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Dynamic performance managementHow to deliver more, with less, forever

2 © The Mind Gym Ltd.

Meet The Mind Gym

1 Customerserviceprogrammewithhelpdeskagents,engineers,supportstaffandteamleadersatleadingtechnologyfirm(MaytoJune2010).2 Grass-rootsinterventiontoengage3,000managersinmissionandvisionoflargeenergyfirm(MarchtoSeptember2010).3 CustomisedsalessummitwithNewBusinessteaminUK-widedistributioncompany(April2008).4 Seriesofbite-sizeworkoutstohelpcolleaguesdealwithalargerestructureinoneoftheUK’sforemostelectricalretailers(May2005).

The Mind Gym transforms performance by changing the way people think.

Recentlywehavehelpedourclients,suchasAccenture,BritishGas,O2andPfizer:

•Increasecustomersatisfactionby13%(comparedto6%increaseincontrolgroup)1

•Liftemployeeengagementby26%2

•Boostvalueofopportunitiesinsalespipelineby47%3 •Improveemployeeretentionby20%4

Wehaveworkedwithover40%ofFTSE100companiesandatanyonetimeweareworkingwithmorethan25%ofthesetodelivertransformationalimprovements.

FormoreonwhatTheMindGymcandoforyou,pleasevisitwww.themindgym.com or call us on UK:+44(0)2073760626orUS:+16464955081.

1© The Mind Gym Ltd.

The magic bullet

Therearefewwin-winsleftinthemanagementtoolbox.Dynamicperformancemanagementisone of them.

Theresearchisunequivocal.Whenitcomestoreturnonequity,revenuegrowth,profitabilityandemployeeturnover,performancemanagementdeliversremarkableresultsfornexttonoinvestment.Butonlyifit’sdone well.

Bad performance management costs a lot and delivers little. Why? Managers focus on forms, systems and processes. What they need to focus on is the quality of their conversations.

Dynamic performance conversations

AtTheMindGymwe’veanalysedover50independentacademicstudies,consultedleadersinadozenleadingbusinesses,5anddrawnfromthelessonsof10years’workwith40%oftheFTSE100toidentifythefivevitalingredientsfordynamicperformanceconversations:

Dynamicperformancemanagementisgroundedinscience,backedbypracticalexperienceandeasy toimplement.Evenbetter,itneedn’tcostapenny.

So how can you get it?

TheMindGymcanhelp.Ourwhitepaperoutlines:

Thebusinesscasefordynamicperformancemanagement Page 2Areadyreckonertoseehowyourorganistionisalreadydoingagainst thefivekeyingredients(alsoavailableonline) Page 4Thefivekeyingredientsexplained Page 7Abestpracticetemplateforperformancemanagementprocess Page 27Aguideonhowtoimplement Page 29

Read on and transform performance management in your company from dysfunctional to dynamic.

Executivesummary

5 ReckittBenckiser,BankofNYMellon,EDFEnergy,Homeserve,Starbucks,Rothschild,O2,Xerox,SSP,Wates,MaceGroup.

Stretchinggoalswithfortnightlyfeedback

Consistent differentiation

Commercial coaching

Jobcrafting

Employeestakeresponsibility


Thebusinesscase

Top performers do it

Anemployeewhogetsaperformancereviewmorethanonceayearisthreetimesmorelikelytoworkforatopperformingcompanythanforoneoftheweakerbrethren.

Indeed,onalmostallcommercialmeasuresincludingreturnonequity,revenuegrowthandincreaseinnetincome, the strongest performing companies are much more likely to have dynamic performance management (fig.1).

Inaddition,arecentsurvey7of5,560HRandbusinessleadersfrom109countriesfoundthatperformancemanagementwasrankedthesecondhighestHRcapabilitybyhighperformingcompanies(asmeasuredbyrevenueandprofitabilitygrowth),butonlyninthbylowperformers.

