Priming for performance (draft) v0 - There Be Giants

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Priming for Performance How you can draw from the revolution in Performance Management to transform your results

Roger Longden Partner, There Be Giants

PRIMING FOR PERFORMANCE ︱ [email protected] therebegiants.com

Introduction page 3

Who this paper is for and what it will give them page 5

How There Be Giants can help page 6

The current state of Performance Management page 7

The case for change page 10

The three organisational elements that demand conscious management page 12

The risks to alignment page 14

The nine elements of a great performance management system page 19

Integrated shared values page 21

Growth mindset page 22

Coaching page 23

Line-of-sight between business priorities and individual objectives page 24

Real-time feedback page 25

Focus on feedback and future capability page 27

Remove rankings, ratings and grades page 29

Simplicity page 32

Challenge under performance page 33

Summary & Conclusions page 34

About the author page 37

Appendix 1 - feedback frameworks page 38

References page 40

Contents

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It’s no secret that great performance management is a challenge most businesses struggle with. This is regardless of their size, sector, experience, geography or the resources they have at their disposal.

Most performance management (PM) defaults to an annual

appraisal approach in which achievement against a number of

objectives is assessed, a rating awarded and (possibly) there’s

some discussion of career planning and training/development

needs.

I believe that PM presents a huge opportunity for business to

improve their profitability and outcomes, for stakeholders,

employees and customers. As such, I conducted research over

a twelve month period spanning 2014/15 where input was

collected from over 200 business owners and senior leaders.

All had a vested interest in the management of individual

performance across their workforce. Our key findings were:


Introduction

Research now not only proves this approach to be

ineffective, but shows that it actually undermines the very

performance it seeks to encourage.



I believe change is not only possible, but also imperative. If

60% of senior managers don’t believe their organisation’s

approach to managing individual performance is helping them

achieve their business objectives, then that alone is a

compelling case for change. However, the case grows stronger

when we take account of research from respected

organisations like the NeuroLeadership Institute on how poor

PM carries both a human and organisational cost.

Why does this continue?

We are starting to see the grass roots of new thinking and

practice emerge. Technology businesses (like Google and

Juniper) were some of the earliest to adopt new approaches -

some as far back as ten years ago. More recently, major

professional services firms like Accenture & Deloitte have

followed suit. However, the majority of businesses and

organisations still don’t know what choices they have to break

the annual cycle they find themselves in, or how they could

start creating a new PM system.

The good news is that in my research, 92% of senior managers

reported having an appetite for change and a desire to move

towards a more productive and sustainable approach to PM.


Organisations who still use the traditional annual appraisal

approach to PM are not only failing to access the untapped

potential in their workforce, they are actually holding

collective performance back and generating unnecessary cost



This paper has been written for those who believe there is more that can be done to transform the management of individual performance in both organisations and businesses.

It provides a view on why traditional Performance Management

is fundamentally flawed and is limited in its ability to generate

great results. It also outlines some pioneering examples of

how performance management is being developed.

It also outlines the nine elements needed to for a performance

management system to deliver long-term success and how PM

can be a lever to help consciously create a high-performing

organisation. .


Who this is paper for and what it will give them

This paper examines:

• Why traditional annual appraisal based Performance Management is flawed as an approach to enabling people to deliver great results

• Examples of how some organisations are taking a fresh approach to Performance Management and doing things differently

• A model to illustrate where and how your business or organisation could start to transform your approach to Performance Management



Releasing potential. That’s our purpose.

From the individual work we do with business leaders, owners

and managers, to the overall organisational perspective we

take within our research and practice, we spot the hidden

potential and help release it.

Businesses can't avoid changing size and shape - especially the

high-growth businesses we often work with. It’s the nature of

our economy, as market forces constantly ply their

opportunities and threats, businesses are pushed and pulled in

many directions.

Businesses who make the choice consciously create the right

structures, systems and skills - and underpin them with a great

culture and a clear vision/strategy and plan - deliver clear

benefit to their bottom line - FACT.

We see Performance Management as being central to creating

a great organisation that delivers consistently fantastic value.

This is why we chose to take two years to research and create

this paper.

If you’re curious about how well Performance Management is working in your business, then we’d love to take you

through our best-practice assessment, which is based on the nine-point model we propose in this paper. Just drop

us a line and we’ll set it up with you.

Consciously creating the organisation you need to be

successful sounds simple right? It’s amazing how often it’s

overlooked and what a difference it can make

We like to call it Organisational Architecture - intentionally

building an environment in which the business (and it’s people)

can thrive and grow.


