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Performance Management, Performance Reviews and Appraisals

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I was asked by a manager yesterday to help to clarify the difference between performance management and appraisal.  I don’t think I did a great job  so I thought I would try again!

Performance management is a system with four parts:

  1. Specify the desired level of performance for the thing you are trying to manage (people, programs, products or services)
  2. Measuring performance – collecting and recording reliable data, both quantitative and qualitative
  3. Using data to compare actual performance to what is desired – recognising gaps between what is desired and what highlighting –  variances
  4. Communicating performance information – to those that are most able to use it to make progress

Performance management can happen at a number of different levels:

  1. The performance of strategies and plans at the organisational level
  2. The performance of products, services and programs
  3. The performance of teams, department or units
  4. The performance of individual employees

A key task for a manager is to decide at which level an investment in performance management is most likely to pay off.  In my experience an investment in the performance management of individual employees drives improvements at the team, product/service and organisational levels.

Performance Reviews and Appraisals are a small but important part of good performance management at the level of the individual employee and the team or business unit.  When aggregated they can also provide powerful contributions to performance management at the organisational level.

However these ‘one-off’ annual interventions need to be supplemented by more frequent processes for measurement, monitoring and change to keep up with the dynamic context in which organisations operate.  These interventions would include:

  • 121s and quarterly reviews,
  • feedback,
  • coaching and
  • delegation.

Collectively these provide a manager with a powerful framework for the performance management of individuals and teams.  Few managers that I meet consistnelty use these intervnetions with rigour, conviction and compassion. As a consequence they are at best ‘mediocre’.  Without them the likelihood of real progress being made is small.  Putting these simple interventions into practice can transform mediocrity into excellence.

Measurement is central to performance management, but it is a double edged sword that has to handled skillfully.

“People revert to metrics out of fear, not out of vision.”

(Patrick Lencioni)

Measurement is often about the minimum requirements and rarely helps to articulate a grand design.  It tends to lead to reductionist thinking and may have little to do with the ‘high ground’ of excellence.

“Managers who don’t know how to measure what they want settle for wanting what they can measure.”

( Ackoff & Addison)

Most managers spend to little time considering what they expect from an excellent employee.

  • What would excellence look like?
  • How would I recognise it?
  • How would I ensure that excellence was contagious?

Even if managers do have a conception of excellence they rarely build in the time to collect the data and establish the working relationships necessary to achieve it.  Typically this means observing people at work, giving feedback, coaching and so on.  What Tom Peters referred to as ‘Managing By Wandering Around’.

Instead managers retreat to the easy, low ground of using what they can easily measure as a proxy for performance.  They become mole whackers.  Things that are difficult to measure are neglected, while things that are easy to measure become important.

Performance management is just a tool. It can be used to

  • move your agenda forward – what is your agenda? What does progress look like?
  • provide powerful messages about what matters – it doesn’t have to be precise, just influential – what are you trying to influence?

Putting it into Practice

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The new year has started off with a couple of interesting management development contracts.  One in an FE/HE college and one in a housing association.

In both cases the reaction to the training has been very positive.  Managers have started using 121s which I am really pleased about – but once again – have found it difficult to start to give affirming or adjusting feedback.  The main barriers to giving feedback seem to be around ‘self-image’.

Perhaps it is a lack of confidence as a manager (it really is your job to give and get feedback if you are a manager – this is not negotiable!).

Perhaps it is fear of an emotional reaction (although we train feedback models that keep the chances of this very small).

It may be that managers are just not sufficiently clear about the behaviours they are trying to influence in pursuit of performance.

Or it may just be the fear of trying something new, of saying different words, of picking up on things that have historically been overlooked.

The one thing I do know is that once managers start to give and get great feedback rapid progress becomes possible.

Make Sure You Chop the Dead Wood

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This was the title of piece written by Geoff Colvin – and it has always been both important and relevant – even more so at the moment.

Here is the nub of Geoff’s piece:

Let’s be clear about the corrosive effects of avoiding this problem (underperforming employees). A recent survey from McKinsey is fairly chilling: Keeping poor performers means that development opportunities for promising employees get blocked, so those subordinates don’t get developed, productivity and morale fall, good performers leave the company, the company attracts fewer A players, and the whole miserable cycle keeps turning.