Butit’snotjustcompaniesthatbenefitfromdynamicperformancemanagement.Customersandemployeesaresignificantlybetterofftoo(fig.2).

Figure 2: Impact of Dynamic Performance Management on employers and customers.

Figure 1: Performance management practices according to financial performance.6

100%

80%

60%

40%

20%

0%

Perc

enta

ge

of c

omp

anie

s

Weaker financial performance

Review employee performance more

than annually

Have a systemthat identifies

high-potential people

PM system coversall managers and

some below

Every manager has goals aligned to

company strategy

Stronger financial performance

6 Fitz-enz,J.(2007)“FinancialimpactofHRM”,WorkforceIntelligenceInstitute.7Strack,R.,Caye,J-M.,Lassen,S.,Bhalla,V.,Puckett,J.,Espinosa,E.,Francoeur,F.,Haen,P.(2010)CreatingPeopleAdvantage:HowCompaniesCanAdaptTheirHR PracticesforVolatileTimes,BostonConsultingGroup&WorldFederationofPeopleManagementAssociations.8Mortimer,M.(2006),“PerformanceManagement:WorkWorthDoing”,QuintilesTransnational&SuccessFactors.9Becker,L.(1978)Jointeffectoffeedbackandgoalsettingonperformance–Field-studyofresidentialenergy-conservation,JournalofAppliedPsychology63:428.

Drop inemployee turnover8

Rise in employee engagement8

65%

Growth incustomer loyalty8

18%

25%

Boost toproductivity9

15%


Breakthrough performance

Employeeswhosemanagersexcelatpeopledevelopmentperform25%betterthanthosewithmanagerswho struggle with developing others.1016%oftheimpactisattributeddirectlytothedevelopmentofanindividual’sskillsandcapability.Theother9%comesfromamorepositiveattitudebecausetheindividualfeels that their manager is investing in them.

TheFBI’sChiefLearningOfficer,JamesTrinka11conductedastudyonwhatdifferentiatestheabsolutebest(and their managers) from the rest.

Managers are short on time and resources, Trinka mused, so what are the small activities that make the biggestdifferencetotheirteam’sperformance?Armedwith80,000datapoints,hediscoveredthatonlyfiveoftheGallupQ12™predictedbreakthroughperformance.

Thesefiveareallrelatedtofeedback,coachingandcareerdevelopment–criticalelementsofdynamicperformancemanagement:

Q4 Inthelastsevendays,Ihavereceivedrecognitionorpraisefordoinggoodwork.Q6 There is someone at work who encourages my development. Q12 Thislastyear,Ihavehadopportunitiesatworktolearnandgrow.Q11 Inthelastsixmonths,someoneatworkhastalkedtomeaboutmyprogress.Q7 Atwork,myopinionsseemtocount.

Dynamic performance management is also crucial to the success of every other people investment. Getitrightandyou’llmultiplyyourreturnoneverythingfromlearninganddevelopmenttorecruitment,compensation to employee communication. Get it wrong and the most pioneering talent, leadership and graduateprogrammesintheworldwillseetheirhalf-lifecollapsetojustafewweeks.Infact,youmightaswellnotbother.

Increased performance

My manager is poor at performance management

My manager excels at dynamic performance management

More positive attitude because individual feels their manager is investing in them

Development of individual25%

Figure 3: Performance improvement due to line manager’s ability at people development.

10CorporateExecutiveBoard,2006.LearningandDevelopment2003EmployeeDevelopmentSurvey;LearningandDevelopmentRoundtableresearch;HRleadership Council research.11 Trinka,J.(2005),IndustrialandCommercialTrainingVolume37Number3.


Whatweshoulddoandwhatweactuallydocanbeworldsapart.Tofindouthowyourorganisationfaresagainstthefiveingredients,takethefollowingassessmenttogetanimmediateindication.

Thinkaboutwhatyourpeopleactually do today to identify how dynamic performance management already is in your organisation.

