Performance Management Should Begin Before We Hire Someone

When most of us hear the term “performance management,” we think of performance appraisals, mentoring, employee learning and development—all of the things that happen well after we hire people into our organizations.

But savvy employers know that truly effective performance management starts before we hire someone. It starts with finding and recruiting the right people.

Who are the right people? Danny Gutknecht, co-founder and CEO of Pathways, offers this insightful definition: “individuals whose attitudes, behaviors, mindsets and goals are closely aligned with those of your organization.” Gutknecht also advises employers aiming to raise the bar on their performance management to get a clear picture of what makes their best people a great fit for the organization, then hire others like them.

The upshot of Gutknecht’s counsel is clear: hire individuals who are closely attuned to your organization and your best people, and their performance will be in sync with your needs, goals and mission. As a result, your performance management won’t require a lot of heavy lifting—i.e., you won’t need to do extensive behavioral and performance modification or costly replacement of these individuals. The performance management you provide will be largely positive and developmental rather than punitive and correctional.

So how do you go about finding people who are closely aligned to your organization and who match up to your best people? For many employers, talent assessment tools are the answer.

There are a multitude of assessment tools available to today’s employers. Gutknecht’s company, for example, conducts Essence MiningTM to uncover the intrinsic nature and key characteristics of an organization and its people. Harrison Assessments and Shadowmatch USA, among others, focus on behavioral tendencies and competencies to predict performance. Still other tools are personality-based.

Finding the right assessment solution for your organization is, of course, a matter of fit. It has to meet your needs and goals but it also has to suit your company culture.

A recent article on the SHRM website, “Testing for Talent: An HR Case Study,” presents an interesting case study of the Barnum Financial Group and its use of an assessment tool to guide its coaching, communications and teamwork initiatives. The article also offers four helpful tips (which we’ve paraphrased below) to anyone searching for the right assessment tool for their organization:

1.     Be precise about what you want to accomplish.

2.     Forge a rough consensus among management about the tool that best fits the culture of your organization.

3.     Complete the assessment yourself to gauge its accuracy.

4.     Keep budget in mind, as you’ll need to make both an initial investment and an ongoing one.

Without question, performance management encompasses all of the activities we engage in after hiring an individual—conducting performance reviews, providing coaching, delivering developmental opportunities, and all the rest. But if we’re wise, we’ll remember that the most effective performance management actually begins before any of these activities take place. It begins with making the right recruiting and hiring decisions.

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To read more about our thoughts on performance management, click here to download our whitepaper, “From Dread to Moving Ahead — Take the Pain Out of Performance Management.”

The Case for More Frequent Performance Reviews

Aubrey Daniels, the clinical psychologist who is often called “the father of performance management,” believes the performance appraisal process is flawed and in need of radical change at many organizations today. The biggest problem, he believes, is that reviews happen too infrequently.

He’s right on both counts.

To drive results-oriented performance, we need to change how we conduct reviews, which we’ve written about previously. Please click the images below to read these posts.

We also need to make frequent, one-on-one meetings with employees the backbone of performance management. But this is exactly the challenge for many of the managers we speak with—they have no idea how to squeeze recurring meetings into their already hectic schedules.

In a Forbes article titled, “The Secret To Effective One-On-One Meetings With Direct Reports,” leadership coach and author Kristi Hedges summarizes some of the key roadblocks that keep managers from actually holding more frequent performance-related discussions with their direct reports. These roadblocks include managers’ uncertainty about how to structure such meetings … how to ensure these meetings are productive … and how to avoid turning them into one-way delegation sessions. Another concern is that these meetings will uncover “simmering conflicts or complaints” that will require significant time and effort to resolve.

All are legitimate concerns. However, Hedges offers managers helpful insights on how to implement and make the most of more frequent one-on-one meetings. Her tips include: create an actual schedule and a structure for these meetings; discuss the employee’s needs and issues as well as your own; and be sure to manage accountabilities.

