Is it groundhog day ... all over again?
I am a fan of the hysterical Bill Murray movie, Groundhog Day. For those of you who have no idea what I am talking about, consider watching the movie. For those of you who have no interest in doing so, here is a summary.
Bill Murray is a weather man who goes to film the groundhog, Punxsutawney Phil, Phil comes out his home to predict an early spring or if he sees his shadow, six more weeks of winter.
The twist is, Bill Murray gets stuck on Groundhog Day—living the same day over and over again, adding a series of comedic activities to make his repetative situation, bearable. Eventually, he gains understanding and acceptance, and changes and so the day does too.
How is this relevant when introducing the topic of performance management? It is because I see us bringing “new ideas” about performance forward—thinking they are truly novel, only to find out that people have been cycling through those ideas for years. They try them, move on, try them again, move on, call them something else, get new leaders or sponsors, and try again. There has been no topic in the human resource space that has had more revision and discussion than performance management.
People talk about their “new” approach to performance management in various ways. I’ve heard many ideas, including:
Focusing more on feedback by uncoupling the money conversation from the feedback or development conversation.
Having the pay discussion at a different time of year than the feedback discussion.
Reducing the number of ratings or eliminating ratings altogether.
Going from one conversation a year to quarterly conversations, minimum.
Uncoupling pay from the performance rating—making pay a function of business performance without an individual component.
Eliminating lengthy calibration sessions.
While these actions can move organizations forward, they are not game-changing, and have been tried in various forms for years. Over a decade ago I wrote workbooks and presented data to my peers on giving better feedback, setting goals, cascading business goals, connecting individual performance to company performance, how to have great conversations, development coaching and changing your performance process. They were all good ideas, were implemented in the organizations where I consulted or worked, and they made a difference at the time. However, I don’t think it was a revolution, even though the performance process improved.
When asked, these are common goals leaders identify with the performance management process:
We want to rate performance.
We want to know how to pay people based on performance.
We want to align goals so people are working on the right things.
We want to communicate what good performance looks like for each job.
We need a process of evaluating performance that is equitable.
We need a process for identifying areas of development.
We want to increase the performance of the business.
We need to provide a context for the review conversation.
All of these are practical goals make sense, and they have their place in the workplace. So let’s put them in the context of what people want from work today:
Multiple studies have asked what is most important to people when joining an organization. Bev Kaye has researched careers and employee growth for years.33 Oracle and Talent Strategy Institute has researched extensively what makes a company a talent-magnet company.34
People consistently tell us these things are important:
I am looking for an organization that is interested in me as a person—they care about me, my contribution, my development, and my personal and professional growth.
I want real conversation—great questions—real dialogue. I don’t want some scripted conversation that you could say to anyone—it has to be personal and relevant.
I want development for my current job and I want help developing my skills and capabilities for future roles.
I want peer feedback and connection … and collaboration with the all the people and teams I work with.
I want to be paid fairly and recognized for the contribution I make to the business. If the business does well, I want to do well.
I want a great place to work—someplace that has energy and passion—somewhere that I can bring my best self to work and make a difference.
Values matter to me—I want to work in a place that is authentic, where they mean what they say and support their people.
I want to be in a place that has a purpose, that gives something back—where I can live my purpose.
Trust is important to me—you need to trust me and I will trust you. Trust is earned on both sides of the equation.
I want to be recognized in both big and small ways.
I want you to invest in me as I am investing my life and energy in you.
I want meaningful work.
I want flexibility.
I want challenging work where I can learn from solving a range of challenges.
Social and mobile tools are important to me; they are part of how I live and need to be part of how I work.
Research shows us that we have to do something to change how we implement performance management in organizations.
Research from CEB35 reported that:
95% of managers are dissatisfied with their performance-management systems.
59% of employees feel performance reviews are a waste of time.
90% of heads of HR report that their systems generate inaccurate information.
Now compare the two lists. Will delivering on the items in the first list actually create the kind of workplace that you see in the second list? It seems there are several gaps between the two.
For years we have heard about the futility of the performance review. Check Twitter and you will see many examples.
There’s no reason to keep bringing up the negative. I am 100% antiperformance review. No one likes them. Not even HR.
Ooooh! A surprise performance review at work on a friday afternoon?! Soundsgre.. No, it sounds awful actually.
Feeling completely dejected and destroyed after the performance review I received from the central office.
I don’t wanna do my performance review self evaluation.
Do. Not. Want.
Ahh, performance review, you’re killing me here!
Studies by SHRM36 have reported that:
of HR leaders do not think the annual performance review is an accurate appraisal of an employee’s work.
of HR leaders do not think that their employees are rewarded fairly for their performance.
of performance reviews actually end up decreasing performance.
Start with what matters to you.
