Category Archives: Performance Management

Developing a High Performance Culture

Over the years we have consistently found that the highest achieving organizations are those that have successfully planned and developed high performance cultures.

The first step of this process involves identifying the underlying assumptions, beliefs and values that cause people to behave the way they do (the practices), and then identifying a clear link between organizational goals and individual/team/department performance.

People at all levels must also develop a clear sense of purpose, and management at all levels must devote the necessary time and attention to a proactive and consistent performance management regimen in which they promote and recognize practices that are aligned with organizational values and objectives.

The infographic below depicts one approach to this type of performance management system.

performance management system

3 Managerial Best Practices for Engaging Today’s Teams

In our previous post we shared reasons why leaders at all levels (as opposed to “just CEO’s or Senior Management”) must step-up to engage their team members during this time of need.

While that post identified important areas of focus based on employee surveys and polls, this post identifies three key managerial best practices that will help leaders improve the effectiveness of their efforts to help and support team members:

  1. Communication is critically important. A recent Harvard Business Review article states, “Communication is often the basis of any healthy relationship, including the one between an employee and his or her manager… consistent communication – whether it occurs in person, over the phone, or electronically – is connected to higher engagement.”

    However, Gallup research also indicated that “mere transactions between managers and employees are not enough to maximize engagement. Employees value communication from their manager not just about their roles and responsibilities but also about what happens in their lives outside of work.”

    This perspective aligns well with the data shared in our previous post
  2. Effective performance management is also important, but it must go beyond the “annual review.” Given the significant and rapid changes we are all experiencing in day-to-day protocols, many people do not clearly understand their goals or what is expected of them. They may feel conflicted about their duties and disconnected from the bigger picture.

    Consequently, managers must more frequently discuss and possibly redefine mission, priorities, achievement and expectations.
  3. Focus on people’s strengths. Given the above-referenced changes in protocols, this might involve some reassigning of responsibilities – especially for those who are struggling to maintain productivity while working remotely.

    Gallup researchers have discovered that building employees’ strengths is a far more effective approach than a fixation on weaknesses. In the current study, a vast majority (67%) of employees who strongly agree that their manager focuses on their strengths or positive characteristics are engaged, compared with just 31% of the employees who indicate strongly that their manager focuses on their weaknesses.

Your Training ROI & How to Optimize It

We are often asked about how organizations can optimize the value of their Learning & Development or training programs, with many leaders looking for ways to increase training-related behavioral change as well as their return on investment.

A recent VitalSmarts webinar addressed this subject quite nicely, and shared several perspectives that are well-aligned with ours.

Here’s a brief summary:

First and foremost, the webinar’s over-arching premise is that Learning & Development must become a strategic partner of the C-suite in order to bring about improvement and real behavioral change. In addition, there must also be a C-level commitment to consistent L&D programming. As the presenters said several times, “Training, or L&D, must be treated as a process rather than an event.”

These concepts align nicely with our perspective about the importance of senior level management’s buy-in, sponsorship, and involvement in all improvement initiatives. And, in case some convincing is in order, the article went on to share some thought-provoking statistics.

For example, only 7% of Learning & Development leaders measure the bottom-line effectiveness of their training programs. Possibly more troubling, only about 10% of all Learning & Development executives have met with the C-suite; and only a few align their training plans with the organization’s strategic plan.

In addition, only 35% of the US workforce receives any training at all! And even then, the average is three days of training per year.

Finally, without effective reinforcement and ongoing development, only 14%-15% of the information shared in training “sessions” is applied in the workplace. Instead, people most often do nothing differently or make a few changes for a while and then revert back to whatever they were doing in the past. Clearly this enormous “gap” represents significant waste, which was referred to as “learning scrap.”

3 Best Practices

For those who are determined to improve the value and effectiveness of their Learning & Development programs, (i.e., increase learning transfer and reduce learning scrap), three best practices were suggested:

Define the role and purpose of Learning & Development within the organization. To begin this process, the first couple of questions might be, “What would translate to a breakout year for L&D?” “This training will be a success when… (complete the sentence)”

Build the Learning & Development platform on defined and agreed-to business outcomes. It was pointed-out that most L&D managers plan their programming on what they “hope people will learn.” But the real focus should instead be on “what people will do differently as a result.”

