1. Inconsistencies in manager ratings

Although purported to be based on objective data, performance ratings are subjective. Because of this manager differences will always be present. One manager may rate “harder” than another, for the same level of output, behaviour and or effort. Conversely, some managers don’t like to cause waves and so will rate everyone the same, or not distinguish poorer performers from their better performing colleagues.

2. Ratings can be adjusted based on the size of the bonus pool.

Much to management’s chagrin, it’s no secret that ratings are influenced by the money available in that year’s bonus pool. This influence can be conscious: “We can only have 12% of the population achieve an outstanding rating this year”, or unconscious: the messages about cost consciousness come through loud and clear to managers who respond by limiting the numbers of people rated  highly

3. Managers aren’t good at honest conversations

In most cases the appraisal conversation is an opportunity for your manager to help you understand where you have under-achieved (thanks, really….). The reality is that most managers aren’t good at having frank and honest conversations that help to improve performance. They either

• don’t tell you the truth, for fear of facing a challenging personal reaction, or an actual debate, or
• hit you like a ton of bricks with their explanation of your failures.

None of these methods has been shown to improve individual performance, and does in fact, decrease engagement and satisfaction.

4. The power is all one way

No matter which way you look at it, the performance appraisal always consists of a subordinate being assessed by their superior. This relationship power is never openly stated or discussed, but it always true. So it’s not an even playing field where two adults can equally debate issues. It’s a loaded one where the subordinate wants to say and do the right things to support their career, and the manager has the final say about what the performance was like. We can try and soften the edges of this in all sorts of ways – getting feedback from customers, encouraging disagreements to go up the line etc – but at the end of the day, those in power will always have the final say. It’s been that way since the dawn of time.

5 .Performance Appraisals focus on the wrong things

Numerous studies show that telling people what they did wrong is much less effective in lifting their future performance than recognising their strengths and acknowledging good outcomes. So the basic premise for the performance appraisal leads to poor outcomes. Typically an appraisal or review considers why people didn’t achieve 100% for each objective, and a discussion about what they didn’t do enough of, should have done differently and so on. If there is a conversation about what went well, it’s usually short and done upfront, then overwhelmed by all the improvement suggestions.

6. Managers don’t take accountability for performance ratings of their team.

If the individual hasn’t performed well, then it’s on them.

• Why is it the manager has no stake in this outcome?
• Where were they during the year supporting people to achieve their objectives?
• If the planning was poor, why didn’t they notice and help?
• If there were obstacles, why didn’t they remove them? If people were being blocked why didn’t they help improve relationships so things could be achieved?

A manager is successful when her team is successful, so surely we should expect there to be some joint accountability for outcomes? No, with the accountability all resting with the individual, and the power all resting with the manager, the performance appraisal can never be an equal affair.

7. People don’t trust the System.

For all the reasons above, employees are overwhelmingly cynical about the value of performance management systems, and rightly so. They don’t see them as adding value, instead they view them as unfair, something that managers “tick the box” on because they have to.

Is there a better way?

Of course it’s easy to diss performance management and talk about how it doesn’t work. What else could we be doing to drive better outcomes and enthusiasm for the process?

• Stop thinking about performance reviews as a 1 way street – think of them as a set of goals both parties need to deliver on
• With that mindset, set joint goals between leader and employee that both are accountable for delivering on
• Agree up front what the leader will do to faciliate the achievement of the objectives
• Jointly agree how often the you will monitor/review/discuss progress towards the goals, so issues can  be resolved on an ongoing basis
• Review sessions change to becoming progress conversations, and are held as frequently as the two parties agree is required.

This shift changes the nature of the conversation from one person assessing anothers performance, to two people assessing their joint progress.

You can read more about this philosophy at: Wall Street Journal

There’s also a great book called “Get Rid of the Performance Review” which I highly recommend.

Many managers have similar cynical attitudes about the process – seeing it as a low value activity they need to tick off to satisfy their managerial responsibilities.

Where to from here?

The future of Performance Mangement lies not in tinkering with the annual review, or implementing even more “state-controlled” procedures that specify pulling apart performance in the mistaken belief that talking about “problems” will change our behaviour for the better.  