How many individual contributors:

Havegoalsthatarewrittenandmeasurable

Canexplainhowtheirgoalsfitwithcompanystrategy

Have at least fortnightly conversations with someone relevant to discuss their performance

Feelthattheyreceivethreetimesasmuchpraiseascriticism/‘improvement’feedback

Know what they need to do to get a top performance rating

AreNOTsurprisedbywhattheylearnintheirannualreview

Believe that their manager assesses performance in the same way, regardless of their mood

Believetheirmanagergivesthemplentyofusefulguidanceonhowtoperformbetter

Believetheirmanagergivesthemvaluable,impartialcareeradvice

Knowtheircareeropportunitiesinthecompanyforthenext12-24months

Givefeedbacktotheirpeers

Proactivelyasktheirmanagerforsupportandcareerguidance

Believetheyareasresponsibleastheirmanagerforthequalityofperformanceconversations

Feelthattheirfutureatyourorganisationlooksbright

0-24%

25-49%

50-74%

75-100%

01

02

03

04

05

06

07

08

09

10

11

12

13

14

How many managers:

Usemorethanhalftheavailableannualperformanceratingsacrosstheirteam

Discussproposedperformanceratingswithothermanagersfirsttoensureconsistency

Spendmoretimesharingidealfutureperformancewithteammembers,thanreviewing past performance

Afteranycoachingconversation,agreespecificactionsandfollowupwithintwoweeks

Stretchtopperformersto‘excellent’ratherthan‘verygood’performance

Haveconversationsaboutunderperformancewithintwoweeksoffirstnoticingit

Encourageteammemberstoshapetheirrolesbasedontheirstrengths

Activelypartnerteammemberswithdifferentbutcomplementaryskills

Feelcomfortablediscussingcareeroptionsoutsideoftheorganisationwithhighperformers

Sellthebenefitsofperformancemanagementtotheindividual(e.g.growfaster,enjoywork)

15

16

17

18

19

20

21

22

23

24

Doyouhavethemagicbullet?


Ifyouscore60orabove,yourperformancemanagementisdynamicanddeliveringyoubusinessresults.Calculateyourindividualingredientscorestoseewhereyoucancontinuetobuildonthissuccess.

Ifyourscoreis59orbelow,therearekeypracticalthingsyoucandotomakeyourperformancemanagement more dynamic. Calculate your individual ingredient scores to see which ingredients you need to stock up on.

Individual ingredients score

Adduptheweightedscoresyougotforeachingredient

Add up the total number of ticks in each column

Multiply the number of ticks by these weightings 0 1 2 3

Total for each column (number of ticks x weighting) 0

Add up the three final boxes to give your total performance score (out of 75)

Ingredient

Stretchinggoalsandfortnightlyfeedback


Commercial coaching

Jobcrafting


Questions

1, 2, 3, 4, 25

5, 6, 7, 15, 16

8, 17, 18, 19, 20

9, 10, 21, 22, 23

11, 12, 13, 14, 24

My total score on these questions (out of 15)

Ifyouscore11orlessinanyoftheingredients,thisaspectcouldbenefitfromaboost.

Youranswersheregiveyouagoodestimateofwhatishappening.Ifyouwanttherealpictureofhowdynamicperformancemanagementisinyourorganisation,thisassessmentisavailableonlinetosendouttoallofyourindividualcontributorsandmanagers.

How many managers’ managers:

Check on the frequency and quality of review conversations25


Stretchinggoalswithfortnightlyfeedback

This element of dynamic performance management has a more direct and immediate effect than all the others.It’salsotheeasiesttograsp.Allmanagersneedtodois:

• Setgoalsthatstretchbutdon’tstrain• Givefrequentfeedbackonperformanceagainstthesegoals

It’sreallythatsimple.Andthere’splentyofevidencetoshowthatitworks.