Recognize that L&D is a process, not an event. The process must include ongoing measurement and support to ensure the business outcomes are achieved. This means coaching, reinforcement, and accountability on multiple levels:

  • C-level must be committed and allocate resources for appropriate levels of learning as well as for reinforcement and ability coaching
  • L&D leaders must align with business outcomes, and move the “finish line” of their training to include an achievement phase
  • Front line managers must provide reinforcement and support
  • People at all levels are accountable for applying what they’ve learned and related behavioral change

Why Systematic Performance Management?

In a previous post it was noted that a well-defined performance management process is a pre-requisite to achieving a high-performing culture.

But what does it take to develop and maintain such a process? As it turns out, it may take more than many of us would like to think.

“Performance management systems, which typically include performance appraisal and employee development, are the Achilles’ heel of human resources management,” said Elaine Pulakos, Executive Vice President and Director of the Washington, D.C. office of Personnel Decisions Research Institute (PDRI) in a Society of Human Resource Management (SHRM) white paper.

Pulakos went on to cite a survey by Watson Wyatt, which showed that only 30% of workers agree that their company’s performance management system helps improve performance, and less than 40 percent of employees said their systems established clear performance goals, generated honest feedback or used technology to streamline the process.

So, how might we ensure that our approach will not succumb to these pitfalls?

There are many different approaches and ways to answer this question, but today we will focus on only one: systematize it.

Among the failures observed in the above-referenced survey and others like it, there is a common thread that can quickly bring-about the demise of a performance management effort, which is taking an ad-hoc approach. Instead, the first step is to create and document a process, which might include the following basic components as outlined in the SHRM white paper:

Performance Management – a Never-Ending Process

We’ll take a closer look at the advantages of this systematic approach in our next post.

Culture & Performance Management

Our previous post focused on building a high performing culture, and it noted that doing so is nearly impossible without significant contributions of time and energy from senior leaders. It was noted that a well-defined performance management process is a pre-requisite as well.

Performance Management is all about how leaders orient their organizations around working on the right things in the right way.

When we asked our Partners In Improvement to define Performance Management and to discuss how it impacts an organization’s culture, we heard a range of perspectives. Generally, everyone agreed that performance management a key driver of organizational culture because a well-defined and executed performance management process promotes effective prioritization, accountability, and engagement. However, definitions were more varied, and included:

  • the strategic orientation of the organization
  • process performance management
  • setting of goals and objectives
  • individual performance appraisals
  • daily direction and feedback to reinforce desired behaviors
  • providing tools and coaching to help people be successful
  • rewards and recognition

From the strategic perspective, performance management begins with the identification of what’s vital to the organization, the Partners said. If these priorities are not clear and it is not clear what role everyone plays in the priorities, the rest is unlikely to mean much.

Several of the Partners pointed out that performance management refers to both process management as well as people management. While there are clearly a wide range of views about how to manage the performance of both people and processes, several excellent best practices were generated during our discussions:

For example, everyone agreed that frequent observation and feedback is more helpful to people than formal annual reviews. Frequent communication about what an organization needs and wants greatly increases the odds that the organization will get what they need and want.

In addition, most reported that group rewards encourage teamwork, while individual rewards encourage an individual to optimize his or her own goals even if it may sub-optimize the organization as a whole.

Everyone agreed that tying money directly to performance appraisals can be a two-edged sword – raising stress and reducing the intrinsic rewards and personal satisfaction from doing a good job for the team.

Everyone also agreed it was important to avoid what was described as “managing through rear view mirror.” In other words, avoid “Monday morning quarterbacking.” Instead, leaders should be involved in a systematic performance management process that is ongoing and timely so that outcomes can be influenced rather than discussed after-the-fact.

Here is a simple infographic that depicts one approach:

Engaging Your Workforce: A Front-line Manager’s Recognition Tip Sheet

A recent article published by Engagement Strategies Media, outlined five specific best practices for front-line managers to help them more systematically recognize and engage their workforce.

As you may know, the recognition field has seen a significant shift over the past several years, going from traditional length-of-service awards to programs that focus on supporting critical organizational goals — i.e., quality service to internal or external customers, participation in volunteer initiatives, a willingness to go the extra mile, etc. In most cases, the success of these efforts depends upon the managers at the front lines.

