How to Grow Part 1: Performance Management in 3… 2…

“Only 6% believe their current process for managing performance is worth the time, 58% called their process ‘weak,’ with North American companies 20% worse than the rest of the world.” - Josh Bersin (@Josh_Bersin), Corporate Talent, HR, and Learning Analyst & Founder of Bersin by Deloitte

Only 6%... that’s a pretty slim number of organizations who have a strong performance management system. So what’s the problem? There’s a good chance these companies joined the performance management party late - as in after their employee base grew. Create a performance management system before you begin to gather your team. It’s important to know how exactly you plan to manage the performance of a team before they are onboarded. Why? Unless there is a performance system in place, it will be increasingly difficult to accurately develop and maintain a system of performance appraisals, management system updates, and team alignment with each new employee.

Problem: Performance Appraisals

Is it really a performance appraisal if it doesn't truly identify performance? The answer is no. In fact, performance appraisals are sometimes wildly erroneous and can lead to more performance problems than they actually solve. For example, two-thirds of employees who receive the highest marks during their performance appraisal are quite frankly not the organization’s top performers. Sounds like an oxymoron, right? The underlying problem is that these performance appraisals are outdated and tend to be overly biased. The results are less than flattering. While good employees know they are good, bad performers on the other hand don’t know how poor their performance is. This is because the performance appraisal system wasn’t created until after the maturation of the team, so a set standard of performance regulations wasn’t immediately put into action.

Solution: Create a performance appraisal plan when you recognize the need for growth in the number of employees. Doing so will prepare the organization for the new hires and monitor their growth and performance.

Problem: Updating Outdated Issues

It's really just a formality. Does it honestly need to be updated? Absolutely. The outdated system your organization currently uses needs to be updated. While the company may have originally compiled some sort of performance system for compliance regulations, that certainly doesn’t mean the data from the performance appraisals couldn’t be useful. The data for how the employee works and what they get done during the day can set expectations of the employee, demands of the position, and expectations of the supervisor. Updating your performance management process not only helps the development of your employees, but drives business value as well. Unfortunately, only 8% of HR executives say that their organization effectively uses their performance process to drive business value. Therein lies the problem with using an outdated system - it can in fact damage the value of your business.

Solution: Consistently update the performance management system to meet the needs of the organization and the employees.

Problem: Team Alignment

The team doesn't know the goals of the organization, so they don't understand how their performance fits into organizational needs. Often, the biggest downfall for employee performance is their lack of understanding of organizational goals. If employees are unaware of how the company plans to grow, how can they gauge their own performance? When employees are aligned with organizational goals, they are more engaged while in the office. When employee engagement is high, employees perform 20% better and are 87% less likely to leave the organization. In order to form a high-performing team, it’s crucial the entire organization understands and shares goals. President and COO of Technomedia, Marcel Messier said:

“If leadership is unable to create a clear roadmap that can be communicated and embraced throughout the organization, it will be much more difficult to establish a high-performing workforce able to meet those goals. Alignment only will be achieved by ensuring strong leaders are in place at the top and capable of clearly communicating goals and expectations and providing employees with ongoing learning opportunities to expand and enhance their skill sets. Once these factors are put into place, the organization can benefit from an optimized workforce that operates cohesively to overcome challenges and achieve key objectives.” 

Solution: Integrate alignment into performance management. When the team knows how their work affects the organization, they are less likely to leave and more likely to become high-performing employees.

Not all performance appraisals were created equal… the outdated and antiquated ratings will do little to improve an employee’s performance. Performance appraisals must recognize accomplishments and notate areas needing improvement. Likewise, if the management systems the organization uses aren’t up-to-date, it’s unlikely the performance management system will do much to drive business value. Ultimately, without alignment throughout the organization there’s little hope for an overarching level of high performance and engagement.

Your company needs these three things before your team can grow. Otherwise, it’ll not only be difficult to manage employee performance, it will be ineffective. 

See how you can begin cultivating growth in your organization right this second.

Happy Holidays? Not if You Forget Your Employees

It’s the only time of year that it’s acceptable to give a fruitcake. Complete with hot cocoa, stockings hung with care, and holiday bonuses… wait, what? Yes, these are all trademarks of the holiday season, especially the bonuses. Tis the season to recognize your employees, and failing to do so could mean losing valuable employees. Consider the case of a PR firm that usually gave large year-end bonuses and without warning one year, shifted that spend into opening a nice new office. Or what about the high-end magazine that rewarded executive employees with a large novelty candy? Both companies suffered significant attrition before the New Year. Don’t let this happen to you.