One of the key aspects of frequent performance-oriented meetings is that they should not be heavy-duty critique sessions. Good people don’t need to be micromanaged. (A recent Business Insider article highlights the dangers of micromanagement, for those interested.) These get-togethers should be more about discussing employees’ needs and concerns—for instance, the things that may be getting in the way of carrying out their day-to-day responsibilities

Employees want and need our assistance to achieve their full potential, and this is precisely where more frequent performance-oriented discussions can help.

Of course, this doesn’t mean your people don’t want to speak with you or hear your feedback on a regular basis. In fact, they do. Research has long shown that employees want clear communication from their managers regarding what’s expected of them (responsibilities), what they’re doing right (recognition), what they’re doing wrong (constructive criticism), and what they need to do to advance their careers (development and career guidance).

When you think about it, the “I don’t have time” argument against more frequent performance meetings doesn’t really hold water. The truth is we can’t afford to not make the time.

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To read more about the power and potential of sound performance management, click here to download our whitepaper, “Bridge the Gap Between Your Performance Reviews and Employee Development—or Both Are Primed To Fail.”

Are You Nurturing Universal Accountability?

If you’re familiar with Reviewsnap you know we’ve enthusiastically championed performance appraisals for nearly 20 years. In our view, performance appraisals are essential to the steady growth and development of your workforce. Handled correctly, appraisals also instill accountability in your people—accountability for reaching specific goals and targets, for developing their knowledge and skill sets, and for proactively advancing their careers.

Accountability.

It’s a core precept of good performance management. It also happens to be one of the distinguishing features of high-performance teams, as highlighted by a May 30 post on the Harvard Business Review blog, “The Best Teams Hold Themselves Accountable.” The author of the post, Joseph Grenny, pulled no punches when offering this succinct observation regarding the teams he’s studied:

·      In the weakest teams, there is no accountability.

·      In mediocre teams, bosses are the source of accountability.

·      In high performance teams, peers manage the vast majority of performance problems with one another.

Although Grenny refers to accountability in relation to performance problems, the best teams not only hold themselves accountable for resolving their differences but their team members also take personal responsibility for improving innovation, responsiveness, customer service and other key performance indicators valued by their companies.

As Grenny points out, the results these teams deliver include greater innovation, trust and productivity. One of the author’s clients, a successful financial services company with superior peer accountability, enjoyed “an unparalleled return on capital, breathtaking sales growth, and the highest customer renewal rate in the industry.”

In his post, Grenny also offers five insightful tips for creating a culture of universal accountability. Two of these tips are setting expectations and calling out positive examples of behaviors you value—two of the most important things your mangers can do when holding performance appraisals with their direct reports.

This brings us to a rather obvious question: if the best teams hold themselves accountable, why do you have to bother with performance reviews and building cultures of accountability? The answer is equally obvious: even if your best teams hold themselves accountable instinctively, your organization should publicly support this quality and make it an official performance objective. Managers should talk about accountability in team meetings and during reviews. It’s the only way to engender accountability in all of your teams, not just your best teams. And that’s the real goal—superior accountability throughout the organization, from top to bottom.

Obviously, your managers will have to go on acting as the source of accountability for many of your teams, at least for a while. But with patience and dedicated guidance, they’ll gradually sow the seeds of greater accountability. In time, they’ll be able to step away from acting as “accountability cops” and do more of what you want them to do—namely, to manage their functions strategically.

Employee Learning and Training—No Retreat, No Surrender!

How much do employers spend on learning and training?

According to the American Society of Training and Development’s 2013 State of the Industry Report, U.S. organizations spent more than $164 billion on employee learning in 2012. (In this case, “learning” encompasses a wide array of educational initiatives including training.)

Training magazine’s 2013 Training Industry Report, on the other hand, offers a narrower focus on training initiatives and the dollars spent. The report indicates that U.S. training expenditures, which totaled $55.4 billion in 2013:

·       increased among large companies (from $11.3 million in 2012 to $17.6 million in 2013);

·       increased very slightly among small companies (from $294,532 in 2012 to $301,082 in 2013);

·       and fell among midsize companies (from $2 million in 2012 to $1.2 million in 2013).