It’s also true that many employees become disengaged or leave their jobs because of an immediate supervisor, not because of the company or pay. Here’s a tip sheet for front-line managers that lists five ways in which they can implement a systematic and effective approach to recognizing team members:

1.) Start With the Basics of the Work
The first step for front-line managers is to show employees that they and their work are valued and appreciated. Initially this might involve giving them a sense of ownership, and making the practice of expressing simple appreciation a standard part of day-to-day management. To ensure consistency, the prudent manager schedules regular time with each employee to make sure they understand their job goals and how their work makes a difference. It’s also important to make recognition meaningful. Don’t go overboard by praising everyday basics such as showing up for work on time or keeping a clean desk.

2.) Continually Reinforce Goals and Values
It’s equally as important to make sure team members understand the organization’s goals and values, which might include a commitment to superior customer service, continuous improvement, innovation, or inclusiveness. Don’t make employees guess—every employee should know the organization’s goals, organizational values and the role they individually can play. Take advantage of team meetings or employee newsletters to regularly reinforce the key messages and goals, and what the values mean in terms of actions and behaviors. This might include simple things such as “how we treat one another,” as well as things more directly associated with how the work gets done.

3.) Recognize employees for both their individual and group contributions. Not everyone likes public praise, so managers must get to know employees and tailor their recognition style based on each person’s preferences. When recognizing a group, make sure to acknowledge each person’s contribution. Be inclusive—recognize everyone who does something meaningful that supports the company’s values or goals through their actions. However, if you publicly recognize someone who doesn’t deserve it, you’ll devalue the whole process.

4.) Planned and Spontaneous Recognition. Formal recognition events can take place monthly, yearly, or almost any time. They’re great ways to celebrate achievements, but try to recognize employees whenever it is merited. In general, praise employees as soon as possible after an accomplishment.

5.) Leverage Internal Communications. If your organization has a print or online newsletter or social recognition platform, an article or post highlighting an employee’s achievement is a very effective way to show appreciation in a way that helps communicate and reinforce values and goals to everyone. How you recognize individuals can be inspiring to their colleagues as well.

Keep in mind that the personal touch, sincerely delivered whenever warranted, is key to keeping your team members feeling valued, motivated and excited about doing the best they can at their jobs each and every day. Studies show that front-line managers can make or break the employee experience.

Read the full article…

Annual Performance Reviews?

Managing Through the Rear-View Mirror?

Annual or semi-annual performance appraisals continue to be a standard component of many performance management programs, despite the fact that they are deemed a source of angst and dread by both managers and team members.

Consider that an annual or six-month review is very much like managing through a rear-view mirror, as the practice involves looking back at a person’s performance with the intent of identifying deficiencies and, hopefully, areas of accomplishment. While this may be a standard approach, the practice does little to impact day-to-day activities that, if modified on a timelier basis, could have positively impacted outcomes.

Along similar lines, Dr. Deming was among the early detractors of the annual appraisal, saying, “Individual performance appraisals nourish short-term performance, annihilate long-term planning, build fear, demolish team-work, and nourish rivalry and politics. Everyone propels himself, or tries to, for his own good… and the organization is the loser.”

And all these years later, Deming’s comments ring true. For example, when a bank implemented formal performance appraisals that evaluated Loan Officers on the dollar value of loans approved, and measured the Credit Department on ‘the quality of the loan portfolio’ (i.e. no defaults), it reduced profits and created dysfunction and animosity. The Credit Department was careful to take no risks, while the Loan Officers focused on quantity, hoping that something, at least would be approved. The bank as a whole suffered.

In addition, many people report that reviews tend to be late and are often “put off,” thus sending a poor message to team members (i.e., “you’re not as important as other things…”). They are also considered among the more onerous of management responsibilities, as it can be difficult to access relevant performance-related data that dates back a full year.

One way to improve the effectiveness of performance reviews is to increase the frequency – possibly from annual to quarterly or bi-monthly. A number of managers and HR professionals we have spoken with said the shortened time-table tends to improve feedback discussions and results in more meaningful and less stressful exchanges. In addition, the enhanced time-line reduces the ‘rear-view mirror’ effect described above, and separates performance evaluations from pay raises.