In a previous post I referenced an article by Dr Culvert from UCLA Anderson School of Management in Los Angeles, who advocates honest conversations about the success of the partnership between manager and employee as the way forward. This idea resonates strongly with me.

I have worked for some very forward thinking organisations, ones who dedicate huge amounts of effort to their performance management processes – ensuring they are procedurally fair, training managers and employees in the process, and linking performance to annual goals. Despite this effort and the good intent behind it, these organisations fair only marginally better (in my opinion) when it comes to how the process is valued and perceived by the workforce.

We need some new thinking – that much is clear. As the old saying goes – the definition of insanity is to keep on doing the same things the same way, but expecting a different outcome.

What goes on in your organisations? How much effort is being thrown at managing performance, but for little benefit?

Performance Management Gone Haywire

When people are asked to provide their impressions of Performance Management processes, the answer is invariably negative or neutral. It’s not often that the process is positively endorsed by those who use it. So where are we going wrong?

As managers, we know we need a management system of some kind for all the components of performance:

• getting people to work on things that will help the business achieve it’s goals
• identifying and overcoming obstacles that might prevent success
• understand and checking our progress regularly
• giving people a forum for talking about what they are doing and how it’s going
• providing the appropriate checks and balances
• recognising and rewarding performance

I believe there are 5 fundamental reasons why Performance Management is not viewed positively.

1. Reviewers don’t have the skills or confidence to give feedback appropriately

Giving feedback constructively is a learned skill. Unfortunately for their team members, many managers haven’t had any training or support in learning this critical skill. So when it comes to review time, feedback is either:

1.     blunt and delivered with no thought for the impact or consequence,

2.     not provided at all because the manager wants to avoid disagreement or conflict, or

3.     is given in such a wishy washy way that the reviewee actually misses the fact they are being given feedback!

This is one of the most critical capabilities a manager can have, with far-reaching positive or negative consequences. Providing ongoing coaching and support should be part of the approach to managing performance.

2. Employees don’t see Performance Management (PM) as a 2 way street

Is PM something that is ‘done’ to employees, or is it jointly owned with equal responsibility between the reviewer and the reviewee?

Imagine a review session where the employee turns up having evaluated their own performance, provided examples of how and when they achieved each objective, had references from other people about their attitude and behaviour, and already had drafted some challenges they wanted to work on in the next 12 months. When ownership for the process lies with the employee, this is the result.

Getting to this stage takes time. The business needs to consistently communicate expectations and help the manager’s adapt to the new positioning. Instead of PM being viewed a bureaucratic process over which they have no control, employees own their own performance and contribute equally to the discussion about performance levels and results achieved.

3. The annual review is the prime focus

If PM consists only of an annual or bi-annual review, the business is really missing the point. Reviews are useful checkpoints, but PM occurs 365 days a year. When review time comes around there should be no surprises. And I mean none. If there is, the manager is not doing their job effectively. Any performance issues, or comments about achievement, need to be given as they arise, not saved up for discussion 3 months later in a review.

On this basis, the review becomes more of a confirmation of what each party already knows. This shouldn’t take long to go through, leaving plenty of time to discuss development needs and new opportunities (see next point).

4. Not enough attention is given to the future

In many cases the entire review is spent dissecting the previous 12 months. Objectives and goals do need to be valuated and measured – don’t get me wrong – but the real value of a review lies in the discussion about the future.

What skills will the employee need to develop to become even more effective in their job? What work-related challenges can they get involved in that will grow them beyond where they are today? How can the business utilize their strengths in other areas? What gaols do they want to set themselves over the next 12 months? How can the manager help them achieve these things?

It’s this focus on future development and opportunities that energizes people, makes them feel valued and keeps them engaged with the business.

In an ideal world, reviewing past performance and discussing future skills and opportunities will take equal time in a review.

5. There is no follow-up

This is the credibility killer. All throughout the performance year, managers will make commitments to take actions and follow-up. If this doesn’t happen, the whole process loses integrity. Once employees experience this firsthand, it’s a long road back.

Commitments must be upheld, and managers and employees equally need to be accountable for their part in this.

Getting employees to think about Performance Management as a positive process that adds value is the goal. This only happens when the managers have the right skills, the business adopts an ongoing approach that consists of much more than annual reviews, when commitments are made and kept, and when employees own the process equally with managers.