One of my favorite stories of how to rethink performance management I heard delivered in a presentation by Peter Block. Peter begins the story by posing a question: ”What if we treated the significant people in our lives the way we treat our employees during their performance review?”
Peter goes on to say: ”What if I went home at the end of the day and said to my wife, ‘Honey, the kids and I have been talking and we think it is time for your annual performance review’?”
Now, you can imagine the laughter in a convention hall when he said that, because we all know that saying that would sound crazy to the significant people in our lives.
Peter goes on with the analogy: “‘Why don’t you have a seat here at the kitchen table? Can I get you some coffee or some water?’ You know people in HR say I have to make you comfortable by getting you something to drink.
“‘Honey, I’ve been talking to the kids, and we’d like to take this opportunity to give you some feedback. Let’s start with your areas of improvement.
“‘First, we’ve all noticed that the house is not as clean as we would like—your performance is declining in that area. Second, we see the quality of meals as going downhill. Last week the meatloaf was dry, and the dog wouldn’t even eat it.
“‘We also conducted a 360 and the neighbors see it too!’” People were rolling in the aisles at this point because we all saw the absurdity of that conversation happening with someone we loved or cared deeply about.
What would you do if you had a relationship with someone you really cared about and you wanted to stay connected to them over time?
Here is what you would do: You would ask them what they care about, who they are, and what is important to them.
You would want to understand what they aspire to become, what their goals are, what they want out of their career and what is important in their lives.
You would want to know how you could help. You would want to offer support, coaching, and mentoring.
You would have honest conversations that are real—and you know they are honest and demonstrate your care and the good that you want for them. There would be no scripts and there would be real connection.
You would ask how you could support them. You would support their learning and development.
That’s what’s real, that is human connection, and it is the best in me meeting the best in you.
As an organization, you are not in the performance-management business, the ratings business, or the calibration business. As leaders, as HR practitioners, we are in the human-potential business. Our job is to help every person reach their full potential—to help them show up in the best way possible, using all of their strengths, capabilities, and gifts to have a fulfilling job, career, and life.
There is a revolution underway—organizations are beginning to abandon old practices in favor of trying something new. Incremental change is giving way to bold action, and individual approaches to engaging every person where they are. In this next section we will look at the performance revolution that is taking place.
What is it? And is it working?
If I were to pick a time period where it seemed that the momentum had shifted in performance management, it would be 2015. It seemed nonstop, as if the tectonic plates that were foundational to performance for so long had moved and the ground beneath had changed. But the shift that made everyone take notice happened in April 2015.
This is when HBR published the article, “Reinventing Performance Rankings: A Radical New Way to Evaluate Talent,”37 and featured it the cover of their publication. It was the headline that inspired radical change. It was the story of performance reinvention at Deloitte—how that company was transforming the way it managed performance reviews. Gone were the days of endless and lengthy calibration and rating sessions.
Enter a simpler way to differentiate performance, focused on having better conversations, supporting employee growth, and reinforcing a development culture. Numeric ratings gave way to having the manager answer questions:
Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus. This measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree.”
Given what I know of this person’s performance, I would always want him or her on my team. This measures the ability to work well with others on the same five-point scale.
This person is at risk for low performance. This Identifies problems that may affect the customer or the team, answered on a yes or no basis.
This person is ready for promotion today. This Measures potential on a yes or no basis.
Now, since Deloitte came into the market to talk about its solution, there has been some debate as to how widely a change like this could be implemented in the broader market, with organizations contending that a change to these four questions works for Deloitte because it is a consulting business—and perhaps the same methodology wouldn’t work for other businesses. The issue isn’t whether what Deloitte did could be implemented in exactly the same way by another business; the real question is: “What can we learn from the performance-management transformation at Deloitte?”
The biggest shift in the approach presented by Deloitte is that instead of asking managers what they think of each person, they were asked what they would do with each person on the team.38 It has become the quality of the questions that matters. In the past few years I have seen organizations start to ask better questions relative to their performance approach and how best to support their people.
After talking with organizations during this time, I created a short list of the questions I hear them asking as they work toward a new design for their performance-management processes:
Do we have a development agenda for each person on the team? What is it? Identify a top development priority for each person on the team and how you would create that development opportunity. It is important to understand this is not about what someone is not doing well—it is about a growth opportunity . It is important to work with individuals to connect them with other people, internally and externally, who can help coach and mentor them.
What is the best place for this person in our organization? Where will they be the most successful? We know that the fit for the role is the most important thing. A high performer placed in a role that is a bad fit is still a bad fit. Too often, organizations wash their hands of all responsibility when someone is not an optimal fit for a job—they tend to blame the person. The right question to ask is: “Does this person’s current role leverage their skills and capabilities for the benefit of the organization?”
What makes this person a key player? Or conversely: What gets in the way of this person performing well? Asking these two questions will help identify skills and capabilities that ensure success within the organization. In addition, you may discover there are systematic issues inhibiting individual performance, and be able to address them.
