Category Archives: Performance Management

Developing People, Performance Management

Managers Should Focus on 5 Key Areas of Clarity

clarity

In a past post we shared insight into the importance of performance management and the impact front line managers have on workforce retention as well as people’s productivity and engagement levels.

In that post, one of the best practices we shared was for managers to set clear expectations. It was also noted that, according to data published by SHRM, only about half of all US employees say they know what is expected from them at work.

Taking this concept a few steps further, there are five key areas in which the most effective managers provide clarity as part of their performance management process:

  1. Clear expectations
  2. Clear capability
  3. Clear measurement
  4. Clear feedback
  5. Clear consequences
motivation, Performance Management

How Do You Motivate People to Improve Their Performance?

motivation

Concluding our series on performance management, today’s focus shares input from our Partners in Improvement on how to motivate people to improve their performance.

During our discussion, some focused on the individual quantitative measurements to focus and motivate individuals on achieving important goals. For example, tying individual goals to the organization’s KPIs was cited as an effective way to align behaviors with goals and make sure everyone knows exactly what they are expected to do.

Other Partners said that group rewards and recognitions were more effective than individual metrics. For example, one Partner 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.

We also discussed experience with financial rewards relative to intrinsic rewards, such as recognition.

Financial rewards did not necessarily produce the best results. One participant explicitly pays people for participating on improvement teams in some of their plants while one of their Midwestern plants is prohibited from paying for participation. The Midwestern plant relies on intangible rewards such as recognition and expressions of “thanks.”

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.

The keys to effective use of recognition as a motivational method are timeliness and making the recognition public. This is no time to keep your appreciation under a barrel. One successful program is called ‘Six Star’: people award one another stars for helping an internal or external customer. When someone gets 6 stars, they get a gift card and the ‘star of the month’ gets a party, recognition, and a parking space

Conclusions:
While there are clearly a wide range of views about how to manage and motivate performance, several final conclusions generated quite a bit of support:

  • 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 managing performance through the rear view mirror – be proactive!
  • Make more of the goal setting process which produces targets against which we measure performance and take corrective action.
Performance Management

How Do You Manage Performance?

performance_management

Continuing with the theme of “performance management” from our previous post, which shared input from our Partners in Improvement, this post will focus on the specific activities associated with the practice.

While most readily agree that managing employee performance requires first and foremost clear communication of what is important for the organization and how the individual could best contribute, they also recognize that, as one Partner put it, “the #1 reason people don’t do what you want is that they don’t know what you want.”

So, communication about targets and goals can be listed as the first requirement or item on the list of “best practices.”

Further, this communication must not only be done as part of the strategic planning and execution process, but also as part of the everyday conversations and coaching between employees and their managers.

Along similar lines, coaching was considered to be the most important and effective Performance Management method.

This would include providing frequent constructive feedback for individuals, implementing a mentorship program, coaching of teams, and
senior managers exhibiting the behaviors that they are looking for.

The Partners recommended sitting down with people regularly to have a dialog about what is going well, what help they need. Immediate feedback is most useful.

The next activity identified and discussed was performance reviews. Not surprisingly, annual performance appraisals came in for some criticism — but there were also some suggestions for how they might be done better.

Several Partners mentioned that the annual reviews were a source of angst and dread, perhaps by both parties. They were always late and were considered among the more onerous of management responsibilities.

Others questioned their effectiveness. 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.

This example is by no means an exception — Purchasing Departments are often measured by purchase prices, leading to excess inventory when they order in bulk and substandard material when they give too much weight to price instead of incoming quality and timeliness. One of the drawbacks of annual individual performance reviews – especially when tied to compensation — is the high risk of driving the optimization of individual metrics while sub-optimizing the organization as a whole.

But one of the Partners said that their performance review process was greatly improved by increasing the frequency from annual to quarterly. The feedback discussions were both more timely and less stressful.

Others found that when reviews were de-linked from salary adjustments they could focus more effectively on coaching. But then another participant said that they had stopped doing reviews when they had a salary freeze and not able to offer bonuses because the reviews and the salary increases were linked to one another so closely,

Finally, the amount of time spent on performance management varied from 10% to 45%, and it seemed to differ in large part based on whether an organization was focused on formal annual reviews or on frequent coaching or people and evaluation of processes. The majority leaned toward more time and more frequency of interaction.

Our next post will complete the series and will focus on the motivational aspects of performance management.

Performance Management

What is Performance Management?

performance_management

Recent posts have focused on retaining and engaging people, so it seemed logical to continue the discussion about how we interact with one another in the workplace.

Certainly Performance Management embodies this activity.

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 which reinforces the behaviors we are looking for, providing tools and coaching to help people be successful, and 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 Performance Management is unlikely to mean much. One of the Partners measures customer loyalty, sliders/defectors, and Continuous Improvement (CI) impact at all levels.

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.

However one might define the practice, one issue on which everyone agreed was that Performance Management must be an every day job for managers, and it must be approached on a proactive basis.

Our next post will pick-up from this point, and will share perspectives on the specific activities that comprise an effective approach to Performance Management.

Culture building, Performance Management

Ten Steps for Developing a High Performance Culture

five stars

Among the highest achieving organizations are those that have successfully planned and developed high performance cultures.

When helping clients build such cultures we focus on the following ten things:

  •  identifying the underlying assumptions, beliefs and values that cause people to behave the way they do
  • Identifying a clear link between individual performance and organizational goals
  • Identifying a clear link between team/department performance and organizational goals
  • Helping people develop a clear sense of purpose
  • Identifying the necessary time and attention management will need to devote to the performance management culture
  • Creating a work environment that supports high quality and productivity
  • Helping people at all levels understand the core values and beliefs which drive behavior
  • Promoting practices that are in sync with organizational values and beliefs
  • Clearly defining roles and responsibilities, performance gaps and accountabilities
  • Help managers develop and refine their skills and ability to coach for improved performance
Leadership, motivation, 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 Management

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.

Communication, Continuous Improvement, Culture building, Performance Management

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.

Continuous Improvement, Performance Management

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.

Culture, 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