No matter how you slice and dice the definitions or the numbers, it appears that employers’ commitment to training and learning remains strong overall—especially considering the state of the economy during the past few years, the increasing challenge of global competition, and the ongoing turmoil around employers’ healthcare costs, among a host of other ongoing competitive hurdles.

Make no mistake, no matter what our other business challenges are, we need a no-retreat, no-surrender commitment to training and learning for one simple reason: organizations that are dedicated to learning crush their competition.

Bersin by Deloitte’s Corporate Learning Factbook 2013 contains several persuasive proof points based on years of study. They show that organizations with “strong learning cultures:”

·      Are 42% more likely to innovate (i.e., be first to foster ideation and implement change initiatives) than their peers.

·      Are 37% more productive.

·      Are 35% more responsive to customers’ needs.

·      And have a 26% greater capacity to deliver quality products.

It’s hard to ignore numbers like those, which clearly show why our investment in employee learning must be unwavering. Obviously, how we allocate our investment is equally important. The Training magazine report shows that employers’ top three priorities in allocating training resources in 2013 were: 1) increasing the effectiveness of training programs (32%); 2) reducing costs/improving efficiency (20%); and 3) increasing learner usage of training programs (14%).

When it comes to training and learning, our bottom line costs matter. But the greater bottom line is this: if our commitment to learning weakens so will our companies.

Goal Setting Works. But Avoid Those Goals Gone Wild.

Helping employees set achievable performance goals delivers substantial benefits.

Goal setting helps employees prioritize their work and focus their day-to-day efforts effectively. It lets them know exactly what they’ll be measured on (in part) during performance reviews. It can facilitate their communication and interaction with managers. And it shows them how important their personal contributions are to department, functional and overall company targets. In short, it’s astounding how much impact goal setting can have on our bottom line and competitive strength.

Done well, goal setting also is a tremendous tool for motivating our people and fostering greater levels of engagement—especially when managers and employees create goals together and work collaboratively to set expectations.

The Human Resources function at MIT does a great job of reminding us how this is possible. The Performance Development page of its website not only instructs readers on the basics of goal setting but it also shows how to tie goal setting to employee development plans.

One of the truly insightful things MIT offers is a set of best practices for bolstering basic goal-setting strategies. These best practices include (and we’re paraphrasing):

·      Ensure there is alignment among an individual’s goals, her/his actual job responsibilities and the department’s targets. (You’d be surprised how easily these components can slip out of alignment without ongoing attention.)

·      Consider an employee’s needs—not just the department’s needs—when setting goals.

·      Communicate department goals to the entire group as a whole, not just individuals. This helps foster clarity and cohesion among the team.

·      Incorporate special projects, committee assignments and mentoring relationships into goal setting.

·      Once achieved, use goals as stepping-stones to new goals and assignments.

While some of these practices might seem rudimentary to more sophisticated organizations, many small to medium employers will benefit significantly from these suggestions.

Interestingly, there have been a few studies showing how poor and/or overblown goal setting can actually be dangerous. A few years ago, Forbes published an article featuring a report by Wharton operations and a team of researchers titled, “Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting.” Essentially, the bulk of the research showed that “overly ambitious targets” have profoundly negative consequences. Just goes to show you that too much of anything—even a good thing—can be bad.

Bottom line, help your employees set limited, realistic goals … and be sure to avoid those nasty goals gone wild.

Hating on Performance Reviews—and the Old Switcheroo

"Study finds that basically every single person hates performance reviews.”

With a headline like that, it’s no wonder a recent Washington Post article continues to get attention. The problem is it’s not true—not even according to the research the article cites as its

source.

The research was conducted by psychologists at Kansas State University, Eastern Kentucky University and Texas A&M University, who “looked into how people respond to negative feedback they receive in a performance review,” according to the article. It also says the researchers “asked 234 staffers at a large southwestern university to rate their feelings about a performance review they received three months earlier.”