How There Be Giants can help



The way the majority of businesses and organisations (in both commercial and public/non-profit sectors) manage the performance of their people both sabotages and limits the very results they aim for;

For too long people have been at best de-motivated and at worst damaged (along with potential talent wasted) in the pursuit of a command and control default management style that’s often the intention, and almost always the consequence of the traditional annual appraisal-based approach to Performance Management (PM)

This current state of affairs will be explored within this paper

however, the questions I believe it raises are:

Why do stakeholders, be they investors seeking high returns or

public servants trying to balance service quality with ever-

diminishing budgets, allow such a wasteful practice to roll on?

Surely they owe it to their shareholders, stakeholders or tax

payers to get the best returns?

Perhaps the most compelling argument for change is that

employers who hold fast to traditional PM will find attracting

and retaining great people increasingly difficult - therefore

driving up their costs and making them less competitive. Much

has been written about how Generation Y (often called

“Millennials”) highly value investment in the their personal


The current state of Performance Management

Organisations who still use the traditional annual appraisal

approach to PM are not only failing to access the untapped

potential in their workforce, they are actually holding

collective performance back and generating unnecessary cost



development and will judge both their potential and existing

employers on their commitment and ability to support this.

PM has long been an area of interest for me. I’ve been on the

receiving end of some shocking appraisals and also

experienced the demands of a HR-driven process and system

which redefined the term “inefficient” and attributed more

value to meeting deadlines (regardless of outcome) than to the

impact of the process upon the people it was there to help

manage and develop.

While this may make me sound like I’m against any form of

Performance Management, let me be clear, I’m not. If great

organisational performance is to be achieved, then there’s no

escaping that the people within it need their individual

contributions managing too. I just refuse to believe the status

quo has to remain. There has to be a better way!

PM is not a new challenge. Back in the 18th & 19th century, it

was common practice in England's industrial north

for mill owners to place coloured wooden blocks

above the looms of their people. That was their way

of giving feedback on a worker’s performance,

publicly placing in the spotlight their star workers and

ridiculing their low achievers.

In the work my Partnership (There Be Giants) does

with business leaders, managers and their teams, I’ve become

aware not just of where there’s scope for much improvement,

but also of where some innovative and exciting approaches are

being taken to address the PM challenge. This motivated me

to undertake some research of my own to dig deeper into what

was going on - both good and bad. The main findings from

this research were outlined within the Introduction on page 2.




There have also been some larger studies on PM published

recently which echo these findings, albeit from a larger

research base. Here are some examples.

The Institute of Leadership & Management found in the

research for their report “Beyond the Bonus: Driving Employee

Performance” that managers believe only 33% of their people

respond positively to appraisals. When their people were

asked the same question, only 20% said they agreed with that

[1]. This highlights not only the general engagement challenge

that PM faces, but also points to a gap between the

perceptions of those who deliver PM and those who receive it.

The Korn Ferry Leadership Institute discovered that when

rating over 7,500 leaders and managers on 67 difference

leadership competencies, the ten competencies associated

with “growing talent” (i.e. developing your people, which is a

major element of PM and one of the most effective motivators)

were also the bottom ten [2]. That means, on average,

managers are worse at developing their people than anything

else they do!

Those large cornerstones of the corporate world - PWC and

Deloitte - have also recently published their own research into

PM. Deloitte found that 58% of senior managers felt PM was

not an effective use of time and only 8% reported they felt PM

drives high levels of value for their business [3]. PWC reported

that 66% of large corporations are looking to make changes to

their PM and 5% are looking to change it completely [4].


“…managers believe 33% of their people respond positively to appraisals; …only 20% of their people agreed…”

“…only 8% of senior managers felt PM drives high levels of value for their business…”



While it is encouraging to see there’s an acknowledgement of the need for change, one of the important questions this paper looks at is why hasn’t that change happened yet. To some extent, the green-shoots of the early adopters are starting to break ground and it’s these pioneering few who could shine a light on the way forward for those who want to improve their PM, but are unsure where to start.

While Google and other tech giants were the very

first to adopt transformative PM 10-15 years ago,

another recent and very high profile sign-up to the

revolution is Accenture. They announced their plan

to drop annual performance appraisals for all 330,000

employees globally in July 2015 [5]. They are

framing it as moving from Performance Management

to Performance Achievement and their Chief Human

Resources Officer - Ellya Shook said:

This is indeed refreshing to hear and the thinking behind

Accenture’s approach will be examined later. Essentially, what

Business Leaders finally seem to be grasping is the clear

correlation between an energised, innovative and engaged

workforce and every key business metric they value, from

productivity to earnings per share. This stands true in all

sectors - commercial/public/non-profit - and in all sizes of

organisation both big and small.


“When we hire great people, we should trust them and give them freedom to innovate rather than managing, measuring and administering a process”

The case for change



The inescapable reality is that from 1 employee to 100,000

employees, if people don’t feel valued, trusted and engaged,

you will not get anything more than the bare minimum

required. Mediocrity will prevail and the bottom line will be hit

by higher than necessary sickness, recruitment & exiting costs

and be weakened by low productivity.

