Note To Performance-Driven Companies: Yank Those Stacked Rankings!

There’s been a lot of chatter lately in the media and across social sites about the subject of stacked ranking (aka, “forced ranking,” “rank and yank” and few other colorful terms).

In case you’re not familiar with it, stacked ranking is essentially the practice of ranking

employees along a bell curve. Some employers use the rankings to openly compare workers’ performance (primarily as a way to motive those at the lower end of the curve to do better), while others actually use the rankings to fire underperforming employees.

BusinessWeek ran a story last month about Yahoo’s adoption of stacked ranking. Notably, it had this to say: “The Institute of Corporate Productivity says the number of companies using either a forced ranking system or some softer facsimile is down significantly from previous years. Companies performing well were less likely to be using forced ranking systems than those that weren’t. Just over 5 percent of high-performing companies used a forced ranking system in 2011, down from almost 20 percent two years earlier.”

In our experience, stacked ranking is most commonly used by enterprise-sized companies—those with seriously large employee populations. While this might make sense to some degree, we would never recommend stacked ranking to any employer, no matter how large its workforce is. The reason? The practice can easily become misleading, unfair and demotivating. Equally important, it can stretch out the review process unnecessarily.

Under stacked ranking, a manager is able to give a particular ranking to only a limited number/percentage of employees. (For example, only about 10 percent or so of a group can be ranked as “top performers,” and so on down the line including a specified percentage who must be ranked as “poor performers.”) Once the manager has dispensed the total allotment of a particular ranking, she/he must give all other employees a different ranking—even when these employees deserve to be put into the already-filled ranking. Managers often find it an arduous and time-consuming exercise to carefully work through the problems this system causes and distribute employee rankings as fairly as possible.

In addition, stacked ranking can be demotivating to employees. Example: using a scale of 1 to 5 (1 being poor and 5 being excellent), manager Jane rates employee Dave a 3. Dave deserved to be rated a 4 but all of the 4s were already handed out. Jane explains this to Dave and sends him on his way, thanking him for his performance. How do you think this is going to sit with Dave? Maybe he’ll trot back to his desk happy, engaged and motivated to do even better … but we wouldn’t bet on it.

Bottom line, employees should be rated according to their merits—not according to a predetermined scale or a set of forced categories.

In other words, for truly performance-driven companies, stacked ranking simply doesn’t stack up.

5 Must-Have Features for Your Performance Management Software

Talk about your troubling data …

Asked to describe their confidence levels regarding their own workforce management, employers surveyed by Ventana Research were nearly evenly split: while 51% expressed moderate or high levels of confidence, 49% are only somewhat or not at all confident.

That’s troubling enough but when asked about their workforce management systems:

·      Just 41% said they’re satisfied or very satisfied with their current system.

·      42% are only somewhat satisfied.

·      15% are flat-out unsatisfied.

·      And another 45% indicated they need new applications to improve their workforce productivity and results.

It’s no wonder that talent and performance management software are among today’s most sought after HR solutions. After all, these solutions deliver a powerful set of benefits including greater productivity, stronger employee engagement, better alignment between company strategy and employee performance, and a stronger capacity for conducting sound succession planning.

So, whether you’re in the market to buy new performance management software or you’re simply looking to upgrade your current solution, remember this important (and often overlooked) guideline: don’t compromise ease-of-use just to get the features you want.

Sure, the solution you choose has to offer the right features. No doubt about it. But if the software is difficult to use, your people will avoid it. No amount of training or clever “promotion” can overcome difficult software. In the end, you’ll not only waste your money but you’ll also let down your customers (i.e., your managers and employees at large) and your senior leadership. And you’ll have gone a long way toward losing their trust.

Fortunately, with the array of robust performance management solutions now available, you don’t have to compromise ease-of-use for features. Not if you do your homework properly and research your options online.

However, when it does come time to consider features, certain ones do top the lists of most organizations. In our experience, are five must-have features:

1.     Customizable Performance Review Forms—Cookie-cutter reviews are worthless and a waste of time. The same is true of cookie-cutter software. If a solution doesn’t allow you and your managers to tailor it your needs, move on to another option.

2.     Goal Management Tool—Having the ability to manage and track concrete performance goals is not only wise, it’s an imperative for any company that wants to become truly performance driven. A goal management tool that can be used/accessed throughout the entire year (or performance cycle) helps to maintain strong alignment between employee performance and the company’s goals and targets.

3.     Journal Entry/Notes Tool—This is an especially useful feature—not just for managers but also for their direct reports, as it helps to keep both parties informed and engaged in ongoing communication about goals, action items, areas for improvement, education and developmental matters, etc.

