The Art and Science of Performance Reviews

The Art and Science of Performance Reviews

Performance management practices are evolving rapidly and the practice of annual performance reviews is under the gun, especially as it is tied to compensation and rewards. Last week I attended a conference at the University of Akron titled “Do Performance Reviews have a Future?”. The conference was presented by The Leadership & Human Resource Management Advisory Board. This was my first time at their conference and I was impressed. The speaker lineup included professors, attorneys, consultants and HR leaders. The speakers explored various aspects of why annual performance reviews as we have historically known them are ineffective (often counterproductive), as well as alternatives to improving the process.

 

Many of the findings presented reinforced concepts now familiar in HR circles. For example, Adam Ross of Goodyear discussed how Goodyear is becoming more strategic and how important it is to connect that strategy to employees. Mary Vales of Hyland Software said their culture is connected to the vision, mission and values of the company, and Hyland’s commitment to their people has helped the company move up various lists of great places to work and also driven financial results.

 

Mary then used a short clip in her presentation that depicted a fictional employee receiving praise and positive feedback from her boss, coworkers, family and friends in a Video Review. The video evoked a powerful and positive emotional response from the employee. It was a unique approach, and one that any employee would treasure.

 

Alan Colquitt from Eli Lilly took another approach, talking about the science behind performance appraisals. More to the point, he talked about the lack of factual data supporting the premises of traditional appraisal processes. For example, the idea that people are motivated to perform better with pay incentives has proven false. Instead, he said, people are motivated by goals, meaning and making progress. Alan pointed out that 95% of managers are unhappy with their company’s performance management systems. If managers are that unhappy, imagine how their people feel.

 

Yes, the annual performance review practice took a proverbial beating that day. However, even though many companies have abandoned the practice, most have not. Or at least not completely. The challenge is to find something that is better and more effective, and then to implement in a positive manner. This can be especially daunting in global organizations. Joseph Lubin from PRADCO gave several examples of clients that were in process with changes, and the successes and ongoing challenges they face. Madhavi Rubbo from GE discussed the challenges of changing a strong company culture on this topic, as well as rolling out a new process in waves around the world. Most examples of alternatives to the annual performance review were described as works in progress with results to be determined.

 

Ultimately, I am not sure we answered the conferences question about whether performance reviews have a future, but I concluded that in its traditional form, at best, the performance review is on life support.

 

During the Q&A session, I asked the group of speakers about the origins of the movement away from the annual review – is it rooted in managements desire to improve the bottom line, or in dissatisfaction of employees? Based on their responses, it appears this change is being driven by unhappy employees. Given the growing shift in supply and demand of talent (at least growing demand), the response was not surprising. Even so, my observation is that improving the way we evaluate and recognize people does lead to greater engagement and satisfaction, and that will lead to greater profitability.

 

Thanks to the University of Akron, the Advisory Board, the sponsors and, especially, the speakers for a great conference!

 

For help developing and implementing performance review and other talent practices that contribute to greatness, please contact me. We are happy to help.

 

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Talent Management Practices that Lead to Greatness

Talent Management Practices that Lead to Greatness

When LeBron James entered the NBA he was dubbed “The King” and appeared destined for greatness. Now he is the best player in the world. How he got there, though, was through a tremendous amount of coaching, practice, skills development and training.   Your people have a destiny with your company as well. Is it for greatness? That depends largely on your talent management practices. With focused talent management practices that contribute to success, your people can also reach greatness.

Consider the following list of talent management practices and see how they can contribute to greatness:

Talent Management Step Talent management Practice How it Contributes to Greatness
Identify Talent Pipeline Development Scouts for Greatness
Attract Talent Employment Branding Showcases Greatness
Hire Talent Recruiting and onboarding Selects for Greatness
Develop Talent Learning and Training Prepares for Greatness
Deploy Talent Strengths Based Job Matching Positions for Greatness
Manage Talent Performance Management Coaches for Greatness
Reward Talent Compensation and Benefits Recognizes Greatness
Engage Talent Align with Purpose Integrates Greatness
Promote Talent Succession Planning Accelerates Greatness
Measure Talent Talent Analytics Predicts Greatness
Energize Talent Culture Development Sustains Greatness

Everyone wants to be great at what they do. As you develop and evaluate your talent management practices, think about how they contribute to a destiny of greatness for your people.

