Taking the Stank Out of Performance Management

A Very Brief History

Originally developed for a manufacturing environment in 1911 (by Fredrick Taylor)

(Fred)

Brief History (cont.)

Peter Drucker introduced Management-By-Objectives (MBO) concept in the 1950s (to be used to manage managers)

(Pete)

SMART objectives evolved from Drucker’s concept (Specific, Measurable, Achievable, Realistic and Time-Bound)

So What’s Changed?

The speed of everything (and the impact on time)!

• Technology • Less stable, more unpredictable and ultra dynamic business

environment (goals/objectives and jobs are not static) • Doing more with less resources … constantly • Workers’ loyalty and expectations (the newer generation has less

tolerance for b.s.) • Company expectations - need people who can think and do their

jobs with general direction (maps are disintegrating)

What’s Broken?

• The methodology/process … top down = dragged down • Cascading objectives – good in theory, bad in reality

• Too much time and energy writing detailed objectives; learning complex software that “automates” the process

• Sometimes the manager is involved; sometimes not • Objectives sit in drawers/files – dusted off at review time and often

are irrelevant in a matter of months (ever hear, “We need to take a look at your objectives … now, where did I put them?”)

• Once or twice a year reviews actually retard daily conversations

Performance Reviews Are Coming …

• At 6 months and 12 months – let the moaning, groaning and scrambling begin!

• Executives, managers and employees dread it

• Writing reviews feels like climbing Everest for some

• Rare to have a really meaningful review meeting/dialogue

• More like a break-up; let’s just get this over with

The Corporate “Reality”

Percent of time complain-ing about, fretting, and

dreading the review99%

Percent of time actually spent writing the review

1%

Time Managers Spend on Performance Reviews

A Blueprint for a Better Way

• Get support of your executive team if possible (DO THEY WANT A BETTER WAY?)

• If you can’t get this, don’t give up. At least improve what you have!

• You owe this to your organization

• Getting this right/better could be a true competitive advantage and a way to draw “A” talent

Remove the crud and start with the basics …

Blueprint (cont.)

• Defining Performance = What you do (Results) + How you do it (Behaviors) • Measuring “What” – assess what got done and the quality, quantity and

timeliness • Measuring “How” – assess the behaviors you want

• Agree, communicate and train re: how you will assess: What + How

• Make it effective: simple, practical, understandable and relevant • Ensure employees know there is some level of ambiguity when assessing – that is

why daily conversations and “coaching in the moment” are so vital

Even Stars Need “Coaching in the Moment”

Putting It All Together

• Evaluate: Day-to-day responsibilities (“What”) • Evaluate: Goals/objectives if applicable; determined by job level, adjustable at any

time (“What”)

• Evaluate: The behaviors demonstrated (“How”) • 5-point rating scale – make it intuitive (more about this on slide 17) • Strive for a one page review format • Mostly check box with summary narrative • It’s a report card – it’s not a novel – it’s not a CYA document

You may not like his “how” but his “what” is off- the-chain and I do want him on my track team!

A Word About Rating Scales

Make them intuitive! Stop the jibber-jabber!

Decouple them from the academic grading scale – be purposeful about this, if that is what you believe

The 5-Point Rating Scale• Excellent• Very Good• Good (if it is good, solid work, call it Good!)• Needs Improvement• Poor

That catch far exceeded my expectations. The player went well beyond his objectives. He is highly accountable and a valued

member of the organization … uh, what???

The Process• Manager receives input from others – employee’s self-rating, customer ratings,

peer ratings, subordinate ratings • Manager reviews and evaluates day-to-day performance • Manager reviews and evaluates performance on goals/objectives (if applicable)

• Manager reviews and evaluates “how” • Manager conducts review with employee – targeted, pinpointed conversation • Manager considers and makes any adjustments/revisions; finalizes review • Submit review to HR oversight/analysis

Pay for Performance

• Merit increase reflective of the rating

• No forced distribution ever – most demoralizing thing you can do

• Use of standard merit formula across the company – eliminates management discretion, department budgets, gaming the system, promotes fairness and consistency!!!

• No more guide charts or department merit pools

• Will save a ton of time, transparent and fair!

Is the Pain Worth the Gain?

• Gives everyone a common understanding and way to pinpoint performance discussions

• Promotes daily performance management and conversations vs. waiting for “the

event” • The new process is straightforward, understandable, relevant, and far less time

consuming • Feedback from others is now feasible and streamlined • Saves tremendous amount of time, energy and angst • Still gets at the heart of what you want to do – effectively evaluate performance,

reward best performers with pay and succeed as a business

And, we can all aspire to be …

Please feel free to contact me:

Tim MoranTMoran Consultingtmoran728@gmail.com

Two requests:1. If you are a slow driver, stay out of the passing lane!2. If you say you are going to follow-up with someone, please

do so.