What would be this person’s next job? This is an important question to ask if you are looking to build your talent pipelines and better understand the strength of your team.
How could this person be a coach or mentor to others? Building a collaborative network where people can reach out to team members across the organization is really powerful. Developing and creating connections is important to flexibility in work—can I work anywhere, anytime, with anyone?
The fact that people are asking more questions and taking a broader perspective on performance is a very good thing. The shift from a process focus to an individual focus has significant impacts for today’s workforce. It is no longer about process; it is about asking the employee questions to understand their goals. The focus on performance is the number one priority; it is personal, striving to connect with you as an individual, designed to help you have a great career, accomplish great things, and make a significant contribution to the organization.
After the HBR article in April of 2015, other headlines further propelled the revolution. In July that same year, the Washington Post ran the headline... In a big move, Accenture will get rid of annual performance reviews and rankings.
CEB reported that:
95 percent of managers are dissatisfied with their performance process.39
90 percent of HR leaders indicate that their current performance process does not yield accurate information.40
6 percent of the Fortune 500 have eliminated ratings.41
Furthering the business case for change, only 14 percent of organizations are happy with their performance-management systems.42 And only 8 percent of organizations surveyed said that their performance-management process drove high levels of value.43 For the past two years, Deloitte has reported that 89 percent of organizations have changed or will change their performance management.44 Perhaps the biggest reason organizations want to do something different is the cost of their performance process and the little value that it yields. The average company with 10,000 employees spends US$35 million annually to conduct performance reviews.45 As momentum was gathering for organizations to begin to change their performance processes, not all companies were going to move ahead with changes. That same year we saw the beginnings of a revolution where more organizations were staying the course rather than adopting radical change.
HCI did a study of performance practices where they found that only 12 percent of organizations had eliminated employee ranking or ratings in the performance-review process, with 62 percent reporting that they were keeping ratings and rankings.46 I suspect the reason is because performance management is a complex set of practices and behaviors that is not simple to change.
If you’ve followed the trends, it is clear the biggest issue with performance management is that is does not often improve performance, so organizations are open to trying new ways to connect it to the business through relevant conversations. Organizations see frontline managers as critical to change. One of the biggest challenges is that frontline managers often do not have the skills and capabilities necessary for new performance behaviors.
Can frontline managers be good coaches and mentors?
Are they able to go from performance as an event to performance as a relationship?
What we are talking about here is a fundamental change in what it means to lead and manage.
It is not the process that is central to the discussion, but the relationship. The relationship matters—and it is the conversation in that relationship over time that creates the development discussion and performance improvement. In fact it is about unlocking the potential of every person.
The Biggest Performance Shift
Many organizations are abandoning the “here are your weaknesses” approach in favor of a more constructive conversation that is future-focused. It involves talking with people about their goals and aspirations and helping them build a career plan within the performance conversation. There are now multiple products that provide some structure to the checkin discussion to ensure that there is continuity to the conversation and support for the individual over time.
Marshall Goldsmith created a tool to help support positive development and productive feedback conversations.47 He calls it feedforward, and it is an excellent tool to use for improving the quality of your relationships.
We can change the future. We can’t change the past. Feedforward helps people envision and focus on a positive future, not a failed past. Athletes are often trained using feedforward. Racecar drivers are taught to look at the road ahead, not at the wall. Basketball players are taught to envision the ball going into the hoop and to imagine the perfect shot. By giving people ideas on how they can be even more successful, we can increase their chances of achieving this success in the future.
It can be more productive to help people be right, than prove they were wrong. Negative feedback often becomes an exercise in “let me prove you were wrong.” This tends to produce defensiveness on the part of the receiver and discomfort on the part of the sender. Even constructively delivered feedback is often seen as negative as it necessarily involves a discussion of mistakes, shortfalls, and problems. Feedforward, on the other hand, is almost always seen as positive because it focuses on solutions—not problems.
Feedforward is especially suited to successful people. Successful people like getting ideas that are aimed at helping them achieve their goals. They tend to resist negative judgment. We all tend to accept feedback that is consistent with the way we see ourselves. We also tend to reject or deny feedback that is inconsistent with the way we see ourselves. Successful people tend to have a very positive self-image.
Feedforward can come from anyone who knows about the task. It does not require personal experience of the individual. Feedback requires knowing about the person. Feedforward just requires having good ideas for achieving the task.
People do not take feedforward as personally as feedback. In theory, constructive feedback is supposed to focus on the performance, not the person. In practice, almost all feedback is taken personally, no matter how it is delivered. Feedforward cannot involve a personal critique, since it is discussing something that has not yet happened. Positive suggestions tend to be seen as objective advice; critiques are often viewed as personal attacks.