It gets worse. Employees know who the underperformers are. They know that the top executives know who they are. So every day the top team fails to address the problem, it’s sending a message: We’re not up to managing this outfit. Refusing to deal with underperformers not only makes your best employees unhappy, but it also makes them think the company is run by bozos.

Why don’t companies act? Some fear it would lower morale, which is nonsense. Mckinsey asked thousands of employees whether they’d be “delighted” if their company got rid of underperformers, and 59% strongly agreed – yet only 7% believed their companies were actually doing it. Executives often say they leave poor performers in place because they want the company to be seen as humane. That’s just more evasion of reality, of course. As Ed Michaels of McKinsey says, “The attitude is, “Let’s be fair to Charlie. He’s been here 21 years.” But we say, “What about the eight people who work for Charlie? You’re not being fair to them”.

A senior executive at Hewlett-Packard, put it like this: “I feel there is no greater disrespect you can do to a person than to let them hang out in a job where they are not respected by their peers, not viewed as successful, and probably losing their self-esteem. To do that under the guise of respect for people is, to me, ridiculous.”

Managing underperformers is a critical management function.  Having the courage to use feedback and coaching to improve performance to meet organisational standards (rather than turning a blind eye) and if necessary coaching staff as part of capability procedures is difficult work but it must be done – if mediocrity is to be kept at bay.

So consider this as a possible New Year’s Resolution for 2009.  Resolve to fire your greatest under performer.

Making this resolution will force you to address the under performance issues – because I know that you will not want to fire anyone.  It will force you to make 121s more powerful and honest, to give more feedback, to coach more, to praise more – to do everything in your power to make them such a great employee that you can’t fire them.

You might have another resolution that you didn’t see through – but you will have achieved something much more valuable – to have developed an underperformer into an over whelmer.

Are you up to it?

Why do Managers Duck People Management?

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This piece of research caught my attention recently;

“While 84 percent of organizations know that workforce effectiveness is important to achieving business results, only 42 percent of those surveyed say managers devote sufficient time to people management.”

What stops managers from spending time on developing workforce effectiveness?

Why do so many managers ‘duck’ managing people.

  1. Some managers don’t think it’s their job – ‘I am here to make sure that widgets get out the door on time and on budget.  I expect people to manage themselves.’
  2. Some managers don’t have the tools they need – Few managers are trained in the systems and processes that will help them to develop the potential and the performance of the people that they manage.
  3. Some managers believe that conflict comes with the territory – and would prefer to avoid it for as long as possible – Many managers fear that ‘managing’ people leads to conflict and conflict leads to poorer performance.  ‘People management’ is synonymous with ‘managing underperformance’.  Few managers have a positive, engaging and developmental management approach that thye know will work.

For me the managers job is not about ‘managing people’.  It is about providing them with a relationship to the organisation that allows them to develop their potential and to do great work.

In my experience managers that work systematically on building this relationship and then use:

  • feedback,
  • coaching and
  • delegation

to develop each persons contribution to performance very soon become outstanding managers recognised as leading high performing teams.

However it does take time – perhaps 60-90 minutes per week for each person managed to do the most effective job.  But the returns on that investment can be enormous – I would estimate productivity gains per person to be in the region of 25-40% within 6 months.

Wally on Leadership

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I regularly read Wally Bock’s blog.  He is always coming up with great insights and ideas.

In a recent post he reminded us that:

  1. Leadership is behaviour.
  2. Theory doesn’t count unless it turns into behaviour.
  3. Principles don’t matter until you incarnate them.
  4. If it doesn’t find its way into what you say or what you do, it can’t be leadership.
  5. Leadership is situational.
  6. One size doesn’t fit all.
  7. What works in one situation may not work in another.
  8. Your choices of what you say and do depend on the situation.
  9. If you aspire to leadership, understand that leadership is about actions measured by results in a specific situation.

Much the same can be said of management. I even agree with the situational nature of leadership – although I also believe that a single, simple management system can provide the basics of good organisational practice in the vast majority of situations.  A system where you:

Thanks Wally.  You can read the full post here.