Experiment #1

Chhokar and Wallin monitored the safety performance of employees in a factory over a 10-month period. Therewerethreephasestothestudy:training,goalsetting,andfeedbackofdifferentfrequencies.Anemployeewasconsideredtobeworkingsafelywhentheyscored‘safe’on100%ofthebehaviouralsafetyitems on a checklist.

Trainingandgoalsettingboostedemployees’performancebutthesetgoallevelwasonlyreachedafterfeedbackwasprovided.Evenmoreinterestingly,thefeedbackwasjustaseffectivewhenitwasgiveneverytwo weeks as every week.

Figure 4: Impact of fortnightly feedback on performance.12

Baseline

Safe

ty p

erfo

rman

ce (%

)

Weeks

Training & goal setting

Feedback once a week

Feedback once in two weeks

Training & goal setting only

Feedback once in two weeks

12Chhokar,J.&WallinJ.(1984)Improvingsafetythroughappliedbehaviouranalysis,JournalofSafetyResearch14(4).


Why not once a month?

ChokarandWallinthentestedwhetherfeedbackcouldbegivenlessfrequentlythanonceafortnightwithoutaffectingperformance.Whentherewasnofeedbackforfiveweeks(betweenweeks27and32)thesafetyperformancedroppedby17%,eventhoughthetrainingandgoalsettingcontinued.Thisgivesastrongindicationofwhathappensiffeedbackisgivenonlymonthly.Figures1and2(earlier)showthefinancialimpactofgivingfeedbackonlyannually.

Experiment #2

Householdsweresetatargetforimprovingtheenergyefficiencyoftheirhome.Halfweresetatargetof20%improvement,theotherhalf2%.Eachgroupwasfurthersplitintotwo:thosewhoreceivedaregularvisittobetoldhowtheyweregettingonandthosewhowerelefttotheirowndevicesuntiltheendof the trial.

Theresultsareemphatic(seefig.5).Thegroupwiththestretchinggoalandthefrequentfeedbackdelivereda15%improvement.Thenextbestwasjustunder6%.

What does a good goal look like?

Forgoalstobeeffective,weneedtobeabletoagreewhethertheyhavebeenhit,exceededormissed.Thatmeanstheyarespecificandmeasurable.

Somerolesareeasiertomeasurethanothers.Salespeopleusuallyhaverevenuetargetsoratleastcallandconversionrates;incallcentresthemeasuremaybeaveragecalltimes.Customerservicecanbemeasured,thoughlessrobustly,withmysteryshoppersandsurveys.

Whentheoutputislesseasytodefine(aPRrolewhichisaboutkeepingthecompanyoutofthemedia),orthecausallinkmoreblurred(theimpactofajunioradminroleonclientserviceandrepurchasing),itcanbehardertoagreeonmeasurablegoals.

Inthesecasesweshouldimaginewhatlifewouldbelikeifthejobwasbeingwellorpoorlydone.Theseimaginingscanthenbeturnedintoindicativefigures(percentageofjournalistenquriesthatendedupinpublishedstories).Theycanalsoincorporatetheviewsofothers.

Figure 5: How performance varies with different goals and feedback.13

13Becker,L.(1978)Jointeffectoffeedbackandgoalsettingonperformance–Field-studyofresidentialenergy-conservation,JournalofAppliedPsychology63:428.

16

14

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10

8

6

4

2

0

-2

-4

Impr

ovem

ent (

%)

20% goal with frequent feedback

2% goal withfrequent feedback

20% goal withno feedback

2% goal withno feedback

Becker (1978)


Theseinternalcustomer/peer/bossviewsaremostvaluablewhensupportedbyexamples.AnITsupportmanagermayhaveagoalaboutpercentagetimethesystemwasfunctioningandthespeedofresolutionforqueries(bothmeasurable),butcouldalsohaveagoalaboutthepercentageofemployeeswhofeelthattheyhavetheITequipmenttodotheirjobwell,supportedwithexamplesofwhenitdoesand,morecritically,does not deliver.