Feedback can reinforce personal stereotyping and negative selffulfilling prophecies. Feedforward can reinforce the possibility of change. Feedback can reinforce the feeling of failure and can be perceived as reinforcing the message, “This is just the way you are.” Feedforward is based on the assumption that the receiver of suggestions can make positive changes in the future.
Most of us hate getting negative feedback, and we don’t like to give it. In a review of summaries of 360-degree feedback reports for more than 50 companies, the items “provides developmental feedback in a timely manner” and “encourages and accepts constructive criticism” almost always scored near the bottom on coworker satisfaction with leaders. Traditional training does not seem to make a great deal of difference. Leaders are not very good at giving or receiving negative feedback, and it is unlikely that this will change in the near future.
Feedforward can cover almost all of the same material as feedback. Imagine that you have just made a terrible presentation in front of the executive committee. Your manager is in the room. Rather than make you relive this humiliating experience, your manager might help you prepare for future presentations by giving you suggestions for the future. These suggestions can be very specific and still delivered in a positive way. In this way, your manager can cover the same points without feeling embarrassed and without making you feel even more humiliated.
Feedforward tends to be much faster and more efficient than feedback. An excellent technique for giving ideas to successful people is to say, “Here are four ideas for the future. Please accept these in the positive spirit that they are given. If you can only use two of the ideas, you are still two ahead. Just ignore what doesn’t make sense for you.” With this approach, almost no time gets wasted on judging the quality of the ideas or proving that the ideas are “wrong.” By eliminating judgment of the ideas, the process becomes much more positive for the sender, as well as the receiver. Successful people tend to have a high need for self-determination and will tend to accept ideas that they buy, while rejecting ideas that feel forced upon them.
Feedforward can be a useful tool to apply with managers, peers, and team members. Rightly or wrongly, feedback is associated with judgment. This can lead to very negative—even career-limiting—unintended consequences when applied to managers or peers. Feedforward does not imply superiority of judgment. It is more focused on being a helpful “fellow traveler”. As such, it can be easier to hear from a person who is not in a position of power or authority.
People tend to listen more attentively to feedforward than feedback. Normally, when others are speaking, we are busy composing a reply. This is particularly true when receiving negative feedback. In feedforward, people are free to listen to what is being suggested because they feel less defensive. Most often when using feedforward, the response is “thank you.”
Feed-forward changes the performance dialogue to more of a coaching, supportive learning experience. How can you make changes to have more meaningful interactions? Think about the conversation as:
Having a focus on skill and capability building so you can develop in the role you have today and build for the future. You want to prepare for the possibility of future roles and create a career plan to get there.
Having multiple sources of feedback. This isn’t about just having a 360; this is about multiple sources of feedback in real time using social and mobile tools. The difference between a traditional review and a conversation in the context of a relationship is that relationships are not discrete events—they grow and evolve over time. You may want
to use a social team site for goals, feedback, and collaboration. You should collectively celebrate success with the team, connecting and giving support and feedback—you’ll build a stronger team and increase collaborative performance.
Using mobile technology to bring the conversation into the natural flow of work—help people respond using mobile technology and support people having a discussion in real time.
Organizations are finding that they need to make investments in technology in order to enable the performance relationship in real time. As you create your performance strategy, you will need to evaluate the technology and the tools necessary to create better dialogue going forward.
In the next two performance sections we’ll look at where we are today roughly two years after the start of the revolution, and at what people are doing today that is creating a real difference.
If you are thinking that performance-management approaches in organizations fall on a continuum that looks something like this, you would be right:
In this section, we will answer some fundamental questions on how to approach performance management. Some might be simple for you based on where your organization is. Others may present new ideas that inspire change for what will work best for your organization.
In most performance-management conversations, we hear the question: “If you eliminate ratings and calibration sessions, how will you pay people?”
To help answer, HCI did a piece of research on what was happening with pay and performance management.48 Earlier that year, we saw the momentum shifting to organizations exploring new approaches.
Here is a summary of what they found:
31% of responses indicated that pay would be determined by company performance, and bonuses would be allocated by pay grade.
31% of respondents said they would benchmark employee performance against established goals.
23% said that they would give managers a lump sum to allocate bonuses to their teams. There was no mention as to how the allocation would be made.
19% said that they would remove the “money” part of the conversation from the review, but HR and managers would use ratings to allocate bonuses.
15% said they would give cost-of-living raises to all employees.
10% said that they would allocate uniform bonuses based on company performance.
6% indicated that pay would be influenced by changes in market performance, and that they would allocate bonuses by pay grade.
2% said they would drop individual bonuses or rises altogether.
2% said they would offer more stock options to employees.
2% indicated they would base pay on peer performance.
2% indicated that they would allocate uniform bonuses based on changes in market performance.
Given the wide range of practices bubbling up in performance-management transformation, how can you know what you should do? To help guide your journey, here are the six dominant trends and best practices.