4.     Strong Reporting Function—This makes it easy for managers and HR to run performance reports, conduct proactive succession planning, and share this information efficiently among key personnel, department and functional heads, and senior leaders.

5.     eSignatures and Automated Notifications—These are features that enhance compliance, facilitate administrative actions and maximize convenience—all of which help to ensure that people actually enjoy and utilize your software.

If you’re looking for added value, be sure to explore software that offers these additional features:

1.     360-Degree Feedback Module

2.     A Learning Management System and Learning Content Integration

3.     Compensation Management

4.     A Mobile App

These features are becoming increasingly attractive to organizations that value comprehensive solutions that can be accessed from a wide range of devices and technologies.

Bottom line, you no longer have to sacrifice ease-of-use to get the features you need in your performance management software. Research your options carefully and you’ll make the right choice. Even better—you’ll help your company become significantly more performance-driven.

From the Flight Deck: Clear a Runway for Your High Performers

A Bersin by Deloitte study has shown that organizations with highly effective employee development plans have about twice the revenue per employee as organizations with poor plans. And earlier research from Bersin & Associates revealed that senior leaders who coach and develop employees (and who hold others accountable for doing so as well) are three times more effective at producing improved business and talent results than those who do not.

Of course, to get these kinds of results you can’t rely on a one-size-fits-all employee development strategy. You need to tailor strategies to fit your people. One perfect example: design strategies specifically for your high-performing employees.

These are the individuals who keep your company running right now. Their work and their contributions are vital to your success today. Don’t confuse high performers with high-potential employees—those who aspire to holding top leadership roles within your company. While high-potential employees are often high performers, high performers don’t always have their hearts set on holding senior leadership roles.

Distinguishing between these two groups is important because your high performers need their own “runway” to maximize their success. This runway includes dedicated development plans and budgets as well as timely, ongoing performance assessments to ensure their work remains aligned with key company goals and targets. Without these regular assessments, it’s all too easy to allow high performers to keep plugging away at tasks and responsibilities that no longer reflect the company’s evolving needs and goals.

Here are three tactics that you can use to help your high performers take flight:

1.     Set clear expectations with managers: Give your managers a clear understanding of what high-performance behaviors are—and how they might vary by function, department, team and role. Sharing these expectations makes it easier to identify high performers and communicating back up the chain to executive leadership who those individuals are. It also makes it easier to build out development plans and anticipate what an individual’s or group’s productivity will look like after further development.

2.     Manage performance proactively: True performance management is relentless and requires proactivity—anticipating the challenges you’re your employees will face and then providing them with the tools, guidance, support and constructive feedback they need to overcome these challenges as quickly as possible. Development doesn’t always have to focus on the long-range or on future roles. And don’t forget to reward success. While simple recognition and pats on the back are useful, they’re not acceptable on their own where your high performers are concerned, especially not for those making serious contributions to the organization.

3.     Keep everyone on track: Make sure that high performers are getting the support they need, particularly when their work environment changes or becomes chaotic. Temporary assignments and rotation of team members, for instance, can decrease the productivity of even your highest performers. Managers should focus on the individual performance of team members first and then look to manage disruptive external factors. Managers who put performance first—and do what they can to facilitate success—also build trust with their teams.

Some employers are tempted to focus most of their resources and attention on high-potential employees because they foresee a greater/longer return on their investment. But this is a mistake. While high-potential employees are important, high performers keep our businesses running in the here and now. Ignoring them can prove far more costly than we imagine.

Download our white paper, “Giving High Performers a Runway,” to read more about creating robust development strategies for your company’s high-performance employees.

4 Trends That Are Transforming Performance Management and Organizational Learning

At its core, performance management is all about giving our people the information, resources and guidance they need to achieve specific goals. Sounds simple enough. Of course, the devil is in the details.

One reason performance management is so challenging—the business world isn’t static. Our organizations evolve. Our business goals and targets shift. Our customers’ needs change. Some of these changes occur swiftly while others take time. But there’s no stopping them.

It’s a good thing, then, that significant changes are occurring to the tools, technologies and techniques at our disposal for managing performance and developing our employees. In fact, here are four trends that are on their way to becoming standard operating procedure for improved performance management and corporate learning:

1.     Bring your own device (BYOD) policies—Many companies are adopting these policies for a variety of reasons including their cost-effectiveness, their appeal to younger workers, and the 24/7 connectivity mobile devices provide to workers who travel frequently and work remotely. In addition, a growing cadre of talent management and learning/development providers are now delivering mobile solutions as part of their offerings, which enable companies to share powerful tools and resources with their people in exciting new ways. (See Gartner’s interesting research on BYOD here.)

