Top Research Takeaways of 2016: Performance Management
Those of you who caught my October article on Upgrading Performance Management will be familiar with the trends and changes that shook up the field in 2016. Since Human Resources is constantly evolving, I thought I’d give you a jump on your 2017 planning with a quick run down of the three studies that, for me, turned up some of the most important insights into our field this year.
The Impact of Performance Management on Performance in Public Organizations: A Meta-Analysis.
Methodology:
If you want an overview of how performance management (PM) works across different organisations, a meta-analysis is the way to go. The authors looked at data from 49 studies evaluating PM in the public sector to see what worked, what didn’t, and where improvements can be made.
Key Findings:
To measure their effectiveness, the report graded the 49 individual studies on everything from data collection to performance management structure. Now, we’re managers not academics, so not every measure is of interest to us. However, if we focus on the assessments of benchmarking (its absence, limits, and structure), performance measures, and feedback; we unearth some valuable insight.
Top of the list, measuring performance doesn’t improve it. That’s not to say it’s time to ditch the performance metrics, but it does mean we can’t let them drive our performance management systems.
What this analysis shows us is that PM success hinges on management. Systems with a dedicated performance leadership team, that provided regular actionable feedback, increased organisational performance by as much as three times that of systems that simply measured objectives. Interestingly, organisations that used benchmarking to rank employee performance also performed better, probably because leaders could see who was learning well and tailor their approach to individual needs.
Top Takeaways:
- Management practices have a significant impact on the effectiveness of PM practices.
- Managing performance is more important than measuring it.
- PM systems with poor benchmarking are associated with lower performance.
Full study available from: http://onlinelibrary.wiley.com/doi/10.1111/puar.12433/full
When Employee Performance Management Affects Individual Innovation in Public Organisations: The Role of Consistency and LMX.
Firstly, let’s address the concept of ‘LMX’. An abbreviation of Leader-Member Exchange, it is basically a description of the relationship an individual has with their line manager, a relationship that impacts their experience of management and PM practices. High LMX means employees will experience management as supportive rather than controlling.
Methodology:
This study took a detailed look at the working environment of 1095 caregivers in 68 care homes across Belgium. The data was collected with self-assessed questionnaires, and workers asked to grade performance management, LMX, and individual innovation on scales designed for each variable.
(For those of you who are wondering, ‘individual innovation’ in this study refers to the tendency of workers to generate and implement new ideas).
Key Findings:
The long and short of it? Continuous monitoring and feedback in an environment where leaders and employees trust and respect each other leads to great LMX, and drives organisational performance by allowing individuals to innovate and improve workflows.
A word of warning: new employees were found to experience higher LMX than their long-serving counterparts. So don’t overlook those individuals who’ve got their roles down – good performance management practices are just as important to them, arguably more so since it encourages individual innovation.
Top Takeaways:
- LMX has the biggest influence on employee perceptions of performance management practices.
- Great LMX creates high performing employees with a strong inclination to innovate and improve services.
- The best performance management systems are on-going, consistent, and personable.
- Employers have a tendency to undervalue the importance of performance management to long-serving employees.
Full study available from: www.researchgate.net/M_Audenaert
Do Similarities or Differences Between CEO Leadership and Organizational Culture Have A More Positive Effect on Firm Performance? A Test of Competing Predictions.
Methodology:
The authors of this study set out to quantify the interaction between the CEO, organisational culture, and performance. They collected data from 119 CEOs in the software and hardware industries, and 337 members of their top management teams (TMT – think board executives). The TMT rated CEO leadership, the CEO and TMT rated organisational culture, and the unbiased Technology Consortium provided an objective measure of company performance.
Key Findings:
As the captain of the ship, the CEO’s impact on performance is multifaceted and far reaching. It is not, however, a case of one-size-fits-all. CEO behaviours that reduce performance in one organisation optimise it in another – and it’s organisational culture that determines which.
There are two prevailing theories on this phenomena. The first is Similarity Theory, and it states that leaders who align their actions with organisational values send out a unified message to staff. Theoretically, these consistent cues drive everyone towards the same objectives and enhance performance.
The alternative is Dissimilarity Theory, which suggests that leaders mirroring organisational values create redundancies. Rather than parroting the same values, CEOs take a contrasting approach, providing the support and frameworks missing from the organisational culture.
