Best approaches to performance management
What do high-performing companies do differently in their performance management practices?
Eubanks, B. (2018) How High-Performing Companies Approach Performance Management [ATD webinar], April 16. Archive available to ATD members at http://webcasts.td.org/webinar/2701.
Lighthouse Research & Advisory (2017) Performance Management Research Findings: Performance management, culture, and business results survey, Lighthouse Research & Advisory.
This company conducted a meta-analysis of previous studies, surveyed over 250 employers, conducted more than 25 interviews, and looked at data from high-performing companies to find out what they do differently.
- High-performing companies were identified in terms of their retention rates, revenue, and employee engagement.
- Engagement increases innovation, productivity, customer satisfaction, retention, and revenue.
- Corporate culture is important, with controlling and competitive cultures less effective and less engaging than collaborative and creative ones.
Here’s what they found:
(Lighthouse Research & Advisory, 2017, p. 7)
Part of a performance management process is behavior modification — reinforcing preferred activities and behaviors. High-performing companies recognize individuals and preferred behaviors. Recognition increases engagement.
“In the moment” manager feedback
Eubanks retells the story about Alan Mulally (former CEO at Ford Motor Co.). In one of Mulally’s first meetings with his senior staff, he asked them to share an area of difficulty in their division. When a manager did so, Mulally asked the others in the meeting to collaboratively tackle the issue and share their ideas about how to fix it. What he didn’t do was provide a negative view of the problem, and thus the managers were encouraged to give and receive feedback.
Eubanks also suggest avoiding the “crap sandwich”, which is sandwiching negative feedback between two positive things, because the person receiving this feedback will only hear the negative comment. Instead, he recommends providing expectations plus assurance, which is generally saying “I know you do good work, and can do better”. With this formula, the person is more likely to try again and to do better.
People should also get feedback “in the moment”. If they only receive feedback near the time of their annual reviews, then that feedback is stale and does not bring about improved performance at the time it’s needed.
Peer feedback should be simple; resist putting complicated 360-degree review processes in place.
With peer feedback, people sometimes wonder whether the person giving the feedback should be anonymous. The problem with anonymity is that the person receiving the feedback may not know how to fix the problem because the anonymity obscures the issue. A better approach is one of confidentiality, so that the person has enough context to act on the issue.
CVS proved to be an interesting case study into peer feedback. They found that people who give more feedback had 170% greater engagement, and so CVS now uses this as a signal for succession. They would like managers who are good at giving feedback, and so when non-managers show they are naturally comfortable providing feedback they are showing one trait CVS seeks for their managers.
Only 7% of the American workforce grow into roles within the same company. A best practice for managers is to spend at least 5 minutes per month (minimum) with each of their employees asking them about their career goals and how the manager can help the worker achieve those goals. This is an employee-driven discussion.
Hootsuite is an interesting case study for development coaching. They put in place a cross-training program. For 90 days, a worker spends 1 day a week in a different department. Their manager agrees to reduce the worker’s job duties to accommodate this, and they put together a learning plan identifying what skills the worker needs to learn and bring back to the team. The manager in the new department also puts together a learning plan, identifying the skills they’d like the individual to share with their team. After 90 days, the person is given the choice to return to their old job or to stay in a hybrid position.
Focus on strengths
Focus on people’s strengths instead of their weaknesses. Develop in people what they are good at.
Credit Suisse is an innovative company, and one innovative solution they have for building on people’s strengths is their “Internals First” program. Their in-house recruiters recruit current employees for other positions within the company, starting with a phone call (just like they do with external candidates). They discuss the person’s strengths and then leverage it in other areas of the company.
About Hootsuite’s cross-training program: https://www.fastcompany.com/3063091/why-i-started-training-employees-to-leave-their-jobs and https://www.linkedin.com/pulse/unexpected-way-stop-people-from-quitting-ryan-holmes/
Book recommendation: The Best Team Wins.