Tag Archives: performance management

Motivating people to improve performance

inspiration

We have consistently observed that most high-achieving organizations are able to develop and sustain high performance cultures in which team members are inspired, engaged and highly motivated.

During a discussion with Human Resource, Quality, and Continuous Improvement leaders, various approaches to the motivational component of performance management were shared.

Individual v. Group
Some organizations focused on personal quantitative measurements to motivate individuals and to encourage and inspire them to achieve important goals. Tying these individual goals to the organization’s KPIs was cited as an effective way to align behaviors with goals and make sure everyone is aware of exactly what they are expected to do.

However, others said that group rewards and recognition were more effective than focusing on individual metrics. For example, one participant described how teamwork deteriorated to the detriment of the organization as a whole after his organization switched to individual metrics and rewards instead of rewarding everyone based on achievement of the company’s key strategic metrics.

Show me the money?
We also discussed experience with financial rewards as opposed to intrinsic rewards, such as recognition, and financial rewards did not necessarily produce the best results.

One participant explicitly pays people for participating on improvement teams in some of their facilities, while one of their Midwestern plants is prohibited from paying for participation. The Midwestern plant relies on intangible rewards such as recognition and “thank you notes.” Surprising to many, the Midwestern plant had a much higher rate of participation than the others, seeming to demonstrate that intangible or ‘intrinsic’ rewards can be more effective than monetary rewards.

Another organization found recognition, sometimes coupled with small gift cards, was an effective method for their organization.

Two Critical Factors
Everyone agreed that two keys to effective use of recognition as a motivational method are timeliness and making the recognition public.

Several examples involved peer-recognition programs, in which people were empowered to recognize one another by giving-out stars or some similar token when observing a co-worker exhibiting certain behaviors. When someone receives a certain number of stars, they get a gift card and the ‘star of the month’ gets a party, recognition, and a preferred parking space. It was noted that guidelines for the awarding of stars or tokens were set in advance.

Another perspective relative to timeliness involved making motivational and performance management activities an “everyday job,” and basing strategies on more than just past data. Over-reliance on past data when crafting improvement or motivational plans was referenced as working through the “rear-view-mirror.” A better approach not only enables managers to identify opportunities for team improvement based on analyzing past activities and results, but to also identify preemptive action steps and strategies that can impact outcomes and future results.

Conclusions & Best Practices

  1. Performance Management and motivation 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.
  2. Frequent observation and feedback is more helpful to people than formal annual reviews. Motivation and engagement levels were consistently rated as “much higher” when team members received frequent, consistent feedback on their work, and also when they felt they had input to improvement plans.
  3. Frequent communication about what an organization needs and wants greatly increases the odds that the organization will get what they need and want.
  4. 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.
  5. 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.
  6. Intrinsic rewards tend to increase motivation over time as opposed to financial rewards. Recognition is among the most effective. The keys to effective use of recognition as a motivational method are timeliness and making the recognition public.
  7. Avoid performance management in the “rear-view mirror.”

Performance & Accountability

accountability

Virtually every organization we’ve encountered struggles with developing teams. Many teams are dysfunctional; they take too long to accomplish tasks, the work is filled with errors and waste, the costs are excessive and turf wars abound. Others struggle to stay-the-course; as a result, their efforts to make improvements are ineffective and then slowly peter out.

The necessary ingredients for developing high performing teams include:

  • Strong leadership and sponsorship
  • Alignment around a common purpose
  • Task and project management
  • Communication and meeting management
  • Measurable performance targets
  • Identifying the right process/game plan to achieve results
  • Holding people mutually accountable for results

It is often the final bullet that brings about failure, as holding people accountable can be a process within itself!

In a Harvard Business Review article, it was suggested that achieving a “culture of accountability” requires clarity in five key areas:

  1. Clear expectations. The first step is to be crystal clear about what you expect. This means being clear about the outcome you’re looking for, how you’ll measure success, and how people should go about achieving the objective. It doesn’t all have to come from you. In fact, the more skilled your people are, the more ideas and strategies should be coming from them. Have a genuinely two-way conversation, and before it’s over, ask the other person to summarize the important pieces — the outcome they’re going for, how they are going to achieve it, and how they’ll know whether they’re successful — to make sure you’re ending up on the same page. Writing out a summary is a good idea but doesn’t replace saying it out loud.
  2. Clear capability. What skills does the person need to meet the expectations? What resources will they need? If the person does not have what’s necessary, can they acquire what’s missing? If so, what’s the plan? If not, you’ll need to delegate to someone else. Otherwise you’re setting them up for failure.
  3. Clear measurement. Nothing frustrates leaders more than being surprised by failure. Sometimes this surprise is because the person who should be delivering is afraid to ask for help. Sometimes it comes from premature optimism on both sides. Either way, it’s completely avoidable. During the expectations conversation, you should agree on weekly milestones with clear, measurable, objective targets. If any of these targets slip, jump on it immediately. Brainstorm a solution, identify a fix, redesign the schedule, or respond in some other way that gets the person back on track.
  4. Clear feedback. Honest, open, ongoing feedback is critical. People should know where they stand. If you have clear expectations, capability, and measurement, the feedback can be fact-based and easy to deliver. Is the person delivering on her commitments? Is she working well with the other stakeholders? If she needs to increase her capability, is she on track? The feedback can also go both ways — is there something you can be doing to be more helpful? Give feedback weekly, and remember it’s more important to be helpful than nice.
  5. Clear consequences. If you’ve been clear in all of the above ways, you can be reasonably sure that you did what’s necessary to support their performance. At this point, you have three choices: repeat, reward, or release. Repeat the steps above if you feel that there is still a lack of clarity in the system. If the person succeeded, you should reward them appropriately (acknowledgement, promotion, etc.). If they have not proven accountable and you are reasonably certain that you followed the steps above, then they are not a good fit for the role, and you should release them from it.

Feedback Formula

performance management

As noted in our previous post, an effective performance management regimen is a necessity for any organization hoping to build and sustain a high-performance culture of continuous improvement.

That post also noted that an effective process for giving feedback is a critically-important part of performance management. However, the post went on to share the results of research by Gallup indicating that only 26% of U.S. workers surveyed strongly agreed that the feedback they receive as part of their organizations’ performance management effort actually helps them to improve their work or behavior.

Fortunately, a simple four-step formula for effectively giving feedback or for sharing difficult messages in a “brain-friendly” way (so the receiver recognizes important feedback is about to be shared) was recently shared during a TED talk by Cognitive Psychologist LeeAnn Renniger.

These steps are:

Micro yes. Begin the interaction by asking a short, but important, closed-ended question to gain initial acceptance or buy-in and to give the other person a sense of autonomy (they can, after all, answer either yes or no). The objective is to get them to say, “yes.”

For example, you might ask, “Do you have five minutes to talk about yesterday’s meeting?”

Data point. To help others avoid confusion and to make sure your message is clear, make a concise and specific statement about the action or behavior you want to address. By avoiding ambiguous or “blur” words, you will enable the other person to more clearly understand the issue at hand.

For example, “During yesterday’s meeting you agreed to send a follow-up email with instructions by 11am this morning. It’s now after 3pm and I still don’t have it.”

The data point need not only refer to a negative situation. For example, “During yesterday’s meeting you shared a great example of how the order processing works best!”

Impact statement. Explain how the action or behavior impacted you.

For example, “The story really made it easier for me to understand how the process should work, and will make it easier for me to do my part going forward.”

Question. Wrap-up with another question (open-ended this time) that is geared toward confirming understanding and gaining commitment.

For example, “How do you see it?” Or “What do you think?”

While simple in structure, Renniger explained this approach is a scientifically proven method for gaining the attention of others and for giving feedback in a meaningful way.

Possibly most important, having a set of guidelines can make it easier for the feedback giver to approach potentially awkward interactions with greater levels of confidence, and to execute more effectively.

Giving Effective Feedback

twenty six percent

A recent post highlighted the fact that a proactive and consistent performance management regimen is a key pre-requisite to building and sustaining a high-performance culture of continuous improvement.

However, a recent Gallup study found that only 26% of the U.S. workforce strongly agreed that the feedback they get from managers or supervisors as part of their performance management effort actually helps them to improve their work! Clearly, and as most people agree, giving or gaining feedback can be difficult.

Further research indicates there are two primary reasons for the difficulty, which can be associated with both giving feedback or having “difficult conversations” with team members:

  1. The feedback giver is too indirect, so others don’t recognize the importance or significance of what is being shared. In fact, in many cases the feedback shared has no impact at all and is quickly dismissed or forgotten, because the brain doesn’t recognize the input as worthwhile!
  2. The feedback giver is too direct, thus causing others to become defensive; rather than listening to or giving consideration to the feedback they are distracted by what’s often called the rebuttal tendency, which means that instead of listening they are focused on how they will rebut whatever is being said. Even worse, when others react defensively it can cause the feedback giver (or seeker) to become defensive as well! Symptoms include loss of focus, sudden reliance on filler words (i.e., ah, uhm, etc.), and making potentially antagonistic remarks.

    A similar reaction to overly direct feedback is an “amygdala hijack.” It happens when a situation causes your amygdala (the section of our brains that reacts to emotional stimuli) to hijack control of your response to stress by disabling portions of the frontal lobes.

Fortunately, there is a simple formula for effectively giving feedback or for sharing difficult messages in a “brain-friendly” way, which will be the subject of our next post.

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

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:

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?