The findings of this study suggest Dissimilarity Theory best describes the interaction between CEO behaviour, culture, and performance. Organisations where social interactions were not valued, were seen to benefit from CEOs with strong interpersonal skills and a social focus. Businesses that lacked strong performance-based goals performed better under results-driven leaders.
Top Takeaways:
- CEO leadership behaviour has a significant impact on organisational performance.
- The interaction between CEO leadership and company culture has a critical impact on performance.
- CEOs are most effective when they provide the support missing from the organisational culture.
Study available from: www.researchgate.net/Patricia_Corner
To Sum Up…
What these three studies (and the host of others published on their heels) demonstrate is that, as an industry, we’ve still got a lot to learn about how our employees, leaders, and organisations interact with each other.
With each year we gain more valuable, actionable insight. It’s up to us as managers and leaders to make the most of it, optimising our performance management systems to create processes that deliver tangible results at an individual, team, and organisational level.
References
Organisations that implement regular performance feedback have 15% lower turnover rates than those that don’t. Source.
43% of highly engaged employees receive regular feedback. Source.
80% of millennials say they prefer on-the-spot recognition over formal reviews. Source.
Management Mistakes 101: Managing Missed Deadlines
We’ve all seen it. Everyone in the team is working flat out, their eyes fixed on an impending deadline they can’t miss. Everyone that is, except one. This individual may be working just as hard as the others, or they may be actively disengaged, but their failure to meet defined deadlines is dragging down the rest of the team.
At this point, most managers call a team meeting. Rather than singling out the underachiever, they address the whole team, hammering home the importance of meeting deadlines. That’s a kick in the teeth for those who gave it everything to deliver on time – and you can bet your last dollar they know exactly who the conversation is targeting. The obvious solution is to go directly to the source and tackle the problem one-on-one. So, why isn’t that our go-to response?
Why do managers avoid one-on-one conversations?
“From an evolutionary standpoint, it is natural to do things that make people like you. It enhances your chances of survival. Yet to be a good CEO, in order to be liked in the long run, you must do many things that will upset people in the short run.”
– The Hard Thing About Hard Things by Ben Horowitz
We all like to be liked. However, as leaders (and I don’t believe this is exclusive to CEOs), it is a mistake to put this natural desire above the needs of our teams.
A one-on-one conversation may be unpleasant – and potentially damaging to your personal relationship with an individual – but by putting it off, you are failing in your role as a leader. In fact, a 2010 study found that every crucial conversation managers avoid costs businesses an average of 8 hours of productivity and US$1500¹. To put it simply, we can’t always afford to be liked.
Mindful managers are good managers
There is a lot riding on your ability to manage an underperformer. Studies have shown that supportive leadership and a high quality team climate have a significant impact on individual morale, helping to protect employees from work-related stress².
Great managers are mindful of the impulse to avoid a difficult situation, but they don’t let it stop them from addressing the problem and finding a solution.
Getting to the root of the problem
“We need people who will give us feedback. That’s how we improve.”
– Bill Gates.
Poor performance and missed deadlines are caused by many issues. A lack of ability and a lack of motivation are two of the most common. However, misunderstandings and poorly defined expectations are just as likely.
Regular readers will know I’m a huge fan of SMART goals. Sustainable, Measurable, Attainable, Relevant, and Time-bound, these objectives make it clear to an individual what is expected and how they can achieve it. If employees are missing deadlines because of a lack of skills, poor organisation, or unclear expectations, then setting SMART goals is a great way to identify and address the problem.
How to deliver constructive feedback
One-on-one conversations can be stressful, particularly if an individual knows they are failing to meet expectations. I have addressed the issue of reducing stress in feedback conversations before, here are the key takeaways:
- Include emotions: Linking feedback to your emotions increases its impact. ‘When you do x, I feel y.’
- Reduce the threat: Individuals who are concerned about job security, your personal opinion, and their status can feel threatened. Make sure feedback conversations are two-sided and plan ahead to reduce these threats. Give the individual a chance to evaluate their own performance and devise a solution together.
- Be fair: An employee who consistently underperforms can be frustrating, but it is important to exclude your personal opinions from feedback conversations. Base your comments on facts rather than assumptions so individuals can see that your assessment is fair and unbiased.