Give praise: a racing certainty

Whenitcomestochangingbehaviour,thenearestthingtoaracingcertaintyispraise.Tellsomeonespecificallywhattheydidwellandtheimpactithadandtheyareverylikelytorepeatit.

ResearchbytheCorporateLeadershipCouncil14foundthatfairandaccurateinformalfeedbackincreasesperformanceby39%,andformalreviewswithanemphasisonstrengthsincreasesperformanceby37%.Incontrast,formalreviewsthatemphasiseweaknessesdecreaseperformanceby27%,andregularinformalfeedbackwithanemphasisonweaknessesdecreasesperformanceby11%.

AccordingtotheLosadaratio,15 the average, ideal ratio is three pieces of praise for one piece of constructive feedback,althoughthiswilldependontheindividual’spsychologicalmake-up.Asarule,it’sbettertoerronthe side of over-praising (most people only take in a proportion of the praise they receive).

Stretchinggoalsandfrequentfeedbackarethe101ofdynamicperformancemanagement.Alone,theywilldeliversignificantproductivitygains.However,togetfullvalue,you’llneedmore.

14Corporateleadershipcouncil(2002)BuildingtheHigh-PerformanceWorkforce,CorporateExecutiveBoard.15Fredrickson,B.L.&Losada,M.(2005).AmericanPsychologist,60(7)678-686.Positiveaffectandthecomplexdynamicsofhumanflourishing.

Figure 6: Showing optimal ratio of praise to counsel.

1:5Typical

3:1High performance

13:1Praise overdone

Negative interaction

Positive interaction


Giving responsibility

JustGiving,theUK’sfirstonlinefundraisingwebsite,hasdoubledthesizeofitsteaminthe UKandUSinlessthan12months.

Theseniorleadersandinvestorsstronglybelievethatinordertokeepinnovatingandfindingnewwaystomakedonatingeveneasier,theyneedaculturewhereeverybodybehaveslikeanownerofthebusiness.TheDNAofthiscultureisfrequent,fearless,honestfeedbackgiveninthemomentbyall.Teamsareencouragedtodedicateaportionofanymeetingtofeedback,sothatthereisusuallynoneed for separate, lengthy one-to-ones with managers.

Eachpersonisencouragedtothinkaboutwhattheyneedtodotoexcelintheirroleandaddvaluetothebusinessinthenextthreetosixmonthsandkeepthattohandonasimpleone-pager.Aspartofthis,eachpersondecideswiththeirteamleaderwhattheirindividualcontributionwillbetotheirteamgoals,whichinturnareclearlylinkedtothebusiness’strategicpriorities.Inafast-paced,entrepreneurialenvironment,businessprioritieschangeconstantlyandpeopleareencouragedtoadaptandflextheirobjectivesinresponsetothis.Nogenericcompetencyframeworksorrigidjobdescriptions here.

Itistheindividual’sresponsibilitytochoosethethreeorfourpeoplethatwillbeabletogivethemthemostvaluablefeedbackontheircontributionforthenextsixmonths(peers,customers,charitiesandteamleaders).Atthestartofthereviewperiodtheindividualcontactstheirfeedbacksources,attachingtheirgoalone-pager,andasksthemtogiveregular,in-the-momentfeedbackontheirprogressagainstthesegoals,aswellasashortwrittensummaryattheendofthesixmonthperiod.Thereviewer’sformconsistsofsimply:hits,misses,strengthsandareasfordevelopment.Muchlesstimeonformfilling,muchmoretimespentonrichreviewconversations.

Sinceimplementingthisapproach,JustGivinghasseenasignificantincreaseintheirkey engagementindicators:

Figure 7: Increase in engagement metrics at JustGiving after implementing dynamic performance management

JustGivingbelievethatitisnottheirroletomotivatepeople,theyspecificallyhirepeoplewhoareself-motivated.Hence83%ofallemployeestookresponsibilityfortheirowndevelopment,evenbeforedynamic performance management was introduced.