2.     Bite-size learning—This refers to the practice of breaking topics and lessons into smaller, more “digestible” pieces. The rationale: to enhance retention of information and to allow busy employees to consume a topic in a few minutes. It also makes learning incredibly more effective in the age of the mobile, fluid, and multi-generational workforces.

3.     Location-based learning—This is the kind of learning you see taking place in museums and tourist sites. The learner is presented information on the spot via sound, images or text—or a mix of these three. Sound is delivered through headphones or speakers while images and text are delivered to a variety of devices including smartphones, laptops, tablets or screen projectors. Smartphones, in particular, have dramatically increased the popularity of location-based learning.

4.     Cloud computing—The “cloud” offers a convenient and inexpensive way to access an increasing selection of tools designed to help organizations track and improve employee performance, learning and development. Cloud-based solutions eliminate the need to update software manually, and they facilitate the easy sharing of information, resources and tools (especially those related to learning programs and knowledge sharing). Plus, cloud-based solutions are particularly attractive to enterprise organizations and companies with large, dispersed workforces.

Without question, those of us who want to improve all aspects of performance management—from assessments to learning and development programs to compensation management—need to take better advantage of these concepts and technologies.

For most of us, this means arming our companies with systems and solutions that enable us to do several key things well:

·       Empower our learning leaders to easily create development goals and recommend specific learning activities based specifically on an employee’s performance appraisal ratings.

·       Give employees easy access a full external learning curriculum that supplements our internal training and development content.

·       Provide our people with online access to a comprehensive learning management system.

·       Provide our managers with real-time access to reporting analytics and transcripts of learning activities.

The more we embed these strategies into our business cultures, the better we’ll become at building workforces that deliver real competitive advantages.

Interested in reading further about the convergence of talent management and transformational technologies? Download our white paper, “Performance Assessments in an Increasingly Mobile World,” which is available here.

Is Your 360° Feedback a Few Degrees Short?

For many companies, the answer to this question is a resounding, “Yes!”

The reason—their employees aren’t conducting self-reviews.

If this is the case at your company, your “comprehensive” feedback is not only incomplete but

it’s also causing you to miss out on a golden opportunity—the opportunity to drive truly targeted performance improvements, to raise employee engagement levels and to manage your talent more effectively.

Properly instituted and utilized, self-reviews impart all of these benefits to employers by helping them facilitate open communication between managers and direct reports; by encouraging personal growth in individuals at every level of the organization; and by making performance management a responsibility that managers and employees share.

Additionally, self-reviews help employers:

·      better understand how employees “see” their performance and the contributions they’re making;

·      address critical gaps between employee perception and reality;

·      and determine whether performance goals are being communicated and understood clearly.

Employees themselves also benefit from self-reviews in a number of ways. For example, employees gain a greater sense of control over how they’re being judged and evaluated when they conduct self-reviews. This translates into greater satisfaction and commitment. Self-reviews also give employees the opportunity to:

·      engage in a constructive dialogue with their managers in a setting that’s devoted entirely to them (as opposed to team and departmental meetings where performance may be discussed);

·      highlight their significant achievements and how they’ve addressed past performance issues;

·      ask for support, education or training to address skill gaps and weaknesses;

·      and think/talk about their performance in a larger context (i.e., how they’re helping to achieve the goals of their teams, departments, functional areas and the organization at large).

Bottom line, all of this adds up to more engaged employees. And, as a growing body of research has shown, organizations that have high employee engagement are more profitable, more productive and enjoy greater customer loyalty.

So here are a few suggestions that can help your company make better use of self-reviews and reap the considerable rewards:

Have employees begin their annual reviews with self-reviews. This is a clear demonstration of your respect for employees and your interest in hearing what they think about their performance. Instead of feeling like a one-way critique, your performance reviews will take on the characteristics of a two-way exchange of ideas and information. And you’ll be able to address gaps in perceptions and expectations more proactively.

Encourage employees to focus on the aspects of their performance that are most important to them. Again, this gives you the opportunity to make sure there is agreement between what employees consider important and what management considers important. As a result, fewer disputes are likely to arise and differences of opinion can be discussed more easily.

Use self-reviews as a reason to hold more frequent (and less formal) performance appraisals. We’re always encouraging clients not to get stuck in the annual review cycle. Companies that hold reviews and performance-related discussions more often can make small, steady adjustments to performance and resolve problems before they become epidemic. Employees are far more open to small “course corrections” in their performance, and they won’t feel blindsided by negative feedback as they might if you wait an entire year to critique their work.