Based on those facts, it’s a little difficult to understand how the Washington Post can justify the headline it ran. Okay, it’s VERY difficult to understand. But we definitely understand why they ran it: it’s a sure-fire attention grabber. It’s like a lot of recent headlines that hate on performance reviews.

Although it seems fairly obvious, we’d like to point out that there’s a significant gap between everyone hating performance reviews and a few statistics showing 234 individuals at one university generally don’t like getting negative feedback during a review (who does?) and some portion also disliking a recent review.

If this research does highlight anything it’s not that everyone despises performance reviews. It’s that many managers continue to do a less than stellar job of conducting reviews. If they truly want to help drive employee performance effectively, managers need to learn to be more constructive, guiding and mentoring—even when they’re providing negative feedback.

The Washington Post article is really just the latest in a long line of articles that pull the old headline switcheroo. Dozens of pundits and bloggers have written headlines like, “It’s Time To Eliminate Performance Reviews,” and then offered advice on how to conduct performance reviews properly. Clearly, it’s a popular attention-getting device.

Even so, performance reviews continue to be a necessary and effective tool for helping our employees grow, develop and even excel. But we need to conduct reviews appropriately and in ways that reinforce our employees’ commitment to doing the best work they can.

To read more about performance review best practices and how to rethink your appraisal process, download our white paper, From Dread to Moving Ahead - Taking the Pain Out of Performance Management.

Performance Measurement Is Not a CYA Activity

Here are a few lines from the recent Forbes article, ‘If You Can't Measure It, You Can't Manage It': Not True, by Liz Ryan:

“Measurement is our drug in the business world, because we believe that by measuring everything and sending the good news upstairs to the C-suite we can ward off the bogeyman of business, namely Getting On the Boss’s Bad Side. Measurement is our favorite CYA activity. It’s an inherently fear-based process, because the reason we measure everything in business is to prove to someone who’s not in the room that we did what they told us to do. … Measurement is our opiate of choice in the business world precisely because it temporarily allays fear all the way up the ladder.”

Yeesh! There’s no mistaking Ms. Ryan’s contempt for much of the measurement being done in today’s business world. My own feelings about measurement—and her opinion of it—aren’t nearly so black and white.

On the one hand, I wholeheartedly agree with the spirit of what she’s written. Measurement as a CYA activity is a colossal waste of time, energy and focus. On the other hand, I completely disagree with the way that she has characterized measurement—especially when I think of it in the context of performance measurement.

• Performance measurement isn’t about CYA. It’s a legitimate and proven way to drive employee performance toward delivering specific outcomes. In this sense, performance measurement is a CYW activity—an ongoing effort to Calibrate Your Work to the evolving goals, targets and strategies of the company.

•  Performance measurement is not about sending good news upstairs to the C-suite. It’s about keeping our leaders honestly informed of the performance of our individuals and teams. Sure, some of the news will be good. But, if we’re doing our jobs well, much of what we report will be about critical skill gaps, talent shortfalls, training and development needs, turnover forecasts—in short, the “bad news” our senior leaders need to proactively manage the business in a truly strategic fashion.

•  Performance measurement is not inherently fear-based for many organizations. It’s a process driven by the need to have our people achieve specific goals and deliver specific outcomes. These goals and outcomes are tied directly to the company’s competitive position and its ongoing success. Savvy employers don’t rely on fear to “motivate” people; they give their workers the feedback, guidance and developmental mentoring that will enable them to excel. Engagement, not fear, is inherent in sound performance measurement.

•  Performance measurement is not an opiate meant to sedate us. Quite the opposite. Performance management is meant to be a wake up call, when necessary—a cold dose of reality that opens our eyes to our own shortcomings and weaknesses. But it’s also meant to keep us aware of everything we’re doing well. We need both sides of the story to build performance-driven, winning cultures. Information is the key, and a great deal of this vital information comes out of the performance measurement process.

Again, I understand and agree with the larger point that Ms. Ryan was making about the business practice of mindlessly “measuring everything.” And I understand that some employers still haven’t gotten everything right when it comes to performance measurement.