30% 40% 50% 60% 80%70% 90%

I feel I get regular, constructive feedback on my performance

I understand how my performance is measured

I had the opportunity to learn and grow in the last 6 months

I have the opportunity to do what I do best

I take responsibility for my own development

39%

68%

39%

63%

61%

70%

64%

81%

83%

85%

100%90%80%70%60%50%40%30%

Before dynamic performance management introduced 6 months later



It’s not fair

‘Fair’isoneofthosewordsthatmeanswhateveryouwantandsoendsupmeaningnothingverymuch.

Isitfairertogiveapayrisetothebestperformer,thehardestworker,thelongestserver,themostloyalambassador,thepersonmostinneed,thepersonwhohasgonelongestatthesamepaylevelorthepersonwho’sbeenpromisedapayrise?Thereisnoanswertothisquestionthatwillnotupsetsomeone’ssenseoffairness.

Insteadof‘fair’,whichisinterpretedthroughtheeyesoftherecipient,weprefer‘just’–asinconsistentandjustifiedaccordingtotherulesandmoresofthepeopleadministeringit.

‘Just’performancemanagementmustmeetthreecriteria:

01 Guided differentiation02 Consistentratingsirrespectiveofwho’sgivingit03 Manager’smooddoesnotimpactscore

Equally,thisisnotthewholeanswer.Thereisanunavoidabletensionbetweenjusticeandmercy.Mostpeoplewantclearrulessotheyknowwheretheystandandareconfidenttheirpeerswon’tbegettingpreferentialtreatment.Buttheyalsowanttobetreatedasanindividualandhavetherulesbentfortheirparticularneeds(“Ican’tbelieveafterallI’vedoneforthiscompanytheycan’tshowanyflexibility....”).

Optimalperformancemanagementconversationsarebasedonjusticebutgivemanagersthelatitudetoshowmercy.Thedegreetowhichtheycandothiswillvarybycompany,roleandfunction.Thegreaterthesystemdeliversonthethreecriteriaforjustice,thegreaterthecapacityformanagerstoshowmercywithoutundermining performance.


Social loafing

Socialloafingisaperniciousvirusthatmaywellbespreadingacrossyourteamasyouread these words.

Itoccurswhensomeonefeelsthatothersaremakinglesseffortthanthemandaregettingawaywithit.Maybetheyaren’tchasingtheirsalesprospectsashard,oraresloweratgettingbacktocustomers.Critically,theirmanagerdoesn’tappeartohavenoticedtheunderperformanceandsothey are no worse off as a result.

Gradually,thosewhowereworkinghardstarttoeaseoff:“Ifshe/hegetsawaywithit,whycan’tI?”Asothersfollowtheslacker’sexample,theslackeristheninclinedtoeaseoffevenmore(tomaintain the differential) and the downward spiral of effort continues.

ThisphenomenonwasinvestigatedbyNorbertKerrandStevenBruun.16 They asked people to pump air through a container to create a certain level of pressure. The participants who worked on theirownweresuccessfulonabout90%oftrialsandwererewarded.

Someparticipantsworkedwithapartnerwhoseperformance,unknowntothem,wasfixed.

Iftheparticipantfeltthattheireffortmadenorealimpact,astheworkofthe‘teammate’meantthattheyalwaysgotthereward,theybegantomakelesseffortandtheirperformancefellby25%.

Conversely,iftheir‘teammate’appearednottobepullingtheirweight(freeriding),theparticipantfeltlikeasuckerandwouldeaseoff.Thisalsoledtoa25%dropinperformance.Interestingly,thefallinperformancewasmuchlessiftheythoughtthe‘teammate’wasfailingduetoalackofabilityrather than a lack of effort.

Themosteffectivevaccineagainstsocialloafingisdynamicperformancemanagement,withaparticularfocusonconsistentandjustdifferentiation.

