The Promise of Performance Management

The business process of performance management (PM) often seems like an isolated room within the “human capital” house (see figure below). The walls around the room appear opaque, with little visibility or clarity provided to a workforce that wants to understand what informs the performance management process and how the process aligns with other dimensions of one’s career.

HC House

Indeed, performance management continues to be one of the most disheartening and unfulfilling components of the people function. In a recent report from the Institute for Corporate Productivity, Performance Management: Still Waiting for Real Change, “seven out of ten respondents believed that their organization’s PM process is not managed well, and that it does not have a positive effect on performance”. Other findings find it highly administrative, archaic and outdated. According to Bersin by Deloitte’s 2015 Global Human Capital Trends, “performance management is being reinvented for a new, forward looking purpose: to serve as an efficient, focused business process that improves employee engagement and drives business results.” In the minority of organizations that get it right, performance management is a tremendous, value-rich component of the business and a catalyst for accelerated performance and growth. So how can we tear down the walls and connect this tremendously important discipline to the rest of the human capital framework?

Differentiating “performance”

One simple answer is to utilize the PM process to truly recognize superior performers. Rather than simply yielding to an annual, cascaded budgeting exercise that lands on a relatively meaningless and discouraging merit increase range of 2.4% to 3.0% for everyone, we can use thoughtful evaluations completed by conscientious managers. Those managers would assess performance against clear, strategically aligned goals and behavioral competency guideposts to create a wider dispersion among lower and higher performers (e.g. 0% to 5.0%). Similarly, we can annually examine and market test those pivotal or highly valued roles, as defined by our workforce planning process, and adjust salaries accordingly to better price those positions with more market or strategic value. Such a change will better integrate Performance Management with Engagement and Retention (see framework below) and establish more of a meritocracy-based culture. 

Recognizing “potential”

Many organizations have moved away from forced rankings and, instead, have shifted to talent reviews. In this setting, leaders from all functions meet to identify those 20-25% of the workers, across the entire business, which have earned performance-based, discretionary bonuses. Why not use that same process to document and engage those individuals who have demonstrated the “potential” to move into new or emerging roles across the company? Then you can supplement annual review discussions with meaningful dialogue about career aspirations and alternative career ladders. Whether you call this exercise succession management or career planning, the benefit to the employee is that the evaluation is about performance AND about the performer. This extended focus on “potential” better links Performance Management to Succession Management and increases the possibility that valued members of your team will more actively and creatively consider career journeys they can have inside the company.



Bridging performance gaps with learning experiences

Regretfully, there is very little correlation between the performance gap(s) of an individual contributor in one year and the learning path that is designed for that individual in the coming year. The emergence of new learning technologies, social learning, and other modes of development have enabled talent to access more creative avenues for bridging performance gaps, yet this areas remains an underutilized strategy. Exploiting such options will better link Performance Management to Learning and Development and empower our workers to utilize training in its most optimal context – immediate, tied to a specific learning gap, and learner driven.

Articulating your performance culture

How consistent is the employee value proposition you present to a recruiting candidate with the actual Performance Management experience the person witnesses as a new hire? So often candidates are brought into an organization with a misunderstood picture of their earning potential or short-term promotion and leadership opportunities. The first performance review process feels disconnected from the unlimited possibilities shared only months earlier, and the employee is left feeling disillusioned and burned. Clearly discussing the organization’s approach to Performance Management will better link this importance discipline to Talent Acquisition by managing expectations and reducing unwanted attrition.

A company’s Performance Management process is not an uninvited houseguest, left to revel in paper forms and impersonal compliance-based assessments; rather, it is an essential part of the HR family with a rich source of date about how, why, and when employees perform their job. Such insight can fuel the engine of a well functioning talent management practice.

It only takes one bad apple. Or any fruit, for that matter.

Most employers spend countless hours and resources working hard to engage with employees, motivating them to produce at higher levels and actively pursue their career goals. Companies are well aware that a disengaged, disgruntled employee can affect productivity and overall morale. As the old adage says (and research certainly confirms), one bad apple can often spoil the bunch. But what if the unmotivated resource is NOT an employee at all, but instead a contractor or a formal volunteer or a temp or even a robot. In other words, what if the bad apple is not an apple at all, but a banana. What THEN is the risk?

Compelling research* recently completed in a joint study by ERE Media and Staffing Industry Analysts (SIA) points to the fact that organizations across the board invest considerably less effort in the motivation and engagement of their non-full time workers than they do in their full-time workforce. In one statistic, “while 51% of organizations make a very big or big effort to motivate and/or engage workers, levels of engagement for non-employees are much lower, varying from a high of 16% for business partners to 4% for online freelancers. “ These numbers do begin to improve a little bit with very large companies (50,000+ employees), companies that are facing severe productivity challenges, and companies trying to better manage a global workforce. The difference, however, is still compelling.

Risks associated with such a limited commitment to a clearly growing segment of the total workforce are significant. While most customers never really know for sure whether an individual representing a company is a full time employee, that individual does carry the reputation and the brand image of the organization in his/her hand. And since the percentage of non-full time employees in companies (e.g. partners, contractors, temps, formal volunteers, robots, outsourced services, franchisees) has grown to 16% as the median, and north of 40% in many organizations, we can begin to appreciate the collective risk of so many neglected workers, whatever their profile.

A few years ago, Lighthouse Consulting wrote a white paper about the need to engage alternative segments of the workforce in different ways, based on the unique profile and drivers associated with each segment. That article, entitled Engagement Agility, is accessible in the Thought Leadership section of this website.