Decouple development from the pay conversation.
Recently there has been a significant shift away from having the pay conversation in the same review or meeting where development planning is discussed. Some organizations have even gone so far as to have the two separate conversations at different times of the year. As a practice, I believe if you want someone to actually hear the development conversation, you have to decouple it from the rating or money part of the conversation. Real development shouldn’t be a one-time-a-year discussion. It has to happen in the context of the work,
in the container of the relationship between manager and team member. A limiting factor here is that you have to have managers that are capable of building meaningful relationships with their team members so that development discussion is engaging for the individual. I am not saying that people have to be best friends—rather, I am advocating an attitude of respect, an understanding of differences where they exist, and a sincere desire to understand and to help the individual.
Include leader development in your approach.
Developing managers and leaders during performance conversations is a key to success. While some organizations believe that the best approach is feedback training or conversation coaching, I believe it is more than that. I think it requires an understanding of what people want from work. It is essential that managers learn which leadership behaviors create trust, support
inclusion and connection, and create an engaging culture where people can do their best work. No conversation guide can do that—yes, you can learn how to ask great questions, and develop coaching skills, but it is how you show up as a person that (in large part) determines your ability to connect.
Figure out where competencies fit.
I am often asked where competencies fit into all of the changes in performance emanagement practices. Should you use them or not? Should competency development influence pay? Competencies, in very specific terms, help you define the behaviors you expect
to see in reference to what you have determined to be important to individual and organizational success. Telling people what you expect is important—creating simple ways to communicate “what it looks like” and the expected outcomes.
Competencies often look different depending on the job level—for example, results orientation looks different for an individual contributor versus a manager, but both are accountable for results within the scope of the job. One area I recommend avoiding is using competencies as the sole way of judging a person’s performance.
I worked with one organization that had a set of sales competencies, and each year each salesperson’s performance was evaluated against those competencies. There was an overall competency rating that was then translated into an increase in pay (or not). Here was the disconnect: This was a sales organization that did not pay on sales performance—it paid on competency ratings.
Before long, they had high turnover in their sales force. If you were a fantastic sales performer but didn’t get great competency ratings, the outcome would be a negative impact on your pay.
Ideally in this situation, the sales force could be paid on both—perhaps something like 75 percent on sales performance and 25 percent on organization competency development. Ultimately, you have to create a performance-management approach that supports what you want to deliver as an organization. If you want to grow sales, focus on rewarding and growing great sales capability and capacity in the organization. If rewards aren’t connected with what you want to deliver, you will not get the results you desire or expect.
Understand that performance management is not a standalone experience in an organization.
It is an integrated part of your talent engine and has to be connected to onboarding, career planning and development, learning, and talent review/succession planning.
It all starts with what you expect from people at work. What does good look like for a particular job? If you tell people what you expect of them, upfront, in the onboarding process, it can have a dramatic impact on results.
Aberdeen Group reported that 96 percent of employees were retained after the first year when onboarding and performance were connected. This compared to only 18 percent being retained in companies where the performance-to-onboarding connection was not present. In addition, 82 percent of people met their first-year goals when performance expectations were part of the onboarding process, compared to only 3 percent in organizations where that connection was not present.49
It is important to include performance results when doing talent review and succession planning. It’s hard to talk about next roles or promotability without understanding the results an individual has delivered. I have been in talent actual reviews where we talk about potential with executives who don’t want to take
performance into account. The results matter; delivering great performance matters. So the performance thread that begins when someone comes into the organization should be a part of career conversations, talent review, and learning, in whatever way makes sense for you.
Decide what to do about goals.
If we eliminate ratings or calibration, should we still have goals or a formal goal-setting process? This is a frequent question as people begin to rethink performance management. And perhaps with where we are today, it is not a simple yes or no answer. People need to know how their work connects to the broader work of the organization. How does their individual performance drive both team and organizational success? Is it a formal goal cascade?
In some organizations, yes. Is it all about team success, collaboration, and a collective view of performance? The answer here, too, is often yes. Performance management will look different depending on the organization. I believe it is essential to have a way to connect what people do every day with how the organization performs. Establishing goals is a way to accomplish this, and goal-management tools can help you be consistent in measuring performance.
We have known for over two decades that what the goals actually are shapes employee performance. In 1990, Locke and Latham reported that specific and challenging goals led to better goal performance than vague or easy goals.50 This hasn’t really changed. Making progress toward goals can help foster self-confidence and a sense of accomplishment.
There are great social and mobile tools in HCM solutions today that can help teams and individuals plan and track achievement of milestones, foster collaboration between team members, and view the necessity of course-correcting when appropriate.
Goals can also provide a map for everyone in the organization by explaining where you are going and how you can get there. Whether or not you decide to cascade goals is dependent upon what is important in your organization, and how you want to get the work done.