Have employees get personally involved in creating their own performance goals. Don’t just hand your employees their performance goals. Make them your partners in goal-setting and creating performance targets. Employees who have a direct hand in these activities embrace their goals and take ownership of their performance to a greater degree. It’s another way to build up their engagement—and to build a workforce that will give you a true competitive edge.

For other ideas on transforming your performance review process, download our white paper, “From Dread to Moving Ahead: Taking the Pain Out of Performance Management,” available here.

Don’t Be One of Those Managers!

A common mistake is to deliver a performance review and then kick back and wait until the next review period before providing substantive feedback. It’s important that you avoid being one of those managers.

A more effective approach is to follow up after the review and then on an ongoing basis.  One of the

important elements of performance management is ongoing communication and feedback to and from employees.

Follow up is important because it allows for reinforcement of important points made during the review and it allows the employee to provide input in terms of either how he or she is working to modify work behavior to improve performance or meet goals or how he or she may be struggling to improve performance. As a manager, you want to hear from the employee and you want to be able to coach as needed including reinforcement of key points made through the review process.

If the employee has shown improvement or continues to do well, you’ll want to recognize and convey that to the employee. This reinforcement of positives often breeds more positive work behavior.  If the employee is continuing to struggle or is exhibiting negative behavior after the review, the follow up session should be used to address the need to be positive and focus on working to improve performance. 

We know that effective communication with employees before during and after formal performance reviews enhances overall performance. The key is to develop an ongoing communication platform with your employees so that you and they become comfortable sharing positive outcomes, concerns, and ideas with one another. When feedback, formal or informal, is done infrequently a communication void can develop and open two-way feedback tends to lag as a result.

After the next review you perform, follow up with the employee within several weeks to discuss how things are going. Without rehashing the review, reinforce the two or three most important points from the review if you aren’t seeing positive changes in work behavior and let the employee talk openly about any frustrations or any steps taken since the review to address deficiencies or progress toward goal achievement. Coach as appropriate and then make a point of talking to the employee periodically to do a check on progress.

Five Advantages of Automated Scheduling for Employee Reviews

Employee reviews can be cumbersome. In some cases, they take time away from daily tasks and can be stressful for both managers and employees. As a result, they often get pushed aside in favor of handling a big project or conflicts with vacation time.

Employees who are interested in how they're progressing may have to wait several weeks or months
before they are reviewed. This can have a ripple effect. By using an automated process for scheduling reviews, the stress of missed performance evaluations can be eliminated. Here are five advantages to converting to this process.

• No surprises. Automated appointments on the calendar create a system where managers don't get a last-minute notification of reviews. This reduces a feeling of urgency and stress that can be avoided by the advanced notice and a chance for both the employee and supervisor to be prepared.
• Automated scheduling. An annual review or six-month evaluation that occurs at regular intervals and on time provides consistency. It helps employees learn how they are progressing, gives them confidence and enables them to prepare in advance to meet their goals.
• Budget effects. Implementation of performance evaluations sometimes affect an employee's salary. When evaluations are pushed back or skipped altogether, this can skew budget projections. For companies using a fiscal year and use-it-lose-it budget framework, this can have a problematic snowball effect.
• Employee morale. If a raise is tied in to a performance review that comes late or not at all, employees may feel cast aside when their reviews are missed. This can impact morale and performance.
• Friendly reminders. For some people with busy schedules, the reminder feature of performance review software is a notable advantage. It keeps them on task and fills in their calendar to prevent rescheduling and missed deadlines.

Automated scheduling keeps everyone in the evaluation loop on track, providing better results and increased engagement for the employee which makes the manager's job easier in the long run.

Reviewsnap Will Launch First Performance Management Mobile Application at the HR Technology Conference

Reviewsnap, the leading cloud-based performance management software solution, is pleased to announce that it will unveil its new performance management mobile application at this year's HR Technology Conference on October 7th and 8th in Las Vegas. The development of the application came in response to widespread feedback from the company's global client base.

According to Reviewsnap President Dave Arringdale, "We recognize and appreciate that our users have a host of technologies at their fingertips and they want the ability to address their performance management processes while on the go. Our new mobile application will give them access to all of the key performance management tools available within our Web-based solution without having to log on to a laptop or PC."

The application will allow for access from any mobile device, including all iOS, Android, Windows, and Blackberry devices, with internet access. Clients will have the ability to create journal entry feedback on employees, complete performance reviews, participate in 360 degree surveys, manage goals/objectives, and electronically sign-off on reviews. "This application provides further evidence of our commitment to listening and responding to our clients' needs," Arringdale said.

