Moving Beyond Performance Management to Performance Enablement [Infographic]

Earlier this fall I reported on a study we had completed at Lighthouse Research focused on performance management practices that separated high-performing companies (revenue, retention, engagement) from their peers. The infographic below illustrates these points well and is a great set of takeaways. The part I’m most intrigued by? Companies that follow a specific set of practices are more likely to improve engagement and business results, a double shot of positive organizational impact. I’d love to hear your feedback–does this resonate with your own company? Have you seen similar benefits?

performance management infographic

How to Radically Change Your Performance Management Practice [Podcast]

autumn speharIn today’s episode of We’re Only Human, I talk with Autumn Spehar, HR Director at Stout Advisory, about how her company made a radical change in its approach to performance management. We also talk about how it’s working out one year later and the key lessons learned.

Check out the show below:

Show Notes

Performance management is one of the most hated HR systems in existence. Yet virtually every employer has a need to measure performance, set goals, and give feedback. So, what’s the right balance between a system that meets the needs of business leaders and one that meets the needs of the employees?

In today’s discussion with Autumn Spehar of Stout Advisory, Ben delves deep into this question by asking Autumn to describe her company’s transition from annual, paper-based performance management to a technology-enabled approach utilizing continuous feedback, real-time recognition, frequent check-ins, and more. This conversation is more than theory–it’s based on a year of practice in using the system, including the ups and downs that any company might face in this kind of transition.

Listeners to this episode will not only get to hear about Stout’s new outlook on performance, but they will be treated to some insightful commentary about the connections between culture, behavior change, and other elements that some of the “headlines” on performance management seem to miss. If you’re in charge of performance management at your company or you think your system could use a refresh, this is the episode for you!

Lessons on Creating Powerful Moments of Performance

I’m reading a new book, and it’s pretty amazing. The Power of Moments tells stories and gives examples of how to create amazing moments of value for employees, students, families, etc. Two of the principles from the book can be leveraged for employee reviews and I want to focus on them today.

Assurance + Expectations > Feedback

The first concept is called Assurance + Expectations. Researchers performed a study on students that received graded feedback on their work.

  • In the first group, students received a generic “these comments are feedback.”
  • In the second group, students received “I’m giving you this feedback because I have high expectations and know you can do better.”

After receiving the feedback the students had the opportunity to edit and resubmit their work. A much larger portion of group two resubmitted their work for review. But why?

The concept comes down to Assurance + Expectations. If we provide assurance and give a set of expectations, we can empower individuals to perform at a higher level, provide greater depth, and make the transaction much more of a positive experience. Those individuals in group one didn’t get any positive reinforcement, insight into expectations, etc.

Within the performance process, it’s not enough just to give someone a piece of feedback and move on, especially when it’s critical. We need to provide critical feedback in the context of assurance (you can do great work) and expectations (I expect you to do great work). That relatively minor change shifts the whole context of the conversation from punishing someone for messing up to helping them discover how they can improve.

Backward Integrated Design

The second concept that applies to the performance management process is backward integrated design. This basically means backing out the design process and starting with the outcomes you hope to achieve. For example, many would say the ideal outcome of performance appraisals would be to help employees perform better. But when we look at how they are structured (especially when done once or twice a year), that simply can’t be the case, because we spend our time measuring their old performance, rating it, telling them what they did right or wrong, etc.

Instead we need to think about what actually creates better performance:

  • Recognition
  • Coaching
  • Feedback

By incorporating these elements into the process we can actually improve our chances of hitting the overarching goal of improving employee performance. Our research shows that high-performing companies are much more likely than low performers to use these and other elements in the performance process. You can check out the rest of our findings on the Lighthouse Research website if you’re interested.

Performance Management, Culture, and Business Results [New Research]

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!

Salary Negotiation: It’s Not a Zero Sum Game

In every company, there comes a time when someone makes an offer to a candidate to come and work for them. What is interesting is the wide variety of advice in the marketplace that advises candidates on how to handle that critical negotiation.

Years ago I got my start in blogging by sharing career advice with job seekers looking for an edge in the hiring process. My peers constantly told people that for the strongest negotiating position, they should hold out as long as possible. In other words, it followed the old adage “the first one to speak in the negotiation loses.”

But that’s not necessarily true.

salary negotiationWhen I was recruiting, I wanted to find out from the candidate early on, whether through a job application question or through an informal conversation, what sort of salary range they were looking for. If it wasn’t offered, I would share the range of the opening early in the process. Was I showing my cards? Yes. But I was also attempting to conserve a valuable resource: time. Continue reading

Making the HR Technology Leap

I was talking with a friend last week about technology–specifically the kind we use in the HR, payroll, and recruiting space. His organization is using an awful tool that costs quite a bit of money. It’s not user friendly. It doesn’t make data easily accessible. And it’s become a running joke that any basic business need will require yet another $20k+ module just to meet that single need. It sounds like they are in the perfect place to be considering other technology, right?

And yet he and I both know that they are not going to make a change any time soon. Despite the availability of various “HR modules” within the system, he uses a point solution to handle recruiting needs and an Excel spreadsheet manage employee data. At some point he’s going to have to move to something else, but he and his organization are just part-way into the HR technology maturity curve. Here’s a look at the curve (in my opinion) and how technology is normally put into place.

The first steps

Diving into HR technology doesn't have to be scary

Diving into HR technology doesn’t have to be scary

One of the first steps most companies take in terms of HR technology typically comes with recruiting. Adding an applicant tracking system to eliminate manual job posting, tracking of candidates, and collaboration with the hiring team. Using a piece of recruiting software (like Recruiterbox, for example), can drastically change HR’s role in the hiring process from administrative to strategic.

I can still remember the before and after look at my recruiting practices when it came to technology implementation. When it was all manual, I was just trying to keep the mass of information organized enough to pick anyone competent and qualified. When we transitioned to using an applicant tracking system, I was able to then spend more time coaching hiring managers, screening candidates more thoroughly, and onboarding new employees.

Another common first step is in payroll. Again, it can be an opportunity to change from very administrative (did we get that person’s dependents right?) to a more strategic focus on compensation, variable pay, and other important elements that fall through the cracks when you’re spending several hours a week reviewing pay stubs.

Next up: performance/learning

Depending on the organization, as they grow there is usually a focus on automating performance management, learning, or both. For instance, when I worked for an organization with heavy regulations around training and staff certifications, our primary system (even before having a good HRIS) was a learning management system (LMS). In another organization, I campaigned regularly for a performance management solution to help alleviate the burden of continuously growing performance management paperwork. This is often seen as less strategic and important than recruiting or payroll, which is why it’s not at the top of the list in terms of implementation priority.

One area I’ve seen grow of late is the set of companies offering performance feedback/employee engagement solutions based on simple surveys and quick “pulse” feedback gathering. These are very easy to implement and don’t require all the trouble of the typical performance management solution.

The later stages

The deeper into this maturity process the company goes, the more likely it will select a suite to consolidate vendors and ensure a uniform data set across the various platforms (learning, performance, compensation, etc.)

One area I’ve been very interested in of late involves the difference between companies that pursue point solutions to solve various problems and those that snag the suite to combine each area. A few questions that have bounced around in my mind:

  • Which type of organization has better performance?
  • What factors play into that overall technology selection choice?
  • Are organizations using data better if the systems are integrated than if not?
  • What about the specific benefits highly targeted point solutions offer that the big suites do not?

What are your thoughts? Where are you in this HR technology maturity curve?