16Kerr,N.L.,Bruun,S.E.(983)Dispensabilityofmembereffortandgroupmotivationlosses:Free-ridereffects.JournalofPersonalityandSocialPsychology.Vol44(1),78-94.


01 Guided differentiation: one size fits no-one

Wheneveryonegetsa‘3’ora‘meetsexpectations’,i.e.everyoneisequally‘great’,psychologistscallitthecentralitybias.17 The mean score is around the middle of the range and the standard deviation is small. This leadstoloweraveragelevelsofperformance(see,forexample,thepreviousexplanationonsocialloafing).PaulPolman,CEOatUnilever,recallsthatwhenhejoined“incentiveswerebasedaroundtheaverage.Ifyoulookatthelast10years,everyonegottheaverage,sothecompanywasaverage.Ournewsystemhasmoredifferentiation,sothereisahigherupsideandhigherdownside”.18

The negative effect on performance is even greater when this is supplemented bytheleniencybias,19 where managers tendtowardsthetopoftherange.Inthiscase the standard deviation remains low butthemeanishigher.Whenalmosteveryone receives a top grade, almost everyonewillmakesignificantlylesseffort in future.

Perhapsmoreremarkably,thesebiasesare as likely to occur whether the group ofindividualsbeingassessedhasverydifferentcapabilitiesorroughlythesame.Inaseparate‘laboratory’experiment,managerswerefoundtoscore people according to the same pattern (e.g. following a centrality or leniencybias)whetherthegrouptheywere assessing performed roughly the same as each other or radically differently. The actual performance made little if, any difference, to whether ornotthemanagerdifferentiatedinhis/her assessment. The cultural norms and what the managers were used to made all the difference.20

Whatever the assessment scores suggest, the evidence emphatically shows that not all employees are the same.

Aprofessionalwhoperformsatonestandarddeviationaboveaveragewillbe96%moreproductivethananindividualperformingonestandarddeviationbelowaverage.Infinancialterms,thisperformancedifferencewouldresultina£48,000yearlyproductivitybonus,basedona£50,000yearlysalary.21Outsidethecorporateworld,aseparatestudyrevealedthatthe10mostprolificcomposersproduced40%ofthe‘masterworks’inclassicalmusic.22

The‘onescoreforall’canbeinterpretedbyemployeesas(a)theleadershiplacksbackbone(b)thereisnobenefitinoutperforming(c)we’reallthesametothem.Nottheimpressionmostleaderswanttomake.So,ifwe want to raise performance we need to differentiate.

2 3 4 51

Centrality bias

2 3 4 51

Leniency bias

Figure 8: Demonstrating centrality and leniency bias. (Prendergast 1999; Bretz, Milkovich and Read 1992)

17Prendergast,C.(1999)TheProvisionofIncentivesinFirms,JournalofEconomicLiterature37(1).18Interviewin‘TheSundayTimes’8thAugust2010.19BretzR,MilkovichG,ReadW.(1992)Thecurrentstateofperformance-appraisalresearchandpractice–concerns,directionsandimplications, JournalofManagement18(2):321-352.20JohannesBerger,ChristineHarbringandDirkSliwka(2009)PerformanceAppraisalsandtheImpactofForcedDistributions.Anexperimentalinvestigation21Schmidt,F.L.,&Hunter,J.E.(1998).Thevalidityandutilityofselectionmethodsinpersonnelpsychology:Practicalandtheoreticalimplicationsof85yearsofresearchfindings, PsychologicalBulletin.22Moles,A.(1958).Informationtheoryandaestheticperception.Urbana,IL:UniversityofIllinoisPress.


I’m above average

Researchshowsthat80%ofusseeourselvesasaboveaverage.23Thisisaresultofthe‘self-enhancementbias’–thetendencyforusalltorateourselveshigherthansomeoneelsewould.While,ofcourse,itisstatisticallyimpossible,thisdoesposeachallenge:howdoItellhalfmyteamthattheyarebelowaveragewithout demotivating them?