The Barrett Values Centre did some analysis in 2012 where they

compared the earnings per share of the Standard & Poor’s 500

over a ten year period with the same measure for the US Best

Companies to Work For index (similar to the UK Times

Top 100 best employers). Those businesses on the US

Best Companies index out-performed their S&P 500

peers by over 10% and also showed greater resilience

in recovering their lost value after the 2008 downturn

[6]. Because a company listed on the index needs to

excel in managing, leading and developing their

workforce, it can be suggested there’s a direct link

between their ability to do this and their financial resilience and

higher results.

The mounting evidence of the impact to the bottom line might

well be the incentive business leaders need to convince them

it’s worth reviewing their approach to PM. After all, people

costs are one of (and often the) largest cost to a business, so

shouldn’t their stakeholders expect them to achieve the best

(and most sustainable) return? It wouldn’t make business sense

to invest in a new production line and run it at 100% until it

broke down due to lack of preventative maintenance. So why

do this with people?

Let’s look next at what you need for great PM.


“…Essentially, what business finally seems to be grasping is the clear correlation between an energised, innovative and engaged workforce and every key business

metric they value…”

“…Because a company listed on the index needs to excel in managing, leading and developing their workforce, it can be suggested there’s a direct link between their ability to do this and their financial resilience and higher results…”



People are a little more complex than machines and, as a leader or a manager trying to manage performance, there are plenty of opportunities to score an own-goal.

I believe there are three elements that require consideration

when exploring why PM can be so tricky and where the

solution will lie:

1. Collective Mindset - Initially, there’s the Collective Mindset

of the organisation with all its culture, habits, norms and

unspoken rules. Culture is what can derail even the most

finely-honed strategy and it’s both the culmination of, and a

contributor to the other two elements.

2. Systems are both the formal and the informal ways that

things are done. Some may be rigid and highly engineered

while others, often those associated with people,

have the scope to be more flexible in nature and less

defined. This makes the performance of human

systems heavily dependant on the quality of the

interactions within them. Under traditional appraisal-

based PM, this puts the person leading the PM

conversation (i.e. the manager) at centre stage. The

language they choose has a huge impact on the

outcome of that conversation and the success of the

system.

3. Personal Mindset - The criticality of the manager-

employee interaction means the language the manager

chooses has a major bearing on the personal dialogue (i.e.

how they feel about their job, what’s being asked of them

and how fairly they feel they’re being treated) of the

employee which has a major influence on their degree of

motivation. This drives the quality of their Personal

Mindset.


The three organisational elements that demand conscious management to achieve great Performance Management



When we consider the interplay and complexities at work here,

it’s easy to see why PM is believed to be misfiring in so many

organisations. There needs to be a direct line-of-sight right

through all three of these factors. If any are out of alignment,

then your PM will not deliver to its full potential.


Curious about how your business shapes up?

Why not try our best-practice assessment?

Drop us a line for more information



Before we can take a look at where the answers may lie, it makes sense to examine what might cause misalignment. Regardless of how simple and efficient the system may be, or the level of focus that’s given to managing culture, the key factor which underpins performance is personal mindset. If this internal dialogue is not below par then will forever remain mediocre at best

A significant contributor to the debate around PM in recent

years has been David Rock. Rock (as head of the

NeuroLeadership Institute) has helped decode the complex

findings of neuroscience research and apply them to the key

people-related challenges businesses and organisations face

today, such as PM. On the subject of PM, Rock believes [7]:

This is a worrying claim however, neuroscience is now helping

us to develop new approaches to PM. Advances in brain

imaging technology over recent years have provided a clearer

insight into how our brains respond to various

situations. Rock suggests the fairly simple principle

that we instinctively move towards reward and away

from threat. However, the complexity lies in what we

perceive as threat and reward. He has identified five

general domains (see SCARF insert) where he

believes both threat and reward can be experienced.


The risks to alignment

“In the context of neuroscience research, most PM practices turn out to damage the performance they are intended to improve. That’s because they are based on a fundamental misunderstanding of human responses.”



As a leader or a manager, you will get better results if you are

consciously managing these responses in your people. This is

because when we feel threatened, our ability to problem solve,

think laterally, creatively and collaborate with others is severely

limited. We basically hold all our resources back for our own

use and protection. These qualities and behaviours are

essential when facing the challenges of modern day business

and public service.

Given that our threat response is the more sensitive of the two

(it’s there to keep us safe after all) there are plenty of

opportunities for traditional appraisal-based PM to set off the

hair triggers within us. I’m going to use SCARF as the lens

through which to examine how traditional PM systems &

processes can have such a severe impact on the employee

internal dialogue due to the “flash points” which can be

triggered off.