Photo Credit: National Lampoon's Christmas Vacation

Frustration can simmer just under the surface of your workforce, but your organization can reduce some irritation by implementing formal recognition and review programs. Organizations that create and sustain an effective recognition program have a 31% lower voluntary turnover rate - i.e., employees quitting or resigning - than those with a poor recognition program. In fact, lack of appreciation at work is the number one reason Americans leave their jobs, but you can use it as a retention tool.

According to the latest Randstad Engagement Index survey, U.S. workers say promotions or bonuses are one of the most effective ways to keep them engaged in their jobs. A holiday bonus increases employee engagement and motivation in the office, which means more successfully completed projects and subsequently more revenue for the organization.

The truth is, your employees might be dreaming of a white Christmas, but they are expecting recognition before the New Year. Some (like Clark Griswold) may even be counting on that bonus to make their Christmas a merry one.

How and When to Reward

Just because you tell members of your team how wonderful their work is all year doesn’t mean that will suffice when it comes to the holiday season. Unfortunately, not every company feels that way. In fact, just 27% of small businesses are planning to offer holiday bonuses this year, compared to 35% last year, according to an American Express survey. (Tweet this Stat) That special recognition in the workplace is one of the greatest contenders to combating high turnover rates. So, even though it makes your employees happier at work, it is a business gain as well.

Some pointers:

●      Try to give consistently. If you can’t for whatever reason, let employees know ahead of time.

●      People will talk. You don’t have to give the intern and the top performing sales person the same amount but keep it similar within job titles.

●      Speak up! Bonuses and gift cards have to be declared so give your employees a head up!

The ROI of employee recognition stretches beyond a mere monetary value. The emotional response is what fuels a difference in an employee’s work and engagement. For example, KPMG, an international tax and audit organization, increased awards dispersed throughout the company by 25%. The results were, according to Sara Turner, UK Head of Employee Benefits and Wellbeing at KPMG:

“What you get with the recognition is a really emotional response… Though the monetary value is low, the impact is really huge. In monetary terms, recognition is so much less expensive [than other reward systems], but what you get is this emotional gut response from people who are overwhelmed, happy and excited when they get an award. People are so engaged because someone has appreciated the extra effort they’ve gone to and taken the time to make sure they acknowledge it and that others acknowledge it as well.” 

Think Outside the Box

The business landscape has changed over the last few years. Employees are feeling the effects of a slowly healing economy. Unfortunately, employers aren’t so trigger happy when it comes to expenses that aren’t deemed “necessary.” Individuals on your team expect some kind of bonus around the holidays. If business was down, communicate it well and set expectations before the office party if you are planning on giving a non-monetary gift.

On average, there is an expectation of a 2.9% bonus increase among the workforce this year. (Tweet this Stat) Even if you’re not prepared to dispense a monetary reward for all of the meritorious hard work from your team, leadership can still give employees a “bonus.” If budget constraints prevent a traditional bonus, Glen Tullman, CEO at Livongo Health suggests trying these alternatives:

●      Give a tangible gift - A gym bag, a nice sweater, or a small piece of technology would suffice. However, don’t put any company logos on the gift… otherwise the gift loses the “it’s the thought that counts” factor. 

●      Offer a chance for community involvement - Websites like TisBest allow employers to offer “gift cards” that employees can use towards the charity of their choice. This gives them a semi-monetary reward for their hard work and the opportunity to give back to their community.

●      Give to employee families - Why not engage your employees through their support systems? Families are important to the engagement of your team, so try sending a basket of gourmet snacks or giving a list for the family to choose from.

●      Give time off! Can’t afford a lavish bonus? Give the gift of paid time off. People love unexpected vacations. (Tweet this Tip)

The holidays can be a stressful time for employees. Finishing year-end projects around the office can be taxing. Acknowledging their work and rewarding them through traditional bonuses or non-traditional gifts maintains engagement levels and produces a real ROI for the organization. Bear in mind that performance bonuses and holiday bonuses should be kept in two separate categories. As company leadership, ensure you’ve dotted your holiday I’s and crossed your T’s; make employee recognition part of your holiday to-do list this year. Give your team a little something special (hopefully more than just a holiday fruitcake).