But I also believe there’s only one way we’ll all get better at managing and maximizing the performance of our people—by measuring it and then taking action either to support or change it.

Can Performance Reviews Actually Help You Improve Employee Engagement?

The simple answer is yes—if you leverage reviews to develop targeted learning plans for your employees. More on this in a moment …

Gallup’s most recent State of the Global Workplace report is an ongoing study of employee engagement in the workplace, and it contains more than a few striking statistics. Here are two

that hit us like a sledgehammer:

·       Only 13% of employees worldwide are engaged at work.

·       In the United States, 30% of employees are engaged at work.

The good news (if you can call it good) is that our domestic engagement rate tops the global average. But it still leaves a lot to be desired. A stunning 70% of our workforce is either only moderately engaged or outright disengaged from their work.

The Gallup Business Journal website recently published an article titled, “5 Ways To Improve Employee Engagement Now,” which is worth reading. It offers sound insights on how to gather truly accurate engagement data from your own workforce, where to focus your engagement improvement efforts, and why frontline managers are so critical in building and maintaining employee engagement.

Another powerful way to enhance your organization’s engagement levels is to leverage information from performance reviews to help you develop targeted learning plans for each of your employees.

This is an often-overlooked strategy for building engagement because many managers treat performance reviews as a mere formality or a necessary evil. The fact is every performance review is an opportunity—an opportunity for managers to develop and mentor their people, and an opportunity to gather crucial information about the areas in which employees excel and struggle. This information is developmental gold. It should be used as the basis for selecting learning curriculum that will build up strength and close skill gaps.

By developing targeted learning plans for your employees, you openly demonstrate your commitments to them. You actively support their personal and professional growth. And you significantly boost their chances of advancing within the organization.

This won’t go unnoticed by your employees. Indeed, they’ll reward you with their loyalty and a deeper level of engagement.

Mirror, Mirror: Who’s the Fairest in Engagementland?

For those of us prone to mirror-gazing and taking stock at this introspective time of year, here’s something worth pondering: are we really doing what it takes to nurture employee engagement within our companies?

It’s a fair question, especially when you consider the powerful benefits that derive from

superior employee engagement, e.g., enhanced productivity, improved innovation, greater profitability and reduced turnover, to name a few. The media has been filled with stories about these benefits and about the incentives that employers use to raise engagement levels.

But far less has been written about the attributes shared by companies that enjoy superior employee engagement. A notable exception is the Hay Group’s report titled, “What it takes to become a high performing company.”

In addition to highlighting the key attributes of companies with high employee engagement, the report also calls attention to this critical fact: companies boasting high engagement levels also are high-performing companies. They’re industry leaders in terms of their financial performance. “Indeed, these organizations roughly double industry averages on five-year ROA, ROI and ROE,” the authors write.

As the report shows, here are a few of the key attributes shared by high-performing, high-engagement companies:

·      They treat employee development as a priority. “Employees in high performing companies offer more favorable views of their ability to improve their skills in their jobs. As a result, they are more confident about their ability to achieve their career objectives by continuing to work for the company.”

·      They treat employees with great regard. “Those organizations that show a high regard for employees are more likely to find them willing to go above and beyond the formal requirements of their jobs, pour extra effort into their work, and deliver superior performance.”

·      They have leaders who lead. “Good leadership is widely known to make a significant difference to bottom-line performance … High performing companies are viewed as having effective leadership, leaders (whom) employees can trust and have confidence in, and leaders whose actions and behaviors are consistent with company values.”

·      They keep employees aligned with business goals. “High performing companies help employees to feel fully aligned with the organization by ensuring that strategies and goals are clearly communicated to employees and that employees are regularly informed about business plans and results.”

Again, these are just some of the attributes covered in the report, which also offers related statistical data for you digits-driven thinkers.

Clearly, as responsible employers and HR professionals, we need to give these attributes our serious consideration. But for those of us interested in transforming our companies into high-performance dynamos, our consideration isn’t enough. We must actively nurture these attributes in the New Year.

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.