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!

The Real Reason People Hate HR

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.

The Crowdsourced Performance Review

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)