Simple guidance for cascading goals:
First, begin by understanding what a goal cascade really is. It is a process of deconstructing and translating goals from one level of the organization to the next. In the deconstruction process, each individual’s role and the outcomes of their work need to be connected to the overall team and/or company goals. As goals are translated to individual work, it is important that people can actually do the work that is assigned to them, and that they can see to how that work connects to the larger objectives.
Here are guidelines for cascading goals:
The employee needs to be able to do the work; people can’t achieve a goal that is not within their scope of influence or current capacity.
The employee must have the tools, resources, and access required to get the work done.
Expectations must be well defined, and the employee must have sufficient time and bandwidth to meet milestones.
Goals must be reasonable. The challenge of a stretch goal can be invigorating; an impossible target will certainly be frustrating—and can be demoralizing.
Managers must be prepared to offer guidance and coaching.
Decide whether to institute quarterly check-ins.
As people have asked for more feedback and coaching, many organizations have instituted tools for check-ins. I have talked with organizations that have instituted frequent check-ins—from weekly to quarterly. My concern with relying on scheduled conversations is that they can become contrived, and managers may come to see them as a burden rather than as an opportunity to get to know their people and work with them in a deeper way.
The check-ins with an individual should suggest a minimum number of contact points that are career-development-related. If we are focusing on building better relationships with people, the conversations need to be organic as well. Connecting in real time is important, and that is where social and mobile tools can be empowering. People often refer to new ways of giving feedback as continuous feedback.
Where is performance management going; a new value proposition for every one of your people.
We are glad you are here. We think your unique talent and gifts will help our organization move forward, and with you we will accomplish great things. As part of this team we will work together to connect what you do with the overall performance of the organization. We want you to be able to see how you
connect to the business and how what you contribute makes a difference. We believe that coaching and development should be part of how we connect—they’re not an event that happens just once a year or once a quarter. We want you to ask for help, rely on the team, help others, contribute to the best of your ability, and take responsibility for your own learning and development. We will provide help, tools, resources, coaching, and mentoring, but learning involves both you and us. We will pay you fairly for the work you do and if the organization does well, you will do well.
We want you to make a career here and we will support you in learning and growing through different roles and assignments. We want you to feel like you belong here. We will communicate with honesty. As an organization, we will live our values every day, and we will create a culture where you can do your best work and thrive.
In the next section we will look at new ways of working, from positivity to living habits that connect individual performance, organizational performance, and self-development. Performance management is a broader conversation than just goals and evaluation. It is about empowering others, and making room for the conversation on how happiness contributes to organizational success. We will look at appreciation, and saying thank you. It will be personal, inspiring, and will help you to unlock individual potential.
First step: Define the purpose of performance management in your organization.
In the strategy piece by Accenture Is Performance Management Performing? 51 they asked about the effectiveness of current performance-management processes. In just about every area important to an organization, these processes were pretty ineffective.
Based on this information, organizations can justify that this is why there are performance-management processes in the first place: to get better results, to grow people, to retain people, and to embed cultural values. Yet with the way we implement performance management today, we can sometimes fall short of the desired results. When Deloitte reported that 86 percent of organizations had said they were looking at redesigning their performance-management processes, clearly a shift was under way.52 Approximately one third of these organizations are moving forward with a redesign, and are looking for new ideas and new approaches to improve the way to connect people to results.
Let’s look at how you can innovate performance management. According to Accenture, business leaders identified seven ways they are using performance management.
The Top Seven Ways Organizations are Using Performance Management
Traditional approaches to performance management are often backward-looking snapshots of performance over a period of time—the year, the quarter, or the month. In today’s fast-paced environment, where conversations happen at the speed of connection, a performance review that happens once a year and only looks backward is outdated. Connection and collaboration need to happen during the course of the work. Individual and team goals often intersect, and you need the collaborative effort of others to accomplish work that delivers great performance and achieves goals. With social and mobile tools, you can have team sites where members can track progress on projects or goals, offer help to others, celebrate successes, offer creative solutions, and solve issues as they happen—not after the fact.
Using social tools to raise the level of team performance.
A lot has been written about organizations implementing continuous feedback. Put simply, it is feedback that happens in the context of the work and, more importantly, in the context of the relationships that already exist. Within the context of the team, the project, and the work, there are applications and tools that help people give feedback during the flow of the work and within the relationships. When organizations want to make feedback a central part of the ongoing performance dialogue, they are noticing and making a commitment to the individual that their growth is central to how work is getting done. It is also important to understand the
intent or the orientation of the feedback. Organizations can take a weaknesses approach to feedback—in other words,
“I am always watching for what you are doing wrong and I will point it out to you.” I have seen managers vigilantly on the lookout for the one error just so they can point it out in the sea of great performance by their team. When talking about a feedback culture, giving punative feedback is not what works.