Theanswerliesinfocusingthebelowaverageperformersonwhattheycandobetterandnotexplicitlycomparingthemtootherpeople.Theresearchdemonstratesthatonlyhighperformersaremotivatedbycomparisons with their peers.24 No surprise really.

Don’t force it

Acommondilemmaliesaroundwhethertointroduceforceddistribution.Forceddistributionentailsagreeinginadvancetheproportionoftheteam/division/companywhowillberatedineachcategory(oftenafivepointscale). Companies usually introduce this to make managers differentiate.

Itwillcertainlyprovideashocktothesystemand,ifanurgentchangeisneeded,maywellbetherightthing–researchsuggeststherearepositivegainsinthefirstyear.Butdon’tsticktoit.Inthemediumterm,performancewillbenegativelyaffectedbyarigidformofforceddistribution.

The optimal performance results come from consistent differentiation.

Thismeansthatdifferentiationinperformanceisrecordedwithdifferent‘scores’andthatthedecisionlieswiththemanager(andmanager’sbossandpeers–see‘inter-rating’,later).TheHRprofessionalscanthencollatethisdatatoseeifthecentralityorleniencybiasiscreepingin,andadvisedivisionalheadsaccordingly.Inmostcultures,thissofterapproachcanbeextremelyeffective.Youmightcallit‘guideddistribution’.

Explanation

Managerswhohaveveeredawayfromquantitativeratingsanddifferentiatingbetweendifferentlevelsofperformancetendtodosobecausetheywanttoavoiddifficultconversations.

But,sinceoneofthebenefitsofdifferentiationistostimulateanhonestconversationaboutperformance,it’svitalthatthemanagerbothtakesresponsibilityfortheassessment(avoidingcommentslike“Iwasn’tallowedtogiveyoutheratingIthinkyoudeserve”)andexplainsthereasonswhy.

Thebestmanagersdoitalready.Therestmayintellectuallyrealiseit’simportantbutkeepputtngofftheconversationsbecause,ratherlikestartingorstickingtoadiet,whilethepainisimmediate,thegainsarenot.

Thesolutionliesingivingmanagerstheknowledge,thetoolsandtheconfidencetohavethesepotentiallytrickyperformanceconversations,notjustatthemomentofassessmentbutonaregularbasis.Constantcommunication also means fewer surprises for the individual and so less trickiness come annual review time.

Thereareplentyoftoolsandtechniquestohelpconveyunappealingmessages(focusonspecificsratherthanidentity,keeptothefacts),aswellaswaystohandlerebuttals(‘that’snotfair…’)andemotionalfallout(tears,sulks).Mostmanagersdon’tknow(orremember)themandcoulddowithburnishingtheirskills(seeour programmes, later).

Oncethey’vebuilttheseskillsandtheirconfidence,differentiatingacrossdifferentlevelsofperformancewillbeoneofthemostusefulleverstheyhavetopull.

Assessmentbecomesunjustwhenitdependsonwho’sgivingitorwhatmoodthey’reinatthat particular moment.

23Hoorens,V.(1993)“Self-enhancementandSuperiorityBiasesinSocialComparison”inEuropeanReviewofSocialPsychology4,Ed.W.StroebeandMilesHewstone,Wiley.24WMcColskey,MRLeary(1985).ContemporaryEducationalPsychology.


02 “My manager’s meaner than yours”

Thebestwaytoachieveconsistencyacrossmanagersisinter-rating.Thisinvolvesgettingthosewhoaredoing the assessing in a (virtual) room together.

Eachmanagersuggestsaperformanceratingforeachmemberoftheirteamandexplainswhy.Thegroupthendebatesalltheindividualdecisionsuntiltheyagreethateachratingisfairincomparisonwiththeothers.

Thevalueofthisdiscussionisactuallyfargreaterthantheequitableperformancescoresthemselves,thoughtheyhavegreatvalueinthemselves.Theextragaincomesfromthesharedunderstandingamongmanagersofwