So how can you ensure that the best people are getting the promotions they deserve?
A good friend of mine recently sat down with his supervisor for his annual performance and career path reviews. The supervisor told him that some of his most valuable qualities are that he is good at keeping the "big picture" of the company in mind when making decisions and suggestions for improvements, and he is proactive, often improving failing processes before they reach crisis proportions. In addition, he is conscientious and hard-working, and requires little to no supervision.
In the same breath, the supervisor told him that his expected career path does not include promotions into management. Now if those qualities don't make him management material, I don't know what does. And his supervisor has assured him multiple times that he is one of the biggest contributors.
The people who do tend to get promoted at my friend's company are the ones who have the ability and opportunity to interact with upper management. Their job performances may be average or even marginal, but because they appear in the upper management spotlight more often, they are thought of for promotion before others who may be more deserving.
This creates problems. Not only will the company eventually lose some of its best employees because they will go somewhere they can get promoted, but the company may be hurt in a different way. If the people you're placing in important management positions aren't those who can take the company to new levels because of their abilities to continually improve processes and procedures, then the company might find its growth coming to a screeching halt.
The answer is to make sure your company is identifying the right people for promotions by considering people outside those upper management usually thinks of. Look at performance reviews and check with supervisors instead of managers or upper executives -- you might be surprised at the talent you have available.