For help developing and implementing talent practices that contribute to greatness, please contact me. We are happy to help. Randy Samsel rsamsel@futurestatetalent.com www.futurestatetalent.com 216-548-0740

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A Small Business Owners Guide to Sustainable Growth

A Small Business Owners Guide to Sustainable Growth

According to the SBA, small businesses make up 99.7% of US employer firms and 64% of US job growth. Clearly we live in a country that embraces entrepreneurialism. Unfortunately, only 50% of US small businesses survive 5 years or more.

 

While there are many opportunities and challenges for small businesses, few are as common as finding, leading and keeping great people. Talented employees represent an opportunity and challenge for small business owners. Handled properly, great people can lead to sustainable growth. Otherwise, problems tend to ensue.

 

How can a business owner maximize the opportunity for having sustainable growth through talented people? The key is to create an environment that develops happy and productive people.

Graph

As this graph indicates, ‘happy’ and ‘productive’ must go together in order to have sustainable growth. If you have neither, the end is near. If you have high productivity but unhappy employees, turnover will be high which will eventually erode productivity. If you have happy employees but low productivity, profitability will suffer. It is only by achieving both that growth can be sustainable.

 

Most business owners are adept at figuring out how to raise productivity for their particular business. Doing so while creating a culture where people are happy can be a bit trickier. According to Gallup’s employee engagement surveys, only 32% of employees are engaged at work (involved in, enthusiastic about and committed to their work). Disengaged employees do not promote higher productivity. So what is a business owner to do?

 

A great formula to use is to: have great people (current and future employees) who are aligned to the company purpose/mission + make sure each has the opportunity to use their strengths on the job + help each realize their career goals while helping the company succeed.

 

While this formula for creating a winning culture is understandable and logical, there are a lot of moving parts – like recruiting, on-boarding, training, managing, motivating, retaining, etc.. A strategic, aligned and intentional approach to executing the pieces/parts of the formula provides the best chance of success. We recommend developing a Strategic Talent Plan as a guide. Click here for access to our free guide to creating a Strategic Talent Plan. Armed with a well written and executed Strategic Talent Plan, business owners can dramatically increase their likelihood of success.

 

For additional help creating your plan, please contact me. We are happy to help.

 

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How Does Your Talent Stack Up?

How Does Your Talent Stack Up?

All organizations are only as good as their leadership and talent. How does your current leadership and talent stack up? For each of the following statements, rate your team from 1 (poor) to 5 (excellent).

  1. We consistently reach our strategic goals. _____

 

  1. We consistently reach our financial and operational goals. _____

 

  1. Our organization structure operates efficiently. _____

 

  1. Our organization utilizes our people’s talents efficiently. _____

 

  1. Our organization is well designed to help us reach our strategic goals. _____

 

  1. Our strategic talent is clearly defined and developed. _____

 

  1. Our top performers are in the most impactful roles. _____

 

  1. Our people clearly understand performance expectations at all times. _____

 

  1. Our future leaders are identified and are being developed for a smooth transition. _____

 

  1. Our top talent is engaged and committed. _____

 

Add your scores for all ten questions. If your score is 43 or better, you are in great shape.

If your score is 35 to 42, not bad -but you can use some improvement.

Below 35 – or if you are not sure how to answer, call us for a Talent Audit. We can help you assess and improve your current talent levels.

 

Please let us know if we can help you with a Talent Assessment, Talent Practice Review or Strategic Talent Plan.

 

Randy Samsel   216-548-0740 rsamsel@futurestatetalent.com

 

 

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That Championship Feeling!

That Championship Feeling!

