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Execute Great Performance Management

Building Blocks of Great Performance Management: 3 Common Goals

Before we hit that reboot button on our performance management programs, let’s be absolutely clear on what performance management actually is, and why we should be doing it. As diverse as organizations are (and as diverse as their PM solutions should be) it is helpful to anchor our thinking within a basic framework. This framework represents the universal outcomes of strong performance programs— outcomes that I’ve come to recognize as indicators of great organizational performance. Think of these three interrelated goals as the essence of all performance programs and the basis from which each organization’s unique differences evolve. More simply, consider them the fundamental building blocks for the design project ahead of you.

In my experience, every high performing organization is ultimately using its performance management program to:

  1. Develop people’s skills and capabilities
  2. Reward all employees equitably
  3. Drive overall organizational performance

How these goals are prioritized or emphasized—what “good” looks like related to each goal—will differ from organization to organization. So too will the way each organization sets about making those goals a reality. But any high-performing organization will have some combination of these three ingredients in its performance management recipe.

Now let’s get familiar with our ingredients.

Goal #1: Develop People

It seems obvious that the development of employees should be a key outcome of any performance solution. After all, isn’t that what performance reviews and career discussions are all about? Well, yes, they should be. But as we discussed earlier, this objective is often the one that loses out. And things get especially muddled when we get hung up on our rewards and ratings processes. As they say, the road to hell is paved with good intentions.

So let’s think about what a strong performance management solution that’s truly focused on developing people might look like. First, it should provide in-the-moment coaching, helping individuals to understand what went well and what could be enhanced the next time around. We all know this intuitively, but many of us are so used to stockpiling this feedback for the annual review that we don’t do this for our employees. Further, in-the-moment coaching provides suggestions to support their growth in an environment that allows them to absorb this feedback without feeling threatened or having something at risk (like their pay raise).

Next, individuals should have information at their disposal that provides insight into what is expected in their current role and any future roles to which they hope to advance. Resources for development might include mentors or coaches who are their advocates within the organization. There should also be self-assessment and training tools that would link to their development plan, providing ideas and resources to support their unique goals.

Goal #2: Reward Equitably

First, let’s be clear on what the word really means. ‘Equitable’ is defined by the Oxford Dictionary as ‘fair and impartial.’ It’s important to note that ‘equally’ and ‘equitably’ are not the same thing. For example, let’s say you worked for three weeks writing a strategy for a new business unit, and your peer had proofread it and tuned it up for you. I’d sure hope you’d want your peer to receive some recognition for her support, but I doubt you’d be happy if her reward and recognition was equal to yours. Instead, you’d want the recognition to be equitable, meaning each of you would get as much credit as you deserve.

When organizations speak of differentiated pay and rewards, they are looking for those rewards to be distributed in an equitable manner—fairly, unbiased, and consistent with the level of contribution or impact. It’s also important to note that rewarding equitably is not just about pay. We’re talking about total rewards: compensation, formal and informal recognition, benefits, promotions, project assignments, you name it.

It’s also important to remember that, from an employee’s perspective, equity is all about fairness. While extrinsic rewards are rarely a driver of human behavior, the belief that a system is unfair or biased is a significant driver for dissatisfaction. In other words, confidence that the system is equitable makes for happy and engaged employees. In order to achieve that sense of fairness, you need to get a clear view of what reward equitably means to your organization and how you can best achieve that goal in your unique environment.

Goal #3: Drive Organizational Performance

There’s been plenty of research that has demonstrated the correlation between an employee’s connectedness to the mission and vision of his or her company and the measurable performance of that organization. We now understand how important it is to assure that teams and individuals are fully aligned to the goals of the company.

I’m talking about individuals and teams feeling an emotional connection to the purpose of the organization. That means they understand the vision, they believe in it, they want to be a part of it, and they see how their work and roles contribute to the broader goal. Remember, however, that this connection must also translate into a framework that helps each employee make good decisions and focus on the right work, day in and day out.

Driving organizational performance might sound like it has more to do with the organization than the employee, but it doesn’t. Sure, organizations want their teams and employees aligned, doing the right work, and not wasting time on efforts that are off-strategy. But we have to recognize that, as humans, we also crave the feeling of being a part of something. Most people want to feel like the work they are doing is important and purposeful. This connectedness is a vital part of an employee’s career satisfaction and overall performance, and considering that career satisfaction is of value to both the organization and the individual, we must find ways to make sure it happens.

As I’ve said, each organization is unique, with differing levels of maturity, mixtures of employee demographics, and diverse cultures and values. You will—and should—interpret and emphasize the Three Common Goals in a way that makes the most sense for you and your strategic goals. But make sure you think long and hard about each as you’re building your new solution. Ignore these important building blocks at your peril!

For more information on how to accurately measure key business objectives like performance, check out Achievers’ eBook Four Places to Start Measuring What Matters.

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About the Author
Tamra Chandler
Tamra Chandler is a bona fide people maven. She’s spent the majority of her career thinking about people, researching how they’re motivated, and developing new and effective ways for organizations to achieve the ultimate win-win: inspired people driving inspiring performance. She’s also the CEO and co-founder of PeopleFirm, one of Washington State’s fastest-growing businesses and most successful women-owned firms. An award-winning leader in her field (she’s been recognized by Consulting Magazine twice as one of the top consultants in the U.S.), she is the author of How Performance Management is Killing Performance — and What to Do About It.

