This summer at Lighthouse we’ve been working our way through a number of research studies, but to be honest one of the ones I’ve been incredibly pumped about is focused on performance management. It’s probably because I get a sense of the discontent around this practice regardless of where I go and who I speak with. It’s incredibly hated at so many companies by HR, management, and the employees.

But there are also companies that are using it as a kind of secret weapon. In the research (the full report will be published in September) I am seeing some very interesting points on how companies plan to approach the practice of performance management, and it’s encouraging me to focus on it not just as managing or reviewing past performance, but enabling great future performance.

Top 10 Research Highlights

  1. We keep hearing it in the news–performance management is shifting/changing/dying. It’s certainly not staying the same. Approximately 60% of employers have made changes (including both minor adjustments and major shifts) to their performance process in the last 24 months. Another 25% are planning to in the near future.
  2. Despite the common discussion, annual goals still rank as the number one way employers manage performance. This is followed by recognition, coaching, and leveraging strengths.
  3. While performance feels like a drag for many employees (anecdotally :-)), the number one reason employers still practice it is to improve individual performance for workers.
  4. Which seems kind of said, because just 4% of employers say that their approach is highly effective and enables greater employee performance.
  5. Nearly one in five companies say that their performance management technology is clunky and difficult to use, which hinders progress in performance management, measurement, and improvement.
  6. At the same time, two-thirds of companies say that their approach improves engagement levels for their workforce. This is very much split by the kind of culture a company has (more on this below).
  7. High-performing companies are 58% less likely to say their approach to performance management is ineffective.
  8. High-performing companies are 20% more likely to say their performance management philosophy improves engagement rather than diminishing it.
  9. Astonishingly, companies with a competitive or controlling culture were more than three times as likely to say their approach to performance management failed to deliver the results and may actually impede employee performance and engagement.
  10. The performance practice spectrum. We’re analyzing the data through the lens of performance management activities on a spectrum. On one end are the old-fashioned, unpleasant activities like forced ranking and annual reviews. On the other end are more positive, engaging practices such as development coaching, peer feedback, and more.

    What we see in the preliminary results is that companies with a more collaborative culture are more likely to practice on the positive end of the spectrum while firms with more controlling cultures are more likely to fall on the negative end. More to come on this as we explore the data!

These highlights, while intriguing, are fairly high level. Look for additional insights in our upcoming white paper and webinar (to be announced) that focus more deeply on culture, what high-performing companies do differently, and other key insights from the research!

First, read this from the Ask a Manager blog:

HR won’t let us hold people accountable for performance

I just read your column about accountability and got aggravated because one of my long-standing frustrations as a manager at the large, government affiliated nonprofit where I work has been a lack of commitment to accountability. In my department, I try and, I think, mostly succeed at following your advice about talking explicitly about expectations, giving feedback, etc. – but then I come up against a lack of ability to ensure that actions have consequences – good or bad – at the institutional level.

For example, every employee is evaluated using the same performance appraisal template, which asks questions like whether the person is “courteous,” then spits out a score. If you have a score of at least 60 out of 100, you keep truckin’ along. The problem is that everyone on my staff is responsible for making 25 teapots a year. If someone shows up sober most of the time and doesn’t swear at anyone, but they only make 21 teapots, my hands are tied. On the other end of the spectrum, everyone gets the same salary increase, so those people making 42 teapots don’t see any tangible reward for going above and beyond.

So I was excited when we got new leadership this year that requested a plan for providing rewards and consequences for meeting or failing to meet the 25 teapot goal. I’m happy with the plan I developed and it was endorsed by our leadership. Then it went to HR and fell into a black hole. For months, I have been following up and told they were reviewing the plan and would get back to me. Finally, I ambushed the person I’ve been trying to talk to and she told me that the problem they’re hung up on is the consequences for failing to reach goals. Essentially, if someone fails to meet the 25 teapot goal (and this is after I have met with everyone regularly throughout the year about their progress and provided them with as much guidance and support as I’m able), I want to give them six months to improve their performance or be let go. HR asserts that the proposal “changes the terms of employment.” I don’ t understand this because the job is “teapot maker” and the job description explicitly states they’re responsible for making 25 teapots a year.