Two weeks after the Cleveland Cavaliers beat the Golden State Warriors for the 2016 NBA Championship, I still have that winning feeling. I’m certainly not alone. All around Cleveland I see people wearing commemorative T shirts and hats proclaiming their pride for the first major sports championship since 1964. Everywhere I go, everyone I talk with seems to have a big smile that can only come from a feeling that will never go away. Complete strangers will high-five and let out a loud “Go Cavs” with a mere mention of the win.

 

When I first moved to Cleveland in 1980 the ‘Curse” was already sixteen years long. Who knew it would last another thirty-six years? Growing up in Indiana, basketball was king. So when I moved here, I immediately became a Cavs fan and have watched some really good, and really bad seasons. I remember when the Cavs won the lottery for the pick that became LeBron James. Following a circuitous path, and a storybook ending, LeBron and team delivered what many thought might never come. A few days later 1.3 million adoring fans attended one of the largest celebrations in sports history. All the jokes and disrespectful comments about Cleveland seemed to disappear.

 

Wouldn’t it be cool to feel that way all the time? Is it possible for the rest of us to experience that championship feeling at work? I believe it is. How? Just like the Cavs, it includes outstanding leadership; unified behind a common purpose; with supporting talent who all contribute using their strengths. That’s a winning formula. But it’s easier said than done. There are lots of moving parts and challenges. Like attracting and retaining top talent and outstanding leaders. And finding and communicating a common purpose that everyone will rally around.

 

Difficult – but not impossible. And well worth the effort. While that championship feeling for most will not result in a parade with 1.3 million adoring fans, it will come with dramatically increased employee engagement as well as improved financial results. Done properly, that winning feeling also won’t take 52 years to bring about.

 

For help creating a winning culture and talent strategy for your organization, please contact us.

 

 

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The Two Minute Culture Health Check

The Two Minute Culture Health Check

Is your organization poised for rapid growth? Many of us work for organizations that have excellent business prospects and strong strategic advantages. In addition, we may have great people in place who will help us reach our goals. The stars are aligned and we have the resources to move ahead. The only thing that can stop us now – is us. As long as we innovate and execute, we will win!

Is your organization and culture in shape to innovate and execute? Here is a quick diagnostic tool to help you find out. By answering these six questions, you can get a feel for how well you can innovate and execute in order to reach your near and long term goals. Here is how it works:

Rate your organization on a scale of 1-5 (1 being poor, 5 being great):

  1. In the last 12 months, our organization (company, division, department) has significantly improved productivity.
  2. In the last 12 months we have made significant improvements to our processes.
  3. In the last 12 months we have significantly improved the features of our products/services.
  4. We have a reputation for being very efficient in our organization.
  5. We have a reputation for consistency.
  6. We have a reputation for delivering superior results.

Add your scores. If the total is 10 or less, you need big help. 11-15, you are on life support. 16-20 there is hope. 21-25 is very good. 26-30 and you are in great shape.

The first three questions relate to cultural innovation (future success), and the last three to execution (current performance) capabilities. This is a simplistic diagnostic tool adapted and borrowed from a CSHRM presentation by Kurt Southam. Southam is a consultant and author with deep experience and expertise in organizational culture development. He shared his definition of culture as “what people do in the absence of supervision”, and described culture as the ‘operating system’ for an organization.

Southam made a compelling case for addressing cultural shortcomings with statistical support from mountains of data, and numerous studies. He described these four cultural attributes as impactful on business results:

  1. Self-Direction
  2. Open Dialogue and Communications
  3. Universal Accountability
  4. Influential Leadership

With these four attributes in place, Southam indicates that innovation improves more than 100%, execution by 91% and bottom line results by much more. Compelling indeed.

Culture change is not easy, and will likely be a journey over months if not years. The positive impacts of successful culture change on innovation, execution and bottom line results, though, can be tremendous. It is certainly worth two minutes to determine our starting point.

Need help assessing and impacting your culture? Please contact us.

 

 

 

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