- Focus on the future: Yesterday’s missed deadline is in the past. Keep performance conversations forward-focused and ensure individuals have the tools and support they need to deliver on their next objective.
The role of performance management
Performance management must be ongoing and integrated into workflows. These one-on-ones are not one-offs, and are just as important for star performers as underachievers.
All employees need a sense of purpose, and performance management is key to aligning individuals with organisational goals. Clear direction at every level increases creativity, organisational performance, and individual engagement.
Meeting one-on-one with team members gives them a chance to be heard. This means you can stay abreast of any potential performance issues at an individual and team level, and address them before deadlines are missed.
That said, you can have too much of a good thing. Those of you who caught my article on the science of feedback will know that monthly feedback strikes the right balance between overloading and underwhelming employees. In fact, detailed monthly feedback on areas of weakness was shown to improve individual performance by as much as 46% (if you missed that article, now is the perfect time to check it out).
To Sum Up…
Individuals who consistently miss deadlines are detrimental to the health of your team and organisational growth. The only solution for managers is to address the problem head on. If we want to avoid cynicism within the team, reductions in individual morale, increases in employee turnover, and reduced organisational performance, we need to overcome our personal distaste for difficult conversations and provide employees with the feedback they need to improve.
References
¹Maxfield, B., 2010. Cost of conflict: why science is killing your bottom line. VitalSmarts
²Deakin University, 2016. A manager’s role in the risk management of workplace stress. Deakin University
Why new managers should always start by managing freelancers
Learning how to manage is difficult. Overnight, you’re given responsibility for a bunch of people and somehow you need to deliver a result. It’s stressful, scary and can end in failure – for the manager, the project or both.
I don’t think the process needs to be this difficult. There’s only a few skills – though I admit some will want to differ – that you need to be an effective manager of people. And all of these skills can be learnt and honed very effectively through managing small-scale projects with freelancers. With more freelancers in the economy than ever before, there’s plenty of opportunity.
What is the role of a manager?
At the core of a manager’s responsibilities is helping their employees to learn.
Employee learning is critical, because fundamentally every business result happens as a consequence of employees learning and refining their behaviour over time. Happy customers, financial results and high performance are all consequences of successful managers facilitating employee learning.
Put simply, you cannot be an effective manager if you can’t help your employees learn. (Or, if you can’t facilitate learning, you will be an ineffective manager).
As a result, the critical success factor for a new manager is how quickly they can build the skills to help their team learn effectively.
How do you help others learn?
Facilitating learning doesn’t necessarily mean that you have to ‘teach’. But it does mean that you must partner with employees to foster, and even drive their learning. Doing this requires two things:
- Setting expectations, and
- Giving feedback
When you break it down, this two-part ‘expectations / feedback’ process (repeated frequently over time) sits at the heart of all employee learning.
So in terms of skills, the first two things that a new manager needs to learn are:
- How to set good expectations, that are easily understood and actioned; and
- How to give good feedback, to make sure that expectations (and relative performance) are understood
In my view, an A1, gold-medal way to learn these two skills is through managing freelancers on small projects.
Why freelancing is such an effective tool for teaching managers how to drive learning
In order to deliver a successful outcome with a freelancer, you must set clear expectations and provide frequent feedback. Because there’s no broader context, the success of the entire project is contingent on the manager’s ability to communicate expectations that can be well-understood, and feedback on the project deliverables. Put another way:
If the project manager fails to set good expectations (that are easily understood and actioned) – then the project will fail.
If the project manager fails to provides good feedback (that make clear actual performance versus set expectations) – then the project will fail.
The success or failure of the freelance project provides an immediate feedback mechanism for the new manager. In a relatively safe and quarantined learning environment, the new manager can see the consequences of feedback and expectation setting for learning and project delivery.
In conclusion
At the simplest level, to manage means you must be able to bring out the best performance in others, and drive learning in those around you to do so. In teaching someone how to manage, you must first teach them how to facilitate learning.
As I’ve mentioned in this article, teaching emerging managers how to drive learning is extremely effective when they are managing freelancers on small projects. To deliver the project, new managers must learn how to drive learning through the expectations / feedback loop. It’s an investment that you’ll see pay off for the rest of their management career.
