Tag Archive for: performance
In my last article, I gave a run-down of three talent management trends that I thought would be particularly influential in the new year. Though I briefly summed up my thoughts on each one, I’d now like to go in-depth on performance management (PM).
Across public, private, and government sectors, elite organisations share a common understanding: performance management is what fosters employee excellence. It’s what makes a good organisation into a great organisation.
So, needless to say, I think it’s worth doing a deep-dive when it comes to the study of performance management. Which is where an important article, “The Impact of Performance Management on Performance in Public Organisations: A Meta-Analysis,” comes in. Published in the Public Administration Review by Ed Gerrish, Ph.D., it offers us some valuable insights into separating the wheat from the chaff when it comes to maximising effectiveness of PM processes.
Dr. Gerrish saved us a lot of reading by reviewing 49 studies of performance management and synthesising the results with what’s known as a “meta-analysis.” His findings are conclusive and critical to any successful organisation: the efficacy of PM is entirely dependent on the system used to institute it.
Keys to success in performance management
1. Simply measuring isn’t enough
Don’t just measure performance. Treat your data as actionable intelligence. We’ve all been involved with stagnated organisations that simply “go through the motions.” They usually don’t last very long. In the case of PM, this might mean tracking performance, but only taking superficial measures to correct problems. That’s not going to cut it. Measuring performance without managing performance has a negligible effect.
Performance measurement works best when integrated with best practices and strong organisational culture. Important steps include clear – and clearly stated – goals, using performance data as a basis for strategic planning, and incentivising strong performance. Gerrish’s meta-analysis shows just how important best practices are when it comes to PM: organisations tying those best practices into PM are up to three times more effective than “average” PM systems.
2. Benchmark your way to success
One technique that the analysis shows to be quite effective is benchmarking – comparing performance to industry leaders and ensuring year-over-year improvement. I’ve long been a believer in benchmarking, and have seen employees, teams, or entire departments re-energised when given a clearly stated goal. It’s also a clear way to identify both high-performers and underachievers – a logical starting point in performance management.
With an appropriate frame of reference, outstanding employees can be properly acknowledged and rewarded and under-performers can be correctively trained to improve their performance. On a larger scale, departmental budgets or autonomy can be tied directly to clear benchmarks so that teams know exactly what is expected of them.
One example of where benchmarking works as a determinant of budgeting is in local government. A comprehensive study of over 300 county and city governments in the US found that the “greatest applicability” of PM through benchmarking is during budget development.
3. Survival of the fittest PM
Organizations are subject to the same Darwinian laws as living organisms. As a result, they are constantly adapting to survive and thrive in their environment. Performance management systems are one of the most important tools an organization can use to survive change. This is why “Second-generation” PM systems, defined by Gerrish as those which have been in place for longer than two years and are significantly different from their first-generation predecessor, can make or break an organization.
The most effective second-generation PM systems are those that do more than pick low-hanging fruits. A key to success is thinking proactively. It’s easier to build a fireproof house than put out a fire. For instance, if an organization recognizes that a department is underperforming, it’s not enough to cut funding. A first gen PM system might recognize a problem. That’s good. But a second gen PM system should both recognize, react to, and safeguard against future problems.
Xerox, the American copier manufacturer, saw its stock plummet from $70 to $5 a share within 18 months at the turn of the century. Looking overseas at Japanese competitors, Xerox found that their product took twice as long to produce and at three times the cost. With the help of an outside consulting firm, Xerox was able to make real structural changes that have sustained them in the 21st century like just-in-time inventory, quality control improvements, and emphasis on leadership training.
Using PM systems and benchmarking, Xerox identified the areas they were failing in. As an established firm, Xerox certainly had second gen PM systems. These systems were then used as a launching point to react to shortcomings and make strategic decisions that would prevent the organization from repeating its mistakes.
The right way to manage performance
Be mindful of the following steps to keep your organisation on track:
- Remember that measuring is only the first step – there’s no benefit to gathering data if it doesn’t lead to action. A strong management team will use performance measurement to start moving in the right direction. Your stakeholders want results, not a case study.
- Put everyone on the same page with benchmarking – it’s easier to communicate when everyone is speaking the same language and understands where they stand in comparison to their peers. Differentiate high- and low-performers and make corrections accordingly.
- Be aware that PM systems change with time – identify ways that your second-generation PM system is different. Did you make necessary and proactive changes or just react to immediate problems by picking low-hanging fruit?
- Step outside of your organisation for a new perspective – there’s more than one way to skin a cat. Oftentimes solutions can come from an entirely different field or industry. Don’t fall into the trap of “this is how we do it because this is how we’ve always done it.”
If you’re a leader hoping to spur change in your organisation measuring and benchmarking can be effective tools, but they’re powerless until you’re ready to follow them up with necessary heavy lifting. Put data to work for you, don’t be afraid to see how you stack up to the competition, and don’t be reactive. Be proactive.