Instead of just tearing my hair out, though, I want to try to move this thing forward. I see a glimmer of opportunity because the HR director hasn’t outright told me it’s impossible. I’d rather the next step not be whining to the boss – in part because HR doesn’t seem very impressed that our top leadership wants this to happen. How do I proceed?

And now for the (quite appropriate) response:

Alison@Ask a Manager: Your HR department sucks, and your organization’s management sucks for allowing HR to suck (although it sounds like that might be changing with your new leadership). And really — “changes the terms of employment”? Have these HR people ever held a job outside this organization and seen that, in fact, you can indeed hold people to performance standards?

I’d talk to your new leadership directly if you can — the ones who want this to change. Tell them you’re having trouble getting HR to move forward with it, say you feel hamstrung in taking action on low performers, and ask for advice in getting HR to move on it. [Source]

————————————————————————————

Please don’t do this

HR has to stop doing, and allowing, things like this. It seems like it’s a weekly occurrence where someone writes to Alison (Alison Green is the superstar behind Ask a Manager) with a problem that is being caused by someone in human resources.

Look, I get it. HR is like any profession—we’re going to have people that just aren’t great at this stuff. But my sincere hope with this post is to help some of you guys see the AWFUL people practices that some organizations use and help you avoid them. For goodness sake, please steer clear of anything resembling this madness.

It’s no wonder that so many leaders, managers, and staff don’t respect HR when things like this are occurring.

Check out the short video below to learn more about The Crowdsourced Performance Review (here on Amazon). I’m looking forward to digging in and sharing more about the topics in the book!

Forty-five percent of human resources (HR) leaders don’t think annual performance reviews are an accurate appraisal for employees’ work. And 42 percent don’t think employees are rewarded fairly for their job performance. (source)

A few years back, I was in a local mentoring group through my SHRM chapter. I heard a story from one of the senior level HR professionals in the room that has forever stuck in my mind.

Recently they had won an award as the “best place to work” in our area, and the others in the room were asking for the secrets to their success.

Here’s a paraphrased version of the story.

Others began talking about how their ratio wouldn’t allow for an HR person to be embedded into the work groups of 50-80 employees, and the conversation quickly began to turn into a “Well, we have 150 employees and only 1 HR person” discussion. People were actually proud of the fact that they were extremely lean in HR staff.

Now, assuming there’s work to be done, I am a big fan of avoiding that overly-lean level of staffing in the HR function. Check this:

Sometimes you have to stop and wonder where common sense has gone. Companies are expecting more from their HR team than ever before, but according to data gathered by XpertHR, companies are increasing the number of employees relative to the number of HR professionals. This leads to a number of trickle-down effects, but the major one is forcing those human resources employees into a more administrative function.

No, it’s just an ever-increasing spiral in an attempt to decrease costs and increase efficiency. While you’ll never meet someone who’s for increasing costs and lowering efficiency, that does come with its own baggage. Recent information from Gallup puts employee disengagement higher than 25%.  Source: HR to employee ratio

Now that I’m off my soapbox, let’s look back at the original idea. Embed HR pros in the employee work groups. Don’t centralize the HR function in a remote location and expect to get the same results in the areas of recruiting, employee relations, etc. The more time I spend getting to know our people, their work, and our customer, the better I can serve them as an HR professional, pure and simple.

So, let’s take a peek at the “groundbreaking” concepts that you can use to make your HR team great.

The big three

  1. Let HR interact with the employees, managers, and leadership team. Yes, all of them.
  2. Have enough bandwidth in the HR team to do more than just cover administrative functions. Unless you like being a secretary.
  3. Be in the middle of things. There’s no substitute.

And I didn’t mention it outright before, but it needs to be said–don’t use the employee to HR ratio as a means of measuring effectiveness in your function. Some industries think 1 HR pro to 100 employees is perfect, but they also might have different challenges from following that formula with no regard for the people on the other side of the equation.

Want a breakthrough in company performance? Hire great people (HR included!) and let them work. It’s a pretty neat concept. 