Certainly studying work and work processes on a more frequent basis is more closely aligned with a Continuous Improvement philosophy.

Performance Management Best Practices

Bill Conway would say that there are two things that matter: working on the right things and working on them the right way. Performance Management is all about how we as leaders orient our organizations around those two things.

When we asked our Partners In Improvement to define Performance Management, we heard a range of perspectives:

  • the strategic orientation of the organization
  • process performance management
  • setting of goals and objectives
  • individual performance appraisals
  • daily direction and feedback to reinforce desired behaviors
  • providing tools and coaching to help people be successful
  • rewards and recognition

From the strategic perspective, performance management begins with the identification of what’s vital to the organization. If these priorities are not clear and it is not clear what role everyone plays in the priorities, the rest is unlikely to mean much.

Several of the Partners pointed out that performance management refers not just to people management, but to process management, and plant management (which one of the Partners called the “3 Ps – People, Plant, and Process”).

One of the Partners explained that she always starts by measuring the performance of the process. To improve the process, based on the root cause analysis she would work to improve the people performance, tools, materials, methods, the environment, or whatever factor was driving the performance of a process.

While there are clearly a wide range of views about how to manage performance, several excellent points or best practices generated quite a bit of support during our discussions:

  • Performance Management must be about much more than individual performance measurement. As Deming said, over 90% of problems are caused by the system not the person. To manage performance, we must manage the system by which people, plant, process interact to produce results.
  • Frequent observation and feedback is more helpful to people than formal annual reviews.
  • Frequent communication about what an organization needs and wants greatly increases the odds that the organization will get what they need and want.
  • Group rewards encourage teamwork, while individual rewards encourage an individual to optimize his or her own goals even if it may sub-optimize the organization as a whole.
  • Tying money directly to performance appraisal can be a two-edged sword – raising stress and reducing the intrinsic rewards and personal satisfaction from doing a good job for the team.
  • Avoid performance management in the rear view mirror – in other words, avoid “Monday morning quarterbacking.”
  • Make more of the goal setting process which produces targets against which we measure performance and take corrective action

 

Performance Management Contrasts

We’ve had some fascinating conversations about performance management over the years, and have found quite a range of formal and not-so-formal approaches, along with variations in defining the process.

But while different organizations may employ different methods, there are a few areas on which most everyone we’ve spoken with enthusiastically agrees:

  • Positive versus punitive performance management works best.
  • Recognition is an important element of managing the performance of individuals.
  • Management must manage the performance of both individuals and processes.
  • Regularly scheduled performance reviews or evaluations of individuals are key and should be conducted more frequently than once each year.
  • Performance evaluations need not be coupled with merit-based or time-based pay raises and, in most cases, are more effective if not coupled with pay raises.

How does your organization define and execute performance management?

 

Rewards & Recognition Best Practices

Recent posts have focused on “rewards and recognition,” a crucial component of enterprise engagement.

We shared a range of perspectives based on discussions with our Partners in Improvement groups, who agreed that these programs are typically designed to achieve one of three objectives:

  • increased commitment
  • increased desired behavior or motivation
  • increased measurable results

Based on their collective experience the Partners identified the following eight criteria or best practices for an effective rewards and recognition program:

  1. Keep it simple: The most cost effective method of all seemed to be the simple thank you note. The notes, if done well, are widely appreciated and cost nothing more than the time and attention to set up a system of information when an individual or team deserved a thank you.
  2. Be very careful about extrinsic rewards: these can cause more trouble than benefits. Extrinsic rewards require very clear metrics, auditing, and careful, even elaborate design to ensure a focus on the rewarded metrics will not lead to deterioration of other facets of the organization. Obviously, this makes it hard to ‘keep it simple.’
  3. Be specific: it is much more effective to recognize a team or a person for a specific result or accomplishment than for generally doing a good job.
  4. Be timely: the closer in time the reward or recognition is to the accomplishment being recognized, the more impactful it will be.
  5. Be consistent: Be sure that you respond to comparable accomplishments in comparable ways.
  6. Be authentic: Sincerity in words of appreciation and praise are essential to an effective system of reward and recognition.
  7. Communicate widely: Publicity helps extend the celebration and communicates widely what is valued by the organization.
  8. Use team rewards to encourage better organization-wide results.