Performance Management can be hard without systems and experience. Let us help.
You might not have heard of the term ‘Highly Sensitive Person’ before, but I’m willing to bet it conjures up a face or two. According to Dr Elaine Aron, who coined the phrase back in the 1990s, nearly 20% of us fall within this bracket1. Which means most offices have at least one hypersensitive person.
Creative, with a high attention to detail that often equates to exceptional performance, highly sensitive people can be incredibly useful. At the other end of the scale are less productive behaviours, traits many leaders struggle to manage – especially when it comes to feedback and performance conversations.
Hypersensitive people are especially receptive to social, emotional and physical stimuli. This group typically become overwhelmed during busy periods, don’t respond well to sudden changes, worry excessively and display emotional behaviours less sensitive people may consider extreme. These reactions make addressing shortfalls in performance problematic, which is why leaders must learn how to deliver constructive feedback to hypersensitive individuals.
Acknowledge Social Bias
The reactions of highly sensitive people are often considered inappropriate in the modern workplace. Excessive displays of emotion can be viewed negatively, while a tendency to become flustered under pressure, avoidance of stressful situations and an inability to cope with changing demands are often viewed as incompetencies.
When preparing for a discussion with a hypersensitive person, acknowledge your bias towards their behaviour. Does their emotional reaction make you uncomfortable? Are you exasperated by particular reactions? Hypersensitives are very aware of body language and tone, understanding your response and staying objective is essential for keeping any conversation on track and avoiding misunderstandings.
Adopt Agile Performance Management
Frequent readers will know, I’m a big advocate of Agile Performance Management (APM). Regular feedback means this system delivers tangible benefits to productivity and engagement.
For highly sensitive people, it also offers a raft of other advantages. These guys actively avoid situations that make them feel uncomfortable, and an annual performance review could mean weeks of stress and worry.
By meeting regularly for informal one-to-ones, leaders create a less intimidating environment. Setting goals and keeping the conversation forward-focused puts less emphasis on feedback that could be construed as criticism and reduces the chance of an overly emotional or defensive reaction.
Potentially inflammatory conversations with highly sensitive people can be avoided with forward planning. Schedule any meeting well in advance. This allows you to reduce the threat of the situation as much as possible and gives a sensitive individual the chance to prepare (a valuable coping mechanism for many hypersensitives).
Highly sensitive individuals have strong emotional reactions2 and can become defensive when criticised (or when faced with perceived criticism)3. Using empathy in your statements and speaking in a low voice can go a long way to avoiding confrontation4. Remember, a feedback conversation is not a trial. Don’t go over evidence or allow for counter arguments. Simply state the feedback relating to a specific expectation and focus on strategies for success in the future.
Take Control of the Conversation
Every performance discussion should focus on moving forward and the necessary actions needed to achieve success. For highly sensitive people, who are typically very invested in their work, this reduces the threat of criticism and keeps them motivated.
If you find yourself drawn into a disagreement, then be mindful of your reactions. Hypersensitives are quick to pick up on body language. Listen calmly, keep your voice low and avoid ambiguous language, or statements that can be misinterpreted, as much as you can. If you can’t get a highly sensitive person to agree to your feedback, get their agreement on the outcome and future goals instead.
To sum up…
While managing hypersensitive people often requires more thought and consideration from leaders, it is important to note that these individuals should always be held to the same standards as their colleagues. Failing to address performance issues for fear of causing a scene or upsetting one individual will have a negative impact on engagement and productivity throughout their team.
A highly sensitive person who is unable to meet expectations or consistently performs poorly must be managed appropriately, and should not remain in a position they are unsuitable for purely because they are hypersensitive.
What are your experiences with hypersensitivity in the workplace? I’d love to hear your thoughts on managing this unique group.
1Ramsay, 2014. Highly sensitive people in the workplace: from shame to fame. HRZone
2Lawrence, 2013. Are you a highly sensitive person. HRZone.
3Aron, 2007. A meditation for HSP on criticism: the killer. Elaine Aron.
4Thibodeaux, Not dated. How to deal with an overly sensitive person in the workplace. Small Business.
Terms such as KRA, KPI and OKR are thrown around pretty frequently in the business world. Many organisations use them as measures of success; basing bonus, promotion or grades of pay on the progress (or lack of) that staff make towards these goals. But what is the best set of performance metrics designed to unify the workforce and drive your organisation forward?
We need to understand exactly what these measurement approaches can achieve if we’re going to use them as more than just workforce yardsticks.
Key Result Area (KRA)
These are critical success factors: actions that are necessary to achieve a specific objective. Ideally, everyone within an organisation is assigned KRAs specific to their team, department or other workgroup, so they know exactly which actions they must take to realise strategic goals and ensure future success.
Teams that use KRAs have been shown to be proactive, rather than reactive, simply because they make a point of consciously identifying the areas where their efforts make a difference long-term.