If you have any interest – this Wall Street Journal article may provide a new way forwards. Here’s the high level summary:

The Promise: Performance reviews are supposed to provide an objective evaluation that helps determine pay and lets employees know where they can do better.

The Problems: That’s not most people’s experience with performance reviews. Inevitably reviews are political and subjective, and create schisms in boss-employee relationships. The link between pay and performance is tenuous at best. And the notion of objectivity is absurd; people who switch jobs often get much different evaluations from their new bosses.

The Solution: Performance previews instead of reviews. In contrast to one-side-accountable reviews, performance previews are reciprocally accountable discussions about how boss and employee are going to work together even more effectively than they did in the past. Previews weld fates together. The boss’s skin is now in the game.

This is definitely worth a read. There’s quite a conversation happening out there on the future of reviews and changing current practices. I’ll endeavour to keep you posted.

Why Performance Reviews Don’t Work

It wish I could say that 50 minutes was all it took to  say everything that needed to be said.  Unfortunately most of us know that  you could spend 2 days talking about this and still not cover everything. Still – here is the essence of my talk.

Creating a Dream Team

Dream Teams are created when leaders initiate and take ongoing action on numerous fronts. Typically, doing one or two things once or twice won’t get you anywhere – you an integrated and considered approach encompassing multiuple strategies. So what are soem of the key strategies??

1. Recruit the right people into the right roles – and if you’re not sure of your recruitment skills, get some outside help. Research shows that gut feel doesn’t actually cut it.

2. Think of managing performance as something that happens all year around, not once a year when the annual review or salary review becomes due. The cycle of planning, doing and reviewing is continual.

3. Your ability to give (and receive feedback) is a critical success factor. If you’ve ever been on the end of poorly delivered feedback, you’ll know how important this is. I talked about simple models for giving feedback – which I’ll share in future blog posts.

4. Watch our for Performance Killers – some of the big ones are:

• different rules/standards for managers and employees
• a vacuum – no feedback, especially for good performance
• not dealing with performance issues of others
• no plans – either for the team, the business or the individual

5. Balancing your focus – we often spend time talking about what has happened, especially as it relates to what people have done incorrectly in the past. People get energised about the future, so balance your messages between the past (what has happened), the present (what is hapenning now), and the future (what will happen).

6. Developing your team – growth is a huge motivator. So you need to work out whatr each person needs to do to a) grow in their current job, and b) grow into a future role or career that they want. An individual approach works best, using a variety of mediums:

• on the job training
• formal courses
• buddying and mentoring
• project work
• job shadowing etc

Any performance management process should answer 4 important questions for your employees:

• What do I need to do and how well? (Direction)
• How am I doing? (Feedback)
• What happens when I do well? (Reward/Recognition)
• What happens when I need/want help? (Support/Development)

Lets look more closely at each of these:

Direction

Employees are not mind readers. Just because it is clear to the manager exactly what is expected, doesn’t mean the employee has the same understanding. Having a detailed discussion about exactly what the job requires and any specific priorities is the first step in good performance management. Key points to cover include:

• what needs to be achieved throughout the year
• what data or information (evidence) will be used to measure performance
• the key actions needed to achieve the desired outcomes

Both parties should have a written record of this discussion either in the form of a job description or a set of specific objectives for the next 6 or 12 months. Written documentation leaves little room for misunderstandings or confusion between manager and employee about the expectations of the job.

Feedback

Observing the performance of your employees and providing feedback about it should be a routine part of the performance management process. Feedback is most effective in making a difference in work performance when the employee has confidence in the basis of that feedback. And you as the manager will be more confident if your feedback is based on information that you can support.

For this reason the most useful feedback should be based on observed and/or verifiable work-related behaviors, actions, statements, and results. If you can provide specific examples of good and “not so good” performance, your employees will be confident that you have taken time to notice what they are doing and sincerely support them in improving. This kind of effective feedback helps the employee sustain good performance, to develop new skills and to improve performance when necessary. Feedback should be given as it is required – it loses effectiveness if not delivered at the time an event occurs.

