Your career has a harsh teacher. During the fourth quarter of the year, four events happen that impact your job, salary, promotability, and ability to continue your good job. The fourth quarter is usually one of the busiest for managers — and that is what impacts your job. Let’s take a look.
Budgets are determined for the following year
No big deal for you, right? Wrong. That budget number that comes out for next year has one big part in it: salaries and benefits. If it was a good year and the budget gets increased for salaries and health insurance companies don’t take the entirety of the benefit budget increase, that budget will decide the pay increase ranges you can receive along with your review.
Remember, companies will increase salaries by an average. If the average is 2%, some people will get 4% and others will get 0% increases depending on your performance review.
Your performance review rating is determined way before your review is given to you
Now, watch how this flows. The manager in your group responsible for the budget now has a number to hit once salary and benefit increases are determined. That means the total number of dollars available to hand out for raises is now determined for that manager’s group.
Now add in some criteria around how many “Outstanding” versus “Needs Improvement” ratings you can hand out and you now have how many people — including you — can get the best raises from the ratings and salary budget dollars available.
And how does a manager know if he or she will hit the budget target? By getting all the ratings and rankings in, calibrating the rankings and ratings, and then deciding your raise. You will notice you had no input into that; your review is already done before it is written. In fact, if your review is supposed to happen in December, most likely all of this was determined in…October.
Like in a couple of weeks..
Your goal achievement now is what counts, not what it is at the end of the year
Watch how this flows. Managers have to prove your performance rating and the usual largest percentage of your performance review is based on how well you have achieved your goals. Now, a manager can’t figure out where you’ll be on goal attainment at the end of the year, so what will that manager take for information? Right where you are at the end of September. Not December. It’s (almost) as if the last quarter of the year doesn’t matter in terms of what you do to meet your goals — the performance rating and your raise are already determined no matter what you do in November and December.
Few companies have a process in place where they count the full year of your goal attainment. How are you doing on your goal attainment now?
Next year’s goals flow from the budget story for next year
I like to say that every number has a story. If the statement is that sales need to increase 5% next year, then a Sales Manager better be able explain where the 5% will come from. It could be rolling out a new product or increase penetration of products into accounts, or winning three big deals missed this year, or…well, there’s a thousand ways to get to a number and your manager should have already figured out how they will get their number.
That story of how to get to a number flows into what your goals will be for the next year. If you are a sales person and your sales manager thinks the new product will increase sales by 5%, you can bet your bottom dollar that one of your goals for next year will be to sell that new product to hit the manager’s goal.
That means you need to understand what the budget is all about in the fourth quarter because your goals for next year — the primary part of your next year’s performance review — is set up in the next three months.
There are tactics for dealing with all of this, of course. It’s why I have a product on how to build killer SMART goals. And that SMART goal product incorporates into another product for getting the best performance review possible.
Regardless, the next three months in your company has a big impact on your career. Are you ready?