Have you used freelance projects to teach new managers how to drive learning? I’d love to hear about your experiences. Jump into the comments below or join the conversation on Twitter (@cognology).
Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.
The science of feedback: What is the right frequency for workplace feedback?
New research suggests the right frequency for feedback is monthly. Surprisingly, it shows more frequent feedback (weekly) overloads employees and reduces performance.
What is the right frequency for feedback?
If you’re a regular follower of this blog, you’ll have noticed that I’ve been writing a lot on feedback recently:
- Is more feedback always better?
- The psychology behind better workplace feedback (15 surprising facts)
- How to make feedback less stressful
Since we published the research piece looking at Is more feedback always better? I’ve been asked a number of times: “How often should I ideally provide feedback to direct reports?”
It seems that there’s a real desire from across the market to understand just how often managers should be giving their individual performers feedback – that is, what’s the optimum frequency to provide feedback.
This hasn’t exactly been an easy question to answer for a long time. There’s been a lot of research, but not much conclusive evidence on the best frequency for providing feedback to your direct reports.
Employees want more feedback, but you can overload them. Where is the sweet spot?
In answering this question, we’re helped significantly by a recent study (March 2015) of 800 insurance professionals.
The study is a relatively comprehensive look at the changes in performance of insurance professionals in response to feedback. Researchers varied both the frequency and detail of feedback that the employees received in order to assess the impact.
As we’d expect, more feedback doesn’t always help to drive better performance (largely because employees reach a state of feedback overload, as we discussed last week on the blog).
The researchers found that professionals receiving detailed feedback on a monthly basis outperformed all other groups involved in the study. Those receiving detailed monthly feedback improved performance on their key complaint measure by an impressive 46% relative to the control group over the course of the study.
For comparison, the performance of the groups receiving the more frequent weekly feedback was not statistically different from those in the control group.
Interestingly, researchers found that the employees receiving weekly feedback tended to overweight their most recent performance. Over the longer term, this hampered their ability to learn. This phenomenon is discussed in detail below (it’s fascinating and worth reading in full):
“The results… suggest that providing more detailed feedback is useful for improving performance. However, that is only the case when feedback is provided sparsely. Detailed feedback loses its usefulness when provided very frequently. Similarly, providing more frequent feedback, even when it is less detailed, does not seem to help professionals improve their performance.
Taken together, the results suggest that professionals fail to process the additional information rationally. The recipient of frequent feedback may fixate on the most recent information, leading him or her to underweight or ignore evidence that is more distant in time and thus limiting the amount of information actually used in decision-making.
This leads professionals to make the wrong inferences, reducing their learning and hampering performance improvement. By providing detailed but less frequent feedback, [The Company] communicates richer information in a single report, allowing professionals to identify true trends and ignore noise in the metric.”
It seems like employees receiving weekly feedback tend to overthink recent results, and fall prey to feedback overload. As the researchers noted:
“As soon as professionals stop receiving weekly information, their performance improves, and the deterioration of performance after receiving a bad report disappears.”
All in all, it’s a comprehensive and well-structured piece of research that has big implications for best-practice feedback and performance management.
Monthly feedback frequency as best practice is broadly supported by current Cognology data
This feedback frequency is supported by the data we have available to us at Cognology (our software powers performance and talent management for over 250 Australian businesses). Looking across our client base, a monthly feedback frequency appears consistent with what we’re seeing from best practice clients.
As a quick reminder, when we most recently looked at Cognology product data on feedback frequency on the blog, we found:
“For the average employee, the number of annual feedback events has risen from just under three in 2011 to nearly nine in 2014. That’s an increase of over 3x in four years! Spreading this feedback out across the year, this increase means that employees received feedback roughly every six weeks in 2014 (compared to once every four months in 2011).”
Whilst the amount and frequency of feedback continues to rise across our entire client base, our best practice clients are on track, hitting an equivalent monthly feedback frequency in 2015 (12 feedback events across the year).
In conclusion: Best practice feedback happens monthly
In the absence of further studies, I think it’s safe to say that best-practice feedback frequency for professionals is monthly. At a monthly frequency, you get all the benefits of enhanced performance through regular feedback, but don’t risk the ‘feedback overload’ that seems to happen with a weekly feedback frequency.