Studies show that athletes who train in groups perform better than athletes who train by themselves. This is true not only as an athlete, but at work as well. I’m currently training for the 2012 Andrew Jackson Marathon in Tennessee. While I would have been able to get enough training under my belt to finish the race, there’s no way I would have trained as hard as I have without the great companions I have. When March 31st rolls around, I am going to be ready for my first marathon. How can we translate the success that I’ve seen as an athlete to the workplace for all of us?

A sales pitch for accountability partners

Dale Carnegie, one of the most successful businessmen in American history, attributed much of his success to what he called a “Mastermind Group.” He would routinely gather fifty successful people at his home and discuss issues and solutions to problems. Those interactions and relationships were continuously providing new ideas and alliances to help him in his leadership position. Benjamin Franklin did something similar with a group he called “Junta,” and there are stories of other leaders in history doing the same sort of thing.

Hint: You don’t have to be a millionaire steel magnate to pull this off or see the benefits. Having just two or three people you can rely on as a sounding board for ideas can help you become more successful. If “mastermind” sounds a little hokey, feel free to call them your “personal board of directors” or “peer reviewers” or something else more innocuous.

When I speak I usually mention this hard-hitting quote by Jim Rohn: You are the average of the five people you spend the most time with.

Want to be great? Spend time with great people.

Pick wisely

Finding someone to hold you accountable probably won’t be very hard. It’s finding someone with the judgement and ability to add just the right amount of pressure to keep you on your toes. This is true for mentoring relationships as well. Too laid back? The protege won’t get anything out of the relationship. Too tough? The protege will start to resent the forceful relationship.

Ask questions. Dig into motivations. Find out what short and long term plans are and how those intersect or parallel with your own. If it looks like a fit, move on to the next step below.

Pick a priority

Let’s say you find someone willing to work with you. They don’t have to be a mirror image of your own dreams and aspirations. They can have one specific piece that aligns with your own goals. For instance, they may want to return to school for their graduate degree, or maybe they want to pass the PHR or SPHR exam. Whatever the case, you are free to work with them through the specific “project” and then find someone else for the next stage of your career.

With a little work, you can find someone to team with for higher performance. And you’ll be following in the footsteps of some of the most successful people in our history. Pretty neat, eh? I have correlated running to work performance before in a post about keeping a “running” log of your performance. If you enjoyed this post, you might enjoy that one as well.

Anyone thinking of a way to harness this sort of relationship? I’d love to hear about it!

I saw a great post by my good friend Krista Francis recently on honeymoons at work, and it came just as I was crossing my first “work anniversary” at my current employer. If you haven’t read it yet, it will cause you to stop and think when you realize how important the first interactions new hires have with your company (hint: the “honeymoon” stage should last more than one hour!).

I rarely celebrate or dwell on anniversaries at work. I’m one of those people who will work at a place until it’s no longer interesting or challenging and then move on to another employer, so I measure my work in experiences and relationships, not years. Some people care about how many years they’ve been with an employer, but there are plenty who do not.

On a related note, I have never been a fan of seniority-based awards. However, when I was listening to Dave Ramsey the other day I heard him say something interesting. I don’t remember the exact quote, but paraphrasing: We don’t believe in paying people according to how many years they’ve been here. But I realized recently that we are very tough on people to produce results. If you aren’t producing results, you go work somewhere else. If that’s the case across the board, then we really do pay people somewhat according to their seniority level. If you’re still working here you must be doing something right. 

That one idea twisted my head around in a circle. While I still think celebrating years of service just for the sake of it is fairly useless, I do like the idea of recognizing that people who are still engaged in their work and producing solid results after a long term track record has been established. Of course, many companies hold onto poor performers for a number of reasons, but for those with a strong performance appraisal system, it’s an interesting way to look at longevity in a position.

I’ve been with my company for over a year now. People still come up and ask me, “Do you still like your job?”

I must still be in the honeymoon phase, because my response never deviates: I love it.

Ever had a “honeymoon” at work turn sour? Or maybe you still feel like you’re in that stage despite a long tenure? I’d love to hear about it!