Communicating a clear intent to focus on employee growth and development is important. Positioning the feedback tools so people know how to use them is essential.
The focus of a feedback culture or
feedback in real time needs to be on:
Collaboration on the work
Individual and team contribution
Highlighting the impact on the
business and team results
Planning for success (using
tools like feed forward)
Thanking people for
When you engage people in problem-solving, or in this case, improving performance, it is important to focus on solutions versus issues or problems. In a study by the Institute for Applied Positive Research, they highlighted that when people are exposed to solutions to a problem they could take action on and solve independently, they had a 20 percent increase in creative problem-solving, compared to being exposed to solutions that were not personally actionable.53 Extending this thinking to how we solve for problems and offer feedback, we can see that:
Feedback is always personal and individual—the more that people can take action, the more meaningful it is to the individual and the more it sparks creative problem-solving.
Focusing on what is actionable within the scope of the work has a positive impact—whether it is with goals, feedback, project planning, or financial targets. What you are solving for—the goals, and the targets—has to be within the scope of the people, the jobs they do, and how they contribute to the work. Setting stretch goals for an organization disconnected from the work people do can have negative impacts on performance. If people have stretch goals they cannot impact, and the goals are not accomplished despite their best efforts, it is disempowering. If compensation is tied to outcomes, and the outcomes are such that individuals could have little or no impact on the goals, you are creating a recipe for failure. Over time this creates a culture of resignation, rather than engagement. Over time, organizations that manage performance in this way are more likely to experience higher turnover. In a candidate-driven market, that is a risky business.
I heard best-selling author, Michelle Gielen, present at the Work Human 2016 conference. I was immediately drawn to the power of her message to change organizations. I identified three key transformational messages from her presentation:
Focus on meaning.
You need to say something that has meaning to the individual—personal to them. Create a moment where they can say, “My behavior mattered.” Saying someone did a good job is not as meaningful as saying, “The solution you offered changed the results of the project by helping us improve our product and our performance.” I used to run training sessions for managers on how to improve their performance dialogues with their team members. One manager offered his secret to successful feedback: “Have something in your back pocket that
you can say to everyone and it works for everyone.” He continued to say that his standard feedback phrase for all employees was, “You rock!” He contended that this works for just about every situation because who doesn’t want to think that they “rock”? Unfortunately, there is nothing specific, personal, or meaningful in this phrase. It may for a moment create a “feel-good” exchange, but this is likely purely transitory. Behind the feel-good moment are: “Why do I rock?” “What is special about me?” “How did I make a difference?”
Change your story, change your power.
This reinforced for me what we have known from our experiences with others: Language matters. The words we use and the feeling and sentiment they convey shift emotion, energy, and focus. For example, when a manager positively says, “We had some successes and identified things we would want to do differently next time; what do you think we might want to change?” instead of, “Well that didn’t go as badly as it could have!” the outcome completely changes. I have heard managers use the latter at project reviews and then fail to understand why people are not energized and engaged on the next project.
If you want to accomplish something great, the language of positivity can significantly help you move toward creating the results you want. When
a team or an individual takes on a complex task, a positive approach that fosters engagement is critical for success. Saying, “I know this is really difficult, and I don’t think we are going to deliver the results we wanted. So many things are working against us, and the problems seem insurmountable” will not inspire. With that approach, you’ve already stacked the deck against accomplishing the desired goal. Instead, change the tune to, “We are working on a project with a lot of challenges. People are assigned according to their area of expertise and we have a great plan to achieve our goal!” Always provide the positive experience for your workforce; it will continue to reap rewards.
“You get what you give.”
I would refer to this as the positivity/performance law of karma. Some years ago, after I had made a move across the country and got settled in my new home, I started to explore my neighborhood. Just down the street from me was a small center for mindfulness and meditation, and you could sign up to attend lectures on various topics. At the end of one session, I spoke to the teacher about karma, and I asked for his explanation. What he shared with me was simple and profound in many ways. He talked about how we respond to the events in our lives, and how we make decisions, the actions we take, the thoughts we have, the choices we have, and what we do with them. For every thought, every action, decision, and choice, you are sowing a seed. Over time, these seeds are numerous …
and thematically people tend to sow seeds in a similar vein. In time, the seeds produce a harvest of sorts that comes back to you. So what you have put out is the only thing possible for you to receive. Karma is not the simple thing we often assume ... you do something nasty and something nasty comes back. It is that you have sown a garden of certain types of actions, words, and decisions, and that is your harvest.
As a leader, as a team member and as a peer, living in a great-feedback culture is a lot like sowing seeds. If you support people, help them grow, share your talent and inspire them to share theirs, you have a great garden. When you are authentic, live your values, and provide the tools necessary for people to succeed, they will want to do great work because of the connections you share, how you collaborate, and how you celebrate team success. When creating a high- performance culture, think carefully about what you give, because that will shape what you receive.