I’d love to hear about your experiences setting the best frequency for detailed feedback. Have you tried weekly, monthly or quarterly conversations? What works best for your team and organisation? Understanding the right feedback frequency to get the most out of every employee is an exciting frontier as we move towards talent management for the future of work – so I’d love to get your input and thoughts.
As always, you can join the discussion in the comments below or on Twitter (tweet your thoughts to @cognology).
Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.
Is your recognition program actually motivating your employees?
Five things you need to know to keep your employees motivated and on track
Employee recognition is a topic that doesn’t get as much attention as it deserves in the HR blogosphere. A well-structured (and executed) employee recognition program is a critical piece of an effective talent management strategy. But too often businesses think of employee recognition as a formal and expensive HR only activity.
In my experience, doing employee recognition well definitely doesn’t have to mean expensive. And it also doesn’t have to mean gold watches. So to help you out, I’ve put together my employee recognition cheat sheet. Here are the top five things that I think you need to know about employee recognition.
1. You don’t give as much recognition as you think you do.
Studies have shown there’s a big disparity between how much recognition managers think they give employees and how much recognition is actually delivered. This research from Bersin showed that “Nearly 80 percent of senior leaders believe employees are recognized at least on a monthly basis… [whereas only] 40 percent of managers and only 22 percent of individual contributors report that their peers are recognized monthly or more often.”
It’s easy to let recognition slip. Things get busy or something urgent pops up. And saying thankyou for something that’s already been ticked off can always be done a little bit later. But if you let recognition fall through the cracks, your employees will feel like they have too.
2. Any form of recognition can be effective, as long as it’s timely.
The best time to give recognition is as close to the deed you’re trying to recognise as possible. Waiting to deliver feedback or recognition diminishes its value. This has been shown through a bunch of academic studies (There’s a great collection of supporting research listed here)
It’s important that you give feedback on your employees’ work as they do it, whether it’s good or bad. If an employee isn’t performing up to your standards, you don’t wait until their performance review to deliver this feedback. It’s got to be the same with an employee doing outstanding work.
Praising an employee for a job well done is more effective at the completion of the job, rather than six months down the track. It locks into everyone’s mind what standard of work is expected and rewarded in your organisation.
3. Informal recognition beats the gold watch every time.
You might have a recognition program of gold watches, plaques and pens. But are they really effective in driving discretionary effort from your workforce?
The biggest problem with these reward systems is they’re all tenure based. And research shows tenure based reward systems have little to no impact on performance.
Just how ineffective tenure-based recognition programs are is easy to understand from your own personal experience. Have you ever stuck around in a job for a few more years just to get a gold watch? Of course you haven’t.
The most effective form of feedback is informal, timely and genuine. You don’t need to put someone’s picture on the wall to say thanks for a job well done.
4. Reserve significant recognition for exceeding expectations, not meeting them.
If an employee submits a report to you on time, that’s meeting expectations. If a team brings a project in early and under budget, that’s performing beyond the call of duty.
Talk to your employees about their performance every day. But be sure to only give out the most significant recognition when it’s deserved. Whilst it’s important to give out recognition frequently, it’s also critical to keep your recognition meaningful. Give out too much recognition and it will carry little or no value. Give out too little and it will seem unattainable, and won’t become a motivating factor for your employees.
As this German research study shows, Employees will work harder as long as your positive feedback feels attainable and carries value.
5. Make sure the connection between your business goals and your recognition program is clear
One final word of warning: It’s critical that your recognition program is clearly tied back to the goals of your business. If you’re not rewarding behaviours that drive the business forward, you’re not rewarding the right behaviours (full stop).
At Cognology, we want to deliver talent management software that powers the future of work. That means I place a premium on innovation. It means making the effort to publicly call out employees that think outside the box. And it means constantly tying back performance and remuneration reviews to our ability to deliver software that works for our clients both today and tomorrow.
Business goals are really easy to talk about in the abstract. But they’re much harder to consistently reward and recognize. That’s why it’s so powerful when your reward system reinforces your long-term business goals – everyone’s incentives are completely aligned.
What’s the most effective form of recognition at your workplace? I’d love you to jump into the comments below and let us know your view.
Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.