Let’s start with the PM system itself. Often it’s owned by

Human Resources departments, runs on an annual cycle, can

be complex to use and places the emphasis on feeding

information into decisions like pay and promotion. There is

likely to be a template that the reviewing manager needs to

complete along with a number of boxes to be ticked and

ratings to be awarded. The emphasis is often on getting the

information into the system, rather than the quality of the

conversation with, or the outcome for, the employee. The

consequences of this might be:

The process becomes more important than the person.

If the employee is left with this perception, their status

domain may experience a threat response as they are likely

to be left feeling undervalued and disengaged;


SCARF domains:

Status - how we perceive our position in relation to others

Certainty - how secure we perceive our future to be

Autonomy - the degree to which we perceive we have freedom of choice

Relatedness - the degree of connection we feel to those around us

Fairness - how fair we perceive an exchange to be



The driving force behind PM becomes about command & control.

If this is the perception then the autonomy domain takes a

hit as they are left feeling “done to” with little or no

opportunity to influence the outcome;

The review can often be a long time after the event - possibly up to twelve months.

This could trigger the fairness domain as a sense of injustice

may come from having all errors and challenges stored up

for an “ambush” in their appraisal. It might also trigger

relatedness as the lack of timely feedback only serves to

highlight a poor connection between the manager and their

employee. Also - especially if performance is only discussed

at an annual appraisal - so much can be felt to be riding on

that one conversation (i.e. a pay rise, a promotion etc.) that

certainty takes a hit as the employee is likely to be highly

anxious about what the outcome will be - not an ideal state

for reflecting on feedback and thinking creatively;

There’s a prevalence for managers to give an average ranking to the majority.

This is has been found to be quite common within traditional

appraisal-based PM systems [7]. The belief on this is

that a low grade is likely to reflect poorly on the

awarding manager (i.e. one of their people is a poor

performer whom they have been unable to turn

around). Also, high and low ratings often attract

additional focus either to justify the proposal or

remedy the issues. This can mean that low

performers get bumped up and high performers get

penalised. This runs the risk of causing a significant

hit on fairness for those being appraised.




What we are concerned with here is perception management.

If people don’t trust the process (of which their manager is a

key part) to be objective and fair, they are likely to be “shutting

down” even before they arrive at the appraisal meeting

(remember 79% believed PM wasn’t viewed positively in their

organisation). Indeed, research has even shown that we only

have to witness other people experience a painful interaction

(e.g. possibly hearing about a colleague who has had a bad

appraisal conversation) to trigger our own threat response [8].

So, if a manager delivers an appraisal that’s not considered to

be fair by one of their team members, it’s likely the rest of them

will be “shutting down” before their own appraisals

even start.

This leads on to the dynamic between the appraising

manager and the employee. Right from the outset,

traditional PM puts the manager in a position of

judgement and power. Berne [9] recognised these as

being qualities we often exhibit when we’re in a

“parental” state and, no surprise, they often elicit a

“child” state in the recipient, in this case the

employee. This is not to say they scream and shout,

but is more about their inclination to only hear what

confirms their beliefs and to become defensive. The

solution is to move to a more “adult-to-adult”

interaction in which both parties value and trust each

other.

At a cultural level, the biggest symptom and cause of PM

dysfunction is the belief that people can’t or won’t develop and

grow. This “fixed mindset” was historically supported by the

scientific community who initially thought that our intellect was

fixed at birth - in other words “we only have what we were

born with.” Research has now shown this not to be true. The

brain is very much capable of learning new habits right through


“If people don’t trust the process … to be objective and fair, they are likely to be “shutting down” even before they arrive at the appraisal meeting”



to our very later years. This principle of “plasticity” has major

implications for business and the way people should be

managed, what can be expected of them and indeed how they

should be motivated. This challenges the belief that people, in

general, are limited in their abilities. They are likely to be far

more capable than previously thought if managed well.

While there have always been managers who have instinctively

believed in their people’s potential and ability to grow, there

are many more who don’t and may indeed intentionally seek to

limit it, again for reasons of command & control. This is

regardless of no end of esteemed management and leadership

authors advocating people empowerment and development as

a sound facet of a successful business strategy. Now,

neuroscience gives us the evidence to show why it works and

strengthens the argument for it to be no longer ignored.


“The brain is very much capable of learning new habits right through to our very later years”






Across the landscape of PM, amongst the current appraisal and rating conversations, we find that little of it seems to be effective. There are however, some managers who do seem able to make PM work for them and their people, despite the inertia they have to work against. This is often because the manager instinctively has a “growth mindset” (i.e. holding the belief that everyone has the potential to learn and grow) allied to a strong coaching style and is prepared to dilute/challenge the command & control traditional PM enforces.

The key to improving PM therefore lies in not only encouraging

more of a shared “growth mindset” and coaching management

style across the business, but also in creating the right PM

system that supports and promotes the best conversations and

behaviours.


