our employees in a few key ways:

• It shows the position is necessary and vetted. This is a big one. Allowing our employees to field test new positions before formally moving into the role allows them to see if they like the work they’ll be promoted to. It also lets us see how beneficial the role is.
• It builds trust. Letting our team members assess, plan, and pursue their own career paths (with input and guidance, of course) shows them we trust their expertise. It also wins them company-wide trust and respect when they succeed.
• It increases job satisfaction. Research shows when employees have autonomy, they are more satisfied with their job. And studies show satisfied employees are more productive and engaged with their work. Win-win.
• It avoids the Peter Principle. The Peter Principle posits every employee is promoted through a company’s hierarchy until they reach a position they can no longer excel in, so they stay in that role because they can’t be promoted past it. According to this principle, every position in a hierarchy will eventually be filled with employees who don’t have the competence to match their roles. We avoid that because we never promote someone to a position they can’t thrive in — they’ve already demonstrated competence at what we’re promoting them to.

The theory behind this strategy is that folks who are driven will self-select themselves for tasks they want to take on and roles they want to fill. It’s that autonomy and motivation, we believe, that makes our team so different.