 

 

 

 

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Your Performance Management Is Not Fine: Defending Against the Naysayers

One busy Friday, I met with a West Coast client in the morning and then returned to my office to take a call from one of my East Coast clients in the afternoon. In the span of a few scant hours, both of my clients used the exact same phrase to describe their current performance management programs: “Our performance management program is fine.”

All weekend that phrase was stuck in my brain like an annoying popcorn hull wedged between my teeth. I pondered what those words meant to each of them and what ugly truths might lurk beneath an innocuous word like “fine.” I think that phrase spoke loudly to me because I’d heard it so many times before.

So, what do people mean when they tell me that their performance program is fine? Perhaps it’s this:

Performance Management FINE Chart

The low expectations expressed in the phrase “Our performance management is fine” are indicative of how much we’ve lost sight of our people. We seem perfectly happy to settle for “fine” on their behalf. But if our intentions for investing in performance management are to connect our teams to our strategies and goals, to recognize outstanding contributions, and to enhance the development of each individual’s capabilities, how can we possibly continue to tolerate “fine”?

If you’re reading this post, chances are you’re someone who is already at least partially on board with the idea of rebooting your performance management. But no matter how comfortable you are with the idea of throwing everything out to start over (or not – after all, I’m advocating a custom approach that’s tailored to the needs of your business, and yours might not need a thorough overhaul), one of the biggest stumbling blocks you’re likely to encounter is doubt, skepticism, and downright antagonism from the old schoolers in your organization.

When I have a debate with someone who is defending the traditional performance management approach or with someone who is fearful of making changes to such a deeply rooted process (and trust me, I have many such debates), I always hear the same counterarguments. So much so, in fact, that it’s worthwhile to prepare you to answer those same objections in your own organization. Do any of the phrases below sound familiar?

“My boss will never buy it.”

It is always wise to pay special attention to “the boss.” Engage, educate, and bring him or her with you. Of course, you can’t expect this to happen overnight, especially if the boss in question leans more toward the PM traditionalist mind-set. Meet leaders where they are, build a plan, pace your progress, and maintain your resolve. Find out what they really care about, then connect your case to that theme. Be diplomatic and creative, and make sure they understand the real costs (both soft and hard costs) to your business of continuing with the old way — in terms they understand.

“We can’t trust our managers.”

Other than getting leaders on board, this is the second most common concern I hear from people, and it’s a legitimate one. Since I’m advocating implementing a design that relies heavily on good, or preferably great, managers, this problem often stops teams in their tracks. It’s not a simple issue, either. It’s cluttered with questions of structure, role definition, and manager expectations. Many organizations suffer from being over-managed and under-led. This happens because we often promote managers for technical or functional expertise and not for their people or managerial skills, and because most organizations have historically underinvested in building great leaders.

If this resonates with you, I’d encourage you to use it as motivation to address the bigger problem (i.e., the fact that you don’t trust your managers). Start by peeling your own onion to get at the root of your manager concern. Do you have too many managers or too many levels? Are they not the right people? Are their goals out of alignment with what’s valued by your organization as a whole? I’m not saying that these issues can be fixed quickly or easily; in fact, this may create a completely new agenda item for you. But the fact that you don’t trust the capability of your managers has much more far-reaching consequences than its impact on your performance management. It’s something that you’re going to need to address, no matter what.

“Legal will have a fit!”

We know we need a paper trail to document behavior and performance problems, and we think our annual review cycle does that for us. Too often, though, it doesn’t. We’re human: we tend to rate people too leniently, and to downplay or completely gloss over potentially awkward issues. This is one reason why the reviews of underperformers and good performers often read very much the same. The problem then is that if a legal issue does arise, or we simply want to take action in response to an employee’s behavior or performance, we’re caught in a bind between what we really know about that employee’s history and a series of reviews that don’t appear all that bad. This can lead to a messy situation. It’s better to avoid this potential pitfall by documenting issues as they arise. Then the issues will be fresh and more accurately recorded—giving you better legal footing and a more actionable position overall.

“Why change? Everyone else does it this way!”

While the majority of organizations still use a traditional system, the tide is definitely turning. Today we’re seeing respected and forward-thinking organizations trying to drive organizational performance, develop people, and reward equitably in new and innovative ways. These pioneers have received significant positive exposure for their innovative programs. And that attention certainly doesn’t hurt their employer brand (a measure of how positively prospective employees view you compared with your competitors). You have a decision to make here: Are you ready to be out front, or would you prefer to wait until your competition has passed you by before you take action?

Maybe you have to wait because you feel you have bigger issues to tackle. Or maybe you’re simply going to procrastinate until you’re finally dragged kicking and screaming into the new world of performance management at some point in the future. But like it or not, the world is changing, and our old accepted practices will eventually crumble under the weight of the research and the evolving expectations of our employees.

Lead or follow—the choice is yours.

If you want to learn more about performance management, join me at Achievers Customer Experience (ACE) 2017 September 12-13 where I will be speaking on How Performance Management Is Killing Performance – And What to Do About It. Check out details of my speaking session and the event here.

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About the Author
Tamra Chandler
M. Tamra Chandler is a bona fide people maven. She’s spent the majority of her career thinking about people, researching how they’re motivated, and developing new and effective ways for organizations to achieve the ultimate win-win: inspired people driving inspiring performance. She’s also the CEO and co-founder of PeopleFirm, one of Washington State’s fastest-growing businesses and most successful women-owned firms. An award-winning leader in her field (she’s been recognized by Consulting Magazine twice as one of the top consultants in the U.S.), she is the author of How Performance Management is Killing Performance — and What to Do About It.