By defining expectations and providing clarity, employees know exactly why they’re there and what they’re doing. Individuals understand why some KRAs take precedence over others and have the knowledge to effectively prioritise their workload.
In fact, the KRA-centric appraisal system of Simbawli Sugar Ltd., one of the biggest mills in Northern India, has had a significant influence on employee engagement (an issue I tackled a little closer to home in this post). Senior staff credit the KRA approach with focusing employees on outcomes, improving competencies and increasing accountability.
There are a couple of downsides to KRAs, namely finding metrics that are easy to measure. Setting individuals objectives also poses a problem, since it only captures around 80% of a department’s workload (the rest falls in areas of shared responsibility).
When would you use it?
This system works well for organisations with multi-skilled teams and high numbers of experienced staff. Everyone understands the vision and their role in achieving it, so using KRAs negates the need for micromanagement and daily check-ins.
Objectives and Key Results (OKR)
Objectives and key results are a favourite of the tech industry (see my recent performance management post). They were designed to challenge individuals and are comprised of one objective and multiple quantifiable key result measures. Progress indicators for these measures are scaled by either 0-1 or 0-100% and are regularly updated. A good OKR should be pretty hard to nail, so they’re considered complete when progress exceeds 75% or 0.75. If you hit 100%, your OKRs are far too easy.
Google loves this one; Rick Klau even credits it with helping to keep the company on track and moving forward. That’s because OKRs provide clarity, every person in the organisation knows what is expected of them and why, and everyone’s OKRs work together to drive the business forward.
The defining factor about OKRs is that they are transparent. Employees can see what colleagues are working on, their progress on current targets and how well they performed previously. This is also true at Google, where even Larry Page’s objectives and progress are available for all to see.
They’re also pretty adaptable. Google sets an annual flexible OKR supported by quarterly objectives that are set-in-stone. Of course, you can opt for biannual or monthly targets: it’s really about what works for your business.
The main disadvantage of OKRs lies with managers, specifically their goal-setting ability (if you’re not sure exactly how to set worthwhile, actionable goals, take a look at the Cognology guide to writing SMART objectives).
When it comes to OKRs, managers must have a realistic understanding of employees’ roles, skills, and resources. Otherwise they risk setting unachievable goals that demoralise their workforce.
In contrast, the ‘nice guys’ set a couple of easy and one difficult objective because they don’t like to see employees scoring 0.6 (remember, OKRs are meant to be challenging. Google sets targets of 0.6-0.7).
When would you use it?
OKRs are particularly well suited to start-ups and those operating in capricious markets. Quarterly or bimonthly objectives provide staff with a sense of purpose and direction but are flexible enough to adapt to a changeable long-term vision.
Key Performance Indicators (KPIs)
KPIs are probably the best known performance metric. Of course they vary between companies and industries, but KPIs are frequently used to analyse factors that are crucial to the success of an organisation. They exist at both operational and staff appraisal levels, with employee KPIs supporting operational KPIs.
Used to help manage both KRAs and OKRs, employee KPIs measure of primary responsibilities. Consisting of a timeframe, a target, and a benchmark, KPIs focus on results, opposed to activities. They are milestones designed to help individuals, and their managers, gauge whether their performance is on track.
Like all appraisal systems, KPIs allow organisations to measure progress towards a strategic goal. They require discussion on how they will be measured before they’re converted into a benchmark, so are more likely to be realistic and attainable than OKRs.
Unlike KRAs, they can be team-wide, with whole departments monitoring and addressing issues associated with the success rate of an indicator. They’re also great for turning prospects into clients since the metrics tend to go hand-in-hand with performance data and often provide actionable insight.
Pfizer, a pharmaceutical Goliath, relies heavily on KPIs at both an operational and corporate level. And it makes good use of them when it comes to boosting brand trust, publicising KPIs of public concern, such as carbon emissions.
No matter how you tackle it, measuring KPIs can be a time-consuming process. Pfizer might love them for the insight they offer when it comes to identifying strengths and weaknesses in its global empire, but those insights come at the cost of data collection and analysis, internal audits, facility self-assessments, and management system reviews.
Which leads us to the next point: KPIs can be expensive. They’re also pretty limited since they are restricted to variables that can be measured (employee engagement, for example, is difficult to quantify). Plus they’re inflexible – changing a KPI can potentially mean disregarding years of comparative data.
When would you use it?
KPIs are an excellent way to measure performance and profitability metrics. They work particularly well in organisations that have multiple uses for performance data and can justify the time and expense of monitoring it.
These appraisal systems each ensure employees are working towards a common goal; the best even include individuals in the attainment of that goal. Each has weaknesses, but they are not insurmountable – it’s all about what works best for your organization. Choosing the correct performance management system requires a keen vision, long term goals and an understanding of the resources and skills available to your staff.