The nine elements of a great Performance Management system

Curious about how your business shapes up? Why not try our best-practice assessment? Drop us a line for more information



I believe an effective PM system is comprised of the following

nine elements:

i. A clear set of shared values (and supporting behaviours)

across all roles & teams

ii. A central belief that is rooted in the principle of “growth

mindset”

iii. Extensive use of coaching (i.e. enabling others to find the

solution rather than spoon-feeding it to them)

iv. Direct line-of-sight between business/organisational

priorities and individual everyday activity

v. A system that facilitates real-time feedback, possibly

through the use of social technology

vi. A focus on feeding-back and assessing/developing

capability for future performance

vii. Does away with numerical ratings and any forced-ranking

activities and links reward to value added by the individual

viii. The system itself is not over-engineered and aligns the the

principles of simplicity, agility and transparency

ix. Makes provision for managing genuine under-performance

These will each be explored in more detail to see why they are

vital.




i. Clear shared values & behaviours which are fully integrated into key business processes

Most organisations and businesses have gone through the

exercise of developing a set of values. This is often driven

by Marketing with the belief that it will strengthen the brand

in the eyes of the customer. The risk is that once this hard

work is done, they become a plaque on the wall in reception

and only get mentioned at new-joiner inductions.

A huge amount of value can be driven by integrating the

values (and supporting behaviours) into key business

processes such as recruitment, reward, promotion and the

management of individual performance.

These should also be supported by clear individual and

team role statements which detail responsibilities, how they

fit within the organisation and what their measures of

success are.

Defining a set of values, and then not working by them can

be seen as inauthentic, is likely to drive up cynicism and

weaken trust. This will impact internal dialogue and

personal mindset.

An organisation who is regarded as being true to their

values stands a good chance in positively impacting the

SCARF domains of certainty, relatedness and fairness.


“A huge amount of value can be driven by integrating the values (and supporting behaviours) into key business processes”



ii. Shift to a growth mindset

This requires a “whole systems” approach starting with the

beliefs of the leader who can then reinforce a growth

mindset throughout the business by using training,

intelligent design of the performance system (e.g. guidance

on structuring great conversations) and integration into the

values and expected behaviours. If you explicitly state that

you expect your staff to develop and will both champion

and even celebrate that development, then you’re

publicly reinforcing your belief in it. Remember, it’s

the perception you have to manage, so having the

policy and even the practice is not enough if it’s only

going on quietly.

By adopting the feedback tools suggested, while

making provision for and honouring a commitment to

staff development, you will be visibly demonstrating

your belief in a growth mindset.




iii. Make extensive use of coaching

The managers who are working within traditional PM, but

yet are still achieving good results are likely to have a

naturally strong ability to coach their people. A coaching

culture is evidence of the organisation or business believing

in a growth mindset. It builds capability through on-going

learning and reflection. It also encourages independence

by supporting employees to find answers for themselves.

This can have huge benefits for productivity, creativity and

diminishes the need for management to focus on low-value

activity. When allied to a culture where mistakes are valued

as opportunities to learn, this type of environment can have

a very positive-reward impact on autonomy (e.g. “I’m given

the freedom to discover and learn) and status (e.g. “I’m

valued and trusted to learn from my mistakes”).

Get curious if you’re told that your managers are already

coaching their people. ILM found that 88% of managers

believed they were, yet only 46% of employees agreed [1].


“…get curious if you’re told that your managers are already coaching their people. ILM found that 88% of managers believed they were, yet only 46% of employees agreed”



iv. Direct connection between business priorities and individual performance

If the business has developed a clear vision, strategy and

plan, and it is thoroughly understood by all, then people

should be asked to set their own goals based on those of

their direct manager. For SCARF, this is good for Status

(“I’m trusted to set my own goals”) and Autonomy (“I’m

allowed to set my own goals”).

The outcome should be clear individual goals that are all

aligned to business priorities.

Google’s OKRS approach (see insert) gives an example of

alignment in action.


How Google set goals

OKR’s (objectives & key results) goal setting steps:

Set up an objective which is ambitious and feels a bit uncomfortable

Draw up some key results which make the objective achievable and are quantifiable

OKR’s are:

Set at an individual level - an over-arching annual OKR supported by quarterly OKR’s that support it

Set at team and organisation levels

Limited to between 4-6 per quarter for individuals

Fully transparent - anyone can look at anyone else's (including Larry Page’s) at they are published on their personal home page

“The outcome should be clear individual goals that are all aligned to business priorities.”



v. Real time feedback

Ditch the annual appraisal meeting!

I can’t stress this strongly enough.