A common objection to the argument for funding engagement initiatives for non-employees relates to the traditionally lower ROI recognized by these segments of the workforce. But wouldn’t funding these initiatives create a more loyal part timer less likely to move on and more committed and dedicated to the job? Additionally, if the proportion of the workforce commanded by these segments continues to increase, wouldn’t the risk of disregarding these contributors become collectively higher and, arguably, begin to erode the ROI and perhaps the retention of the employees with whom these people work on teams and on projects? Finally, why would any company that has strategically chosen to deploy these resources want to make a relatively low ROI any lower? In contrast, the opportunity now exists for companies to differentiate their value population by rethinking the ROI of a flexible workforce and building added value by optimizing their productive output.

This noteworthy research on Total Talent Management (TTM) should light a fire on the agenda of all Talent Leaders who are looking to build a fully engaged workforce capable of driving a collective culture of productivity and innovation. As the workforces of all companies across all sectors become increasingly heterogeneous in nature, Talent Leaders must actively seek their discretionary effort and loyalty in ways that resemble the investments in their more traditional employee base.

* Total Talent Management: Towards an Integrated Strategy for the Employed and Non-Employed Workforce. May 7, 2015

Effective Listening: How Experience and Technology (ET) can make us listen like aliens in the workplace.

The first communications course I took as a new sales hire for a forest products company introduced the skill of effective listening. I remember learning that good communicators listen for facts, feelings and emphasis. The facts represent the content, the data, the information. The feelings capture the way the message is transmitted … the tone and volume of the voice and the facial expression. Finally, emphasis defines where the passion lies, as depicted by energy, posture, eye contact and inflection. I learned that effective salespeople and, several years later, effective consultants, must actively listen for all three.

Effective listening is arguably the most difficult communication skill, as compared to presenting or questioning or negotiating. Two of the barriers that impede our use of this skill are the experience we have gained and the technologies we use in our professional journeys. Rather than tools that advance our listening competence, they have become obstacles. Our growth and fulfillment in the workplace depends upon our recognition of these challenges and our commitment to addressing them.

How can years of experience impede your ability to listen? Certainly, over each of our “storied” careers, we have built up biases around how we interpret the world and how we respond to varied points of view, word choices, expressions and presentation styles. These biases are limited and only marginally impactful in the early years of our career. Biases become more substantial and less flexible, however, as we mature and continue to use them to rationalize the judgments we make. Similarly, and somewhat related, are the “verbal patterns” of thinking that build up in our mind and, regrettably, become the organizing framework (and sometimes the receptacle) for much of what we hear every day. How often do we mentally finish and ultimately judge someone’s comments regarding a recommendation or a point of view because it begins to sound exactly like what so many others believe? As professionals and as continuous learners, we must resist any attempt to profile incoming ideas. Certainly, our experience can advance the conversation and build on new insights. But we must listen with the assumption that any idea, from top to bottom, reflects fresh thinking and unique perspective so that we can incorporate our experience in the most optimal way and collaboratively create new insight. By exercising patience, putting aside our biases and listening carefully with no assumed verbal pattern in mind, we can relish the merit of new ideas and the feelings behind them.

And what about technology? How in the world can digital technology and hand-held devices impede our listening skills? Well, for starters, let’s go back to our opening comment about listening for facts, feelings and emphasis. While smartphones and tablets, Twitter and Facebook, and dozens of business applications (e.g. travel sites, uber) have dramatically revolutionized our business day experience in so many positive ways, technology has had a catastrophic effect on the listening process of business leaders, many of whom once prided themselves on being engaged listeners. Contemporary listeners often do not “hear” the specific content in the message, because they are actively and often discreetly multi-tasking. Their ears are trying to catch the message, while their eyes are tracking texts or apps on their phone. Many listeners have no clue how a communicator feels about the message being conveyed, because there was probably limited eye contact, and the listener had only enough bandwidth to capture the words, not the feelings, much less the emotions, behind the message. So often the story behind the communication is abandoned, and the verbage sits on its own island, void of the empathy and context upon which it depends.

As if poor listening “costs” related to existing biases and our on-line mentality aren’t high enough, imagine the additional switching costs incurred when we attempt to go back and forth between these elements. Have you ever tried listening to a complicated business situation, then looked down at a long-awaited text or email, and then attempted to reconnect to the story with the SAME level of empathy and insight? These transitions carry an economic burden and, of course, bear a personal cost on the team members who look to our leadership.

While this article sheds light on societal norms widely known, it hopefully presents a candid view of two very real, yet very manageable, barriers in our professional communication. I

own a huge yellow lab whose name is Bubba, and when I ask Bubba if he wants to go to the park, I am met with a reaction that demonstrates the truest form of effective listening. His head jerks up, and he stares at me with complete engagement, eyes bulging out of their sockets and staring at me like lasers. I have his complete attention. Bubba has a great deal of experience with this oft-repeated question, but his reaction is always enthusiastic and reflects no internal bias … and he never finishes my sentence. There is no multi-tasking or technology, because Bubba turns off his smartphone when I speak to him. Now while we may all be a little too busy to always “listen like a lab”, are we giving those who speak to us our complete attention? I do think we have room in our day to listen respectfully and wholeheartedly to what our colleagues are saying to us. No one will perfect this skill, but pursuing excellence will help us each learn and grow. Over time, we can begin to listen less like an alien, and more like a human.