Why should you care about positivity and how it can help the performance of your organization? Because it can have a dramatically positive impact on your results.
On the Goodthink website, where this work is highlighted, positivity translates into workplace productivity and company success.54 The positive brain is connected with increasing sales by 37 percent, productivity by 31 percent, and 23 percent better performance scores.55
I once had the opportunity to work on a technology solution with W. L. Gore and Associates (Gore). During this work, I learned about how they implemented their performance—management solution. They refer to it as contribution. Their reward system is focused on how every person contributes to the organization—so it is not just individual goals or objectives, but how you contribute to the team and to the organization. In a case study written by Great Place to Work, they outlined the Gore contribution process like this:56
Performance assessment begins with all associates in a unit providing feedback and relative rankings for the contributions of their peers.
These relative rankings are the basis for compensation decisions.
In order to get rewarded, you have to deliver business results aligned with the organization’s values and core principles.
This is a big win for associates in that they participate in a peer-feedback and peer-review process, have a direct connection between what they do and how it impacts the business, and have a culture where how people are paid is aligned with values.
Consistent with the trend of peer feedback, crowdsourcing performance management using social tools provides a broad base of feedback. Globoforce introduced crowdsourcing input using social recognition for employee development.57, 58 Whether it is peer assessment or crowdsourcing feedback, there are two things to keep in mind:
Feedback should come from people who know the work. This is important because asking for feedback from people who don’t know or understand the work can lead to vague generalities and not offer specific enough information to be meaningful.
People need to understand how individual employees’ work contributes to the overall business. How did it drive success? What was their unique contribution? How did they help the team or customers? How did they deliver value?
Where can you start with performance-
Insight: Get a clear understanding of employee/manager needs
Impact: Have a clear focus on the business value
Issues and opportunities: See what can be improved in order to meet employee/manager needs, and what’s getting in the way
Innovate: Design a solution that delivers both employee/ manager and organization value
What are the benefits of performance-
Connected, collaborative, social, mobile
Many sources of feedback, contribution
Real relationship, coaching as a culture,
Organizations have been redesigning performance management for years. They have been trying to build goal-setting processes, employee development plans, self-directed learning, and feedback mechanisms. Sometimes, even with the best of intentions, these efforts fail. There is the energy of something new at the beginning; people try it for a while, then, before you know it, things have fallen back into their normal routine and everyone is back to whatever they were doing before.
They then ask, “Why is it then that these efforts are limited and often fail to meet the desired results?” It would be more appropriate to ask, “What did we put in place to ensure success?” Organizations that want to connect their values to performance need the glue to make that happen. You can’t just come out with a pronouncement one day to the organization, “Starting today we are going to live our values. Now go live our values.” How? With what tools?
In the course of doing research for this ebook, I talked to thought leaders, conducted and read research, and studied what successful organizations were doing, and how they were doing it. Then, I came across the Science of Story and the work that Adam Fridman and Hank Ostholthoff were doing on passion and purpose. In an effort to talk with 1,000 passionate voices, they shaped a story, a movement, and a way forward for every organization aspiring to be a
passionate place to work and connect individual development to organizational success and performance. In effect, their message is:
It is in “habits define” that they uncovered the missing puzzle piece for many organizations. Building culture, integrating feedback, working on your own development, and improving business performance—all of these things need to be connected and it takes effort and commitment. There has to be a way that commitment turns into action—where you put the living into “living your values” and delivering great performance. That translation process is through habits—the actions you commit to that deliver success. You can have habits around feedback, around your own learning, around facilitating the development of others, around business focus, and around commitment to results. You can have habits around personal goals and commitments as well. Habits happen every day, and they have developed the translation vehicle through professional habits to transform culture.
Imagine if, as a manager, you began your day with the following message, and you made a commitment to making that happen with your team? Over time this practice would change the team and create a more inclusive culture:
I know a lot about transformation, and it’s personal. All real transformation is, even in organizations. I’ve personally experienced transformation in my life, and it didn’t happen overnight. It took hard work and dedication—there was no magic fairy dust. I still have a lot of work to do, every day. What made a big difference was the habits I developed that helped me change over time. I set goals—and some were hard to stick with due to work and life. The magic was in the commitment—no matter what. It is the same for organizational life: If you want to build a great culture, a passionate place to work, a place where people want to join and make a commitment to doing their best work, the magic is in the commitment and the habits you develop every day. It is the only sustainable way to transform culture.
If you want to change how you engage your people around performance, you need a way to get there. What are you going to use as the glue to connect people, development, feedback, and performance? What are your habits going to be?
In the next chapter, we will explore the working human. In addition to our sharing trends and innovative ideas, you will hear from leading thinkers doing the research that is changing the way we live and work.