Reward/Recognition

All employees need to have a clear understanding of how the reward and recognition system operates in your business. Most probably everyone gets paid a salary for doing their job to a certain level. What happens when an employee performs significantly above that level? How will they be rewarded, if at all? If there is no incentive for employees to be outstanding, then the likelihood is that they won’t put in the extra effort. A well designed scheme will clearly identify the rewards and incentives available for strong or outstanding performance.

Support and Development

This aspect of managing performance focuses on current and future skills, behaviours and knowledge. Firstly, the discussion should focus on what training or other support the employee needs to be the best in their current job – identifying skills and behaviours that need to be improved. If you can support the employee in doing their job better, they will have reassurance that their contribution is valued by the business. The discussion should also focus on where the employee would like to go in the future and how you can help them achieve their longer term career goals. If they are being considered for other roles in the business then you will need to identify what new skills and behaviours they need and help them to develop those.

If you are managing people, then people management activities need to take up the majority of your time.  Each business can only be as effective as the people that work in it. One of the best ways to ensure your employees are being effective is to monitor and provide feedback on their performance. Setting goals, making sure your expectations are clear, and having regular discussions will help people perform to their best.  The payoff for the business is increased employee productivity, knowledge, loyalty and contribution.

Although workplaces and management styles have come a long way in the last decade, the command and control style of management behaviour remains common practice in many companies. This management approach basically means that employees are told exactly what to do, when to do it and even how it should be done. The manager is in charge, has all the answers, and fixes all the problems.

It’s no surprise that plenty of people find this approach demotivating, and that workplaces with a command-control style are rated as pretty unsatisfying. When it comes down to it, none of us really enjoys being told exactly what to do, and neither do our employees. When people feel as though they have no say and are given no opportunity to contribute outside of their work tasks, then they switch off and become “disengaged”.

The command and control approach is being phased out for a more collaborative and engaging style – a “Coach” approach or being a “manager-coach”. This is a positive shift – as long as we support our managers in understanding what on earth is meant by a “coach approach”, and how expectations of them are changing.

Coaching – What does it really mean?

The coaching profession has exploded in recent years, diversifying across many different fields and industries. All of these people are dedicated to helping others achieve their goals, improve aspects of themselves or their business, or move forwards from where they are today.

In a work environment, the role of a manager-coach can be described as :

• achieving results and excellence through others rather than personally taking care of things, and
• focusing on developing employees in order to achieve business results rather than micro-managing their every move

Adopting coaching as a management style requires managers to help other people unlock their potential and enhance their own performance. It’s about supporting people to learn instead of telling them what the answers are.

The mindset of the manager-coach is to create an environment that fosters learning, independent thinking and opportunities to contribute. The manager-coach doesn’t want to be seen as a solution provider. Rather, they want to be seen as a facilitator, paving the way for team members to achieve their results.

Coach managers are a role model for others. They are excellent listeners and communicators, providing perspective and encouragement whilst setting high standards and expectations.

Making coaching behaviours part of what you do:

• Stop thinking about employees as people that need to be controlled or managed and give them the latitude to take actions and make decisions. Trust is a vital component of this equation. If you can’t trust people to do their jobs well, then you either have the wrong people in the jobs, or you have the right people but you haven’t trained them sufficiently. A third option is that the people are properly skilled, but the manager just can’t let go.
• Listen, listen listen. If there are unhappy or disgruntled people in your business, you can guarantee that at some stage they’ve tried to tell you what the problem is. It’s likely you weren’t listening (or didn’t want to listen), or perhaps your initial reaction made the person think twice about bringing the problem to you. Truly listening is one of the greatest skills to develop, regardless of your role. Good listeners are genuinely interested, convey empathy, and want to find out what’s behind the conversation. Great coaches are great listeners -without exception.
• Focus on developing the strengths of each employee rather than managing merely for results. Identify each person’s development needs and commit to following through on them. When people are growing and improving, their enthusiasm and effectiveness is greater. And they feel more connected and loyal to the company for supporting them.
• Endorse effort and growth instead of pointing out failures or errors. As individuals, we all know how seldom we are given positive feedback, but how often we are reminded of our “mistakes”. Instead of pointing out errors, the coach-manager accepts them as learning opportunities and uses them to develop their employees. The focus is on making sure the same mistake doesn’t happen again by fixing the source of the problem.
• Stop providing solutions. Managers often achieve their positions after being technical specialists, and so will have an opinion or view on how to “fix” situations or problems. The mindset is that it’s usually faster to tell someone what to do, or do it yourself, than give your employees an opportunity to figure it out. By always providing the answers, managers take away the learning opportunity for their employees to come up with alternative (and potentially better) ways of doing things. If you catch yourself about to provide the answer, take a deep breath and ask a question like: “What would you do in this situation?
• As a manager, stop making all the decisions. You don’t have all the answers all of the time. Engage those around you – your team and peers – when it comes to finding a way forwards. Involvement breeds ownership and engagement. The more you can find opportunities for people to contribute to the decision-making process and encourage people to have their say, the more your employees will feel connected and satisfied with the company.
• Be unconditionally constructive – no exceptions. Don’t patronise or be critical of others – take complete responsibility for how you are heard. If you catch yourself about to make negative remarks, take a breath and rephrase your words to get your message across without the emotional attachment. It is possible to phrase everything in constructive terms – even a negative sentiment. Practice makes perfect!
• Create an environment where people want to work with you, and feel valued and respected. Make it clear to your employees what they are responsible for, but give them the latitude to go about it in their own way. In short, treat them the way you would want to be treated.