Let Employees Learn When and Where They Want To

Despite the plethora of mobile apps for this, and the dizzying array of cloud-based solutions for that, when it comes to how businesses offer learning to employees, most organizations still rely primarily on

classroom-based workshops.

It’s ironic when you consider that businesses continue to face tight and uncertain budgets; more and more of today’s workforce is choosing to work remotely; the trend toward mobile computing just keeps growing; and the generational makeup of the workforce is getting more complex.

Consider just these two statistics:

·       By next year, millennials — people born between 1977 and 1997 — will comprise more than one-third of the global workforce.

·       There’s recently been a two-fold increase in the prevalence of mobile tools for learning, according to Aberdeen Research.

As Aberdeen puts it, mobile is no longer a “nice to have” for learning programs but a strategic part of any comprehensive learning plan. Bearing all of that in mind, you’d think companies would be on alternative learning methods like white on rice.

Some are. In fact, companies that want to succeed in driving employee development will embrace flexible training alternatives.

Research by futurethink Innovation Institute in 2009 found that almost 62 percent of companies believed that successful learning programs would need to include e-learning options. A whopping 85 percent agreed that most learning going forward would be collaborative. And every company in the study agreed or agreed strongly that learning was going to be done in short time frames, using “micro-modules” for more-focused learning and better results.

That’s some of what flexible learning looks like. At least from the employee’s perspective. For the learning and development leader, it all hinges on — or at least is substantially enhanced by — a new evolution of learning technology. For example, e-learning, collaborative learning, and the implementation of micro-modules have a greater chance of success if they’re supported by automated content-integration solutions.

These operate behind the curtain between the employee and the learning and development leader. They help leverage the full power of the new trend in flexible learning.

Reviewsnap’s automated Learning Content Integration (LCI) module is one example. It lets learning and development leaders extend information gathered from an employee’s performance reviews to automatically develop targeted learning plans for that person.

Some of the ways Reviewsnap’s LCI module makes it easier to consider expanding your learning formats include:

·       Enabling learning leaders to automatically create development goals and recommend specific learning activities based on an employee’s performance appraisal ratings.

·       Allowing employees to easily access a full external learning curriculum, in addition to their company’s custom training and learning content.

·       Providing online access to a full learning management system (LMS).

·       Providing real-time access to reporting analytics and transcripts of learning activities.

In a nutshell, Reviewsnap’s LCI improves talent management by integrating learning activities and performance management. It’s another way business is changing how it manages employee development.

Piece by Piece: Performance Reviews Amid the Changing Nature of Manufacturing

The recent economic recession and the always-competitive pressures in global manufacturing continue to push companies to pay closer attention to the evolving nature of performance and the practices and benchmarks they use to assess and measure performance.

This isn’t a simple case of implementing a standard performance review, though. Manufacturing, by its very nature, has specific challenges and considerations when going through the performance review process.

·       Smarter manufacturing systems create a more sophisticated workforce. While an organization previously rated a riveter or machinist based on their speed and technical ability, they now rate on the ability to run complex machinery and anticipate problems.

·       Lean manufacturing processes have changed priorities in many manufacturing organizations. Working on problems happens in offices, not on shop floors, and being consistent and on budget is essential.

·       The changing competencies of the modern manufacturing employee mean that performance is now a moving target for managers to approach with care and consideration.

In a meta-analysis of studies on manufacturing performance measures, the authors found that modern performance management in manufacturing takes into account factors such as meeting the needs specific to manufacturing and making sure goals are simple to understand while focusing on long-term results, as well as accurately articulating business strategy and results.

How can manufacturing organizations accomplish this in their own business?

Incorporate change into the performance evaluation process. With changes in manufacturing processes, new technologies being introduced, and the global nature of the industry, the ability for employees to evolve is as important as ever. The ability to change and learn should be something that every manufacturing organization is measuring and setting goals around.

Align manufacturing goals with individual performance. With lean protocols in place, every person who touches the manufacturing process is important to the success of the entire operation. Employees’ performance should be in tight alignment with the entire manufacturing process, factoring in individual contributions and their impact on the system.

Measure what is necessary rather than what is easy. In a manufacturing environment, what is important to the organization may not always be what is easiest to measure. While speed and quality of work may seem most important, factors like teamwork and flexibility in tasks may actually be more important and impactful to the bottom line.

While manufacturing may be shifting and changing, effective performance management should be able to meet these challenges head on. Following these best practices can help managers focus their efforts to meet the specific issues manufacturing organizations face on a daily basis.