Get into the habit of having regular performance

conversations (at a minimum, quarterly). Leaving too long

between an event and the feedback increases the risk of

triggering a fairness threat (not to mention the wasted time

due to the possible delay in correction). Regular, respectful

feedback is the cornerstone of a great management

relationship and can reinforce reward under relatedness if

done well. Don’t be fooled into assuming that the majority

of managers are already doing this well either.

ILM found that while 69% of managers believed they were

giving real-time feedback, only 23% of employees agreed

[1].

There’s also another dimension to be considered here

too. Alistair Woods - Director of Reward at PWC has

seen an increasing trend for immediate feedback as

Generation Y join the workplace. The Twitter

generation want it short, snappy and now. Get it

right and you’ll strengthen your engagement with this

ever expanding generation within the workforce.

Technology has a role to play here. There are now a

number of apps that facilitate real-time feedback. If

intelligently adopted; they could strengthen the connection

between co-workers regardless of location.


“ILM found that while 69% of manages believed they were giving real-time feedback, only 23% of employees agreed”



One other factor to be considered in a move towards

healthier and more productive feedback is that training

support should be given to those who will receive feedback

(i.e. everyone) so they take it productively. Focus should be

on “reflecting” rather than “reacting.” This is where some

degree of basic Emotional Intelligence (EQ) training in self-

awareness and self-management would be valuable.


Focus should be on “reflecting” rather than “reacting.”






vi. Focus on feedback and developing capability for future performance

Feedback is nothing new. It’s long been prescribed

by management experts and Human Resources

professionals as something most employees will

appreciate and benefit from. And if delivered

skilfully, they are correct to say so. The problem is

that the majority of feedback is delivered with the

skill and dexterity of a sledge hammer and so causes

the opposite reaction to that which was hoped for.

This is where even the most well-intentioned of

managers can fall foul of the threat and reward response

discussed earlier.

Research has found that even the anticipation of receiving

feedback can trigger our threat response and limit vital

resources like objectivity and reflection - key when working

out what to do with some feedback we’ve just received.

However, just a subtle shift in emphasis from “this is how

you are” to “this is how you’ve done” can cause the

feedback to be received far more positively and

constructively. The first statement labels the individual -

which reinforces the “fixed mindset” - whereas the second

labels the behaviour which can be changed and developed -

which reinforces the “growth mindset.”


“Research has found that even the anticipation of receiving feedback can trigger our threat response”



Hand-in-hand with looking back at what the individual has

achieved should be a discussion around their on-going fit

for the role and their future capabilities. This goes beyond

what training needs they may have, and should explore how

aligned they continue to be with the values and vision of the

business or organisation. It’s likely that managers will

benefit from some structure, support and training in having

this conversation as it will require a degree of insight and

potential challenge. However, it can reveal highly valuable

information about how engaged and connected the

individual feels. Juniper discovered that 65% of those who

were found to have low alignment to the organisational

values self-selected themselves to exit the business based

on their forward looking on-going fit conversation.


Take a look at Appendix 1 for a great, easy-to-use framework when giving both positive and negative feedback which is grounded in psychology and neuroscience and comes from Graham Winter - Psychologist to the Australian Olympic Team



vii. Lose numerical ratings & forced rankings and link reward to the value they create

Rock found that labelling most people with a number

invariably causes a negative hit to fairness, and leaves them

disengaged from any attempt to further the performance

conversation [7]. It can easily come from the knowledge

that others have scored higher or that they feel their

contributions and achievements haven’t been recognised.

I believe the approach Juniper takes (see insert on page 30)

is worthy of merit. A judgement is made on whether the

employee is a “J-player” or not. This involves them being

assessed against the values and behaviours Juniper looks for

in all of its people. This brings focus to how work is done -

often overlooked in traditional PM and also a major

potential source of competitive advantage. They have

designed their process to help them “assess by identifying

value, not a performance score.” The output of this feeds

into a calibration process where managers individually

create a relative ladder of their people which they have to

validate with their fellow managers in their peer group.

The absence of a rating forces managers to become clearer

in their judgements and increases the quality of the

feedback to individuals. The peer group of managers also

score each other on how well they practiced Juniper’s values

throughout the laddering process. This ensures it doesn’t

turn into a hidden ratings exercise.

Juniper then provides pay guidance to managers based on

positions achieved within the ladder. However, managers

have full discretion to determine compensation within their

budgets.


“…assess by identifying value, not a performance score”



It’s interesting to see how Juniper have linked their

definition of performance to pay. Other factors that should

feed into the setting of the pay budget are: how essential

the employees skills are to the business; the cost of

replacing them if they left; their value to customers; and

what the conditions are in their sector of the job market.

By making compensation decisions reliant on the outcomes

of an annual appraisal conversation, you are allowing a high

level of anxiety to build (because a threat to the certainty

domain is being triggered) - far more than is necessary. This

creates precisely the wrong type of internal dialogue for the

employee and shuts down vital attributes that modern

businesses claim to value like creativity and balanced

thinking.