But how much time do we actually waste?

Late last year a survey by UK based Management Consulting Group found that next to Portugal, Aussies waste the most time at work. They calculate it as being 45 days on average per year. Holy moly – 45 days! In a 7.5 working day, this number represents around 20% of our work time. Let me quote some other unbelievable statistics from this global survey:

• In 6 countries where statistics allowed comparisons, the estimated economic cost of wasted time was 5-9% of GDP (gross domestic profit) – between US$11 billion to US$658 billion.
• the % of GDP lost to inefficient working durng 2005 and 2006 was highest in Australia at 8.9%.
• Next worse was the UK at 6.9%
• Despite Australia’s high level of wasted time, it is in the top 2 locations for highest labour productivity for the for years between 2003 to 2006.

So while our productivity stats are among the best in the world, clearly there is considerable room for improving processes.

So often cost cutting measures focus on reducing heads. These figures clearly show that sorting out how we work could improve productivity significantly, and create sustainable bottom line improvements without the need to let valuable skills walk out the door.

I know where I’d be looking if reducing cost was an issue is my business.

1943 Guide to Hiring Women

I’m pleased to say the book of interview questions - The Interview Question Bank - has now been finished and is available for download from the site.

The book contains behavioural questions for 44 different competencies which can be applied to most roles in most industries. It also has a bit of an intro on the behavioural interviewing process, and how to use it.

Follow the link below to check out the table of contents and a page from the Book so you can see what you’re getting. It’s an electronic book, so you can download it immediately. Check it out here.

The truth is, there’s a significant proportion of managers out there who don’t get it’s value (let alone the fact that it costs almost nothing to do and is therefore, also a no-brainer of a strategy – but I won’t go there).

The research is clear: there is a direct correlation between recognition and employee performance and productivity.

So it makes good sense to provide consistent recognition. In fact, doing so is a vital responsibility of a manager. In the simplest of language, when efforts are recognised, people feel valued and satisfaction grows.

And you always get more of the things you recognise.

So what constitutes a successful recognition strategy or program?

According to Recognition Professionals International (an actual organisation dedicated to promoting the value of Recogniton in organsations), a comprehensive program includes three components that promote:

Day to Day Recognition - frequent, ongoing, and informal. It may include simple praise or thanks, awards, celebrations and thank you notes. All employees are eligible for this kind of recognition, supporting the process up, down and across the organisation.

Informal Recognition – singles out individuals or teams for progress toward milestones, achieving goals or projects completed. Celebrations may include low cost mementos or refreshments as a way to celebrate achievements or outstanding positive behavior. It is less structured than Formal Recognition and reaches a larger percentage of the employee population.

Formal Recognition - a structured program with defined processes and criteria that link to company values and goals. This kind of recognition usually includes a nomination and selection process, and public recognition of the successful nominees.

Recognition works best when it is tailored (more on that in the next post). I’d be interested – what kinds of recognition are used in your company?