Friends don't let friends be the Frank Shirleys of their company. Spread the holiday cheer by tweeting these year-end bonus tips.

The Million-Dollar Performance Review Question

If there’s such a thing as a million-dollar question that managers should ask employees during a performance review, it’s this: What do you really want to do?

Why is such a simple question so valuable? First, it helps you understand exactly what your employees are passionate about, what engages them, and what they see as truly meaningful work. Second, it helps to instill greater accountability in your people by involving them in personally managing their careers and creating reach assignments. And third, it shows that you care about your employees’ needs as well as those of the company.

Add those factors together and you have a powerful equation for boosting the value of your performance reviews—and for raising employee engagement, happiness and retention levels.

Another reason this simple little question is pure gold is that helps transform your performance appraisals from backward-looking reviews into future-focused planning sessions. In fact, more and more companies are de-emphasizing the “review” aspect of their performance appraisals and focusing more on looking ahead—at what makes employees happy and productive, how they’d like to grow, and how they envision their future with their employers.

Texas Roadhouse recently changed its performance review process to be more forward-looking (which you can read about here). And Union Bank & Trust revamped its performance appraisals in a way that more deeply engages employees in the review process (which you can read about here). Both companies now ask employees about their feelings regarding their work and the future.

In her Harvard Business Review post, “IfYou’re Not Helping People Develop, You’re Not Management Material,” professor of management Monique Valcour offers managers this piece of advice: “When planning your team’s work, ask employees to identify both how they can contribute and what they would like to learn. This gives employees the primary responsibility for clarifying what they want to learn and for proposing ways to incorporate on-the-job learning. It also helps to avoid having employees volunteer to perform only the tasks that they are already highly skilled at.”

She also urges managers to require employees to report back to them periodically on what they’ve learned and how they’re using their new skills and knowledge.

Asking the million-dollar question—“What do you really want to do?”—during your performance reviews can be a powerful way to maximize employees’ contributions and commitment levels. And when you actually put your findings to use, the results will be money in the bank.

~

Connect with the individuals and sources highlighted in this post by clicking the links below:

@TexasRoadhouse

@UnionBankTrust

@HarvardBiz

@MoniqueValcour

A Players or Top Guns: Call Them What You Want, You Need More of Them

Can you afford to put up with mediocre employees?

Humetrics president, Mel Kleiman, posed this question in a recent TLNT.com post. Despite the obvious answer, Kleiman notes that employers and managers frequently keep mediocre workers around rather than replace them with top talent (whom he refers to as “A players”). He even offers 10 reasons they do so, including:

• They’re focused on low turnover rather than on retaining the right people.
• They don’t really know what constitutes an A player.
• They use a screening process designed to screen people out rather then let the right people in. 

Recruiting top talent isn’t easy by any stretch. But it’s worthwhile because, as Kleiman points out, “hundreds of research studies have quantified the difference between having an ‘A’ player versus a ‘C’ player in a job … (and) every one of them concludes the difference in productivity and the impact on the bottom line is anywhere from 20 percent to over 1,000 percent greater return when you compare the best, most productive employees to those who are average.”

Of course, to effectively recruit top talent, you need to know who your current A players are and precisely what sets them apart. Once you do, you’ll know which skills, behaviors and attributes to seek out as you recruit new talent and as you craft your employee learning and development programs. (You can read more on this topic in a previous post, “Do You Know Who Your ‘Top Guns’ Are?”)

If you’re interested in raising the bar on your recruitment of top talent, you might consider a recommendation from Jonah Berger, marketing professor at University of Pennsylvania’s Wharton School: “Stop selling, start storytelling.”

Rather than trying to sell A players on a specific job, Berger encourages employers to snag top talent through word of mouth from their own employees and storytelling related to their actual work experiences. In a recent article on Inc.com, “Howto Use Viral Marketing to Recruit Top-Notch Talent,” Berger notes that there’s an entire psychology behind the power of social sharing and word of mouth—and this same power should be applied to attracting new talent.

A players, top guns, high-performance workers—however you refer to them, one thing is certain: the best way to attract more of them consistently is to use this three-step process:

Step 1. Identify your current top performers and what makes them special.

Step 2. Use your findings as a “template” for recruiting and hiring new talent.

Step 3. Leverage your current top performers to tell your brand’s “story” in their own real and meaningful terms.

~

Connect with the individuals and sources highlighted in this post by clicking the links below:

@MelKleiman

@TLNT_com

@j1berger

@inc