Forced rankings (where managers are instructed to assign a

fixed proportion of their people into various percentile

ranges often with the lowest being sacked) drive a massive

threat hit into certainty and fairness. The often ruthless

nature of this approach leaves employees fearing they may

directly lose their job because of their rating. This practice

generates a dog-eat-dog culture and couldn’t do more to

destroy good team work and collaboration if it tried!

Forced rankings became popular in the 1980’s under

the auspices of the likes of Jack Welch at GE with his

Vitality model. As a practice, they represent the most

damaging element of traditional PM practice and

should be disbanded by any organisation seeking

high levels of sustained performance. It’s

encouraging to see those previous staunch advocates

of forced ranking (like Ford and Microsoft) are leading

the way with its removal and replacement. [11]


“…making compensation decisions reliant on the outcomes of an annual appraisal …creates precisely the wrong type of internal dialogue for the employee and shuts down vital attributes that modern businesses claim to value like creativity and balanced thinking”




How Juniper do PM

They hire and encourage employees in four ways:

Career plans - look for “J players” (those who demonstrate the values & behaviours of Juniper)

Connections - how do they connect with the work?

Capabilities - what can they add/build?

Constraints - what’s stopping them?

Their performance system is made up of four principles:

Goal alignment - ensuring a direct line-of-sight between individual and business goals

Relative laddering - peer-manager calibration of an employees contribution to Juniper, rather than validating a performance score

Compensation - broad pay guidance provided to managers for each employee based on the relative laddering process along with full discretion to determine compensation within budgets

Conversation day - a twice yearly event which focusses on future career & potential contributions first before looking at current connections and contributions






viii. Don’t over engineer the system

Ensure that any performance system or process you develop

is simple, agile and transparent. These three principles

make sound business sense on both a practical and an

emotional level. Simplicity is essential because you want to

encourage buy-in and that will be easier if people can grasp

the new approach you decide to take with PM.

Agility is vital because only those organisations/businesses

keeping up with and responding to change will be high

performing. The world can look very different in just twelve

months which makes the traditional PM cycle obsolete.

Transparency is valuable as it helps to build trust. If a

frontline employee can see what the senior manager’s goals,

measures, results and rewards are, then fairness is likely to

be positively rewarded.

As previously mentioned, poor systems design can drive the

wrong management behaviours and severely limit employee

performance. I believe there is no reason why intelligent

systems design can’t drive the right behaviours.


“Ensure that any performance system or process you develop is simple, agile and transparent”



ix. Don’t ignore under performance

There’s no escaping the reality that not everyone is going to

step up to the mark. Even your best recruits can have a shift

in priorities. In this event, there still needs to be a

structured approach to giving them the opportunity to

receive support to help them back on track. However, this

should be time-limited and bound by clear and measurable

development objectives so that if this doesn’t work, then

dismissal can be effected quickly. If a person is wrong for

the business or organisation, then it’s in the best interests of

all parties that the relationship is brought to an end at the

earliest opportunity.

If this process is regarded as being transparent and fair then

it can still have a positive impact on culture, as those seeing

others go through it are likely to recognise it for its fairness.

A reluctance to address underperformance is likely to have

the opposite effect. The risk is that those who believe they

are performing may develop a sense of unfairness as they

see themselves as carrying others, or receiving the same

rewards as those who are under performing. The

consequence is that an overriding perception of

unfairness develops, internal dialogue takes a hit and

morale and motivation are damaged.




The days of command and control as a default approach to management are over - particularly in the skilled sectors of the economy. Employers who fail to appreciate this and get to grips with not just the way their managers manage, but also the organisational culture and the systems that underpin performance, will never be high performance.

A key motivator for businesses has been the battle for great

talent - attracting and then keeping great people. Five years

ago, a business with 10-15 employees wouldn’t have

felt the need to give any real time to thinking about

how they keep their best people - that used to be

just a challenge for bigger companies. Some sectors

that we work with - like web-design and digital

businesses - find that if they don’t do this, their

businesses will literally collapse from lack of resource.

It’s that simple!

I believe managers need to be consciously creating

an environment in which people can perform at their

best. They can do this by focussing on the nine

elements suggested in this paper which will help

them create a great mindset within their people and

across the wider business which is supported by an

intelligent system that encourages the right behaviours.

The great news is that we are now in a time where

management has more help, insight and support than ever

before. Coming from both those experienced in

implementing new approaches (and are willing to share) and

allied to the research that’s emerged from neuroscience, the

case for a revolution in PM comes down to one simple fact: it

makes sound business sense.


Summary & conclusions



I believe we are at a pivotal moment in the way management

best practice is evolving in organisations and businesses. The

scientists and researchers have been advocating change for

over a decade now. Inevitably, it takes employers time to

understand, digest and assimilate new ideas. That we are now

seeing major change in both large corporations and smaller

agile enterprises indicates the evolution is picking up pace.

While there is huge progress to be made, I believe that in

10-20 years we will have seen a pivotal change in the way

individual performance is generally managed. Commercial

pressures alone will not allow businesses to continue with poor

quality PM, and neither will their people, as workforces

become more fluid and mobile.


“I believe we are at a pivotal moment in the way management best practice is evolving in organisations and businesses.”



The bottom line is, if you want great people, you’re going to have to work hard to attract them and even harder to

keep them. PM can be a major tool to help you do that, so seize the opportunity before your competitors do!


Almost everyone has experienced Performance Management, so almost everyone has an opinion

about it and a story to tell. After all, it’s one of the most emotive aspects of modern working life.

That’s why we love talking to business owners, leaders and HR professionals about Performance

Management. Nothing makes us happier to help a business improve its results and create a more enjoyable and engaging culture for its people.

If you’d like to explore how you could approach this, or to try out our best-practice assessment, please get

in touch.



Roger Longden is a practising leadership and management

coach who works with clients ranging from agile & innovative

tech businesses up to large commercial and public sector

organisations. Prior to that, he enjoyed an extensive career in

IT where he held a number of strategic, operational and sales

roles. He is no stranger to challenge, having worked in some

of the most demanding work environments imaginable ranging

from prisons and remand centres to the offshore oil industry.

He is a visiting lecturer in Performance Management at the

Business School at Manchester Metropolitan University, a

Partner in There be Giants and recently co-lead the UK’s first

NeuroBusiness Conference.

He is also a rowing coach and enjoys translating the principles

of great performance management into sport.

He can be contacted via:

[email protected]

07791147556


About the author



mailto:[email protected]

Graham Winter - Psychologist to the Australian Olympic Team -

recommends a very simple model to set up the best

environment for feedback to have good impact. It both sets

the expectation that feedback will be given and then smooths

the way for it to be delivered effectively [10]. He suggests the

relationship is initially primed by using GET:

Goals that are shared

Expectations about behaviour

Trust to be open and honest

Discussion about shared goals helps to encourage alignment

and is an opportunity to check they are well formed.

Discussing expectations should help to avoid any assumptions

about what’s required and how it should be done. Trust isn’t

something that can be instantly generated. However, if both

parties work on being approachable, open, dependable and

act with integrity, then that’s an excellent basis on which to

build it.

For the feedback conversation itself, Winter suggests REAL for

corrective feedback and RITE for positive reinforcement

feedback.

These are simple yet effective tools which are routed in both

psychology and neuroscience. Both can have a big impact on

the quality of a performance conversation.


Appendix 1




REAL - Corrective feedback

What Really happened? - be objective and remove judgement

What was the Effect? - ask them if they know what the impact was and if not, outline it without exaggerating

Ask them if they can see how their actions contributed to the impact and how they will do it differently next time?

Lift them by leaving them with an encouragement and reinforcing your confidence in them and their abilities

RITE - Positive reinforcing feedback

What did they do that was Really positive?

What was the Impact of their positive action

Thank them for doing this

Encourage them by asking what they need to repeat it



[1] - “Beyond the Bonus” The Institute of Leadership and

Management

[2] - “The World is Flat … and So Are Leadership Competencies” by

Kenneth De Meuse, King Yii Tank, Kevin Mlodzik, and Guangrong

Dai. A Korn Ferry International Research Foundations paper. This

survey research was conducted in 2008 and 2009.

[3] - “Performance management is broken” by Lisa Barry, Stacia Garr

& Nany Liakopoulos, Deloitte University Press 2014

[4] - ‘Transforming performance management’ research which

interviewed 97 large organisations and 1,038 employees in

organisations of over 1,000 employees or £100m annual turnover.

The research was carried out in June 2015.

[5] - “Accenture CEO explains why he’s overhauling performance

reviews” - Lillian Cunningham, The Washington Post, 23rd July 2015

[6] - “Unleashing Human Potential for Performance & Profit” Richard

Barrett, Barrett Values Centre

[7] - “Kill Your Performance Ratings” David Rock, Josh Davis and

Beth Jones, Strategy & Business Journal, 08/08/2014

8] - SCARF - David Rock, NeuroLeadership Journal, Issue 1 2008

[9] - “The Games People Play” - Eric Berne,

[10] - The Man Who Cured the Performance Review - Graham Winter,

Jossey Bass, 2009

[11] - Vitality Curve - Wikipedia - https://en.wikipedia.org/wiki/

Vitality_curve

{12} “CEB Juniper Case Profile” The Corporate Executive Board

Company, 2012


References




www.therebegiants.com [email protected]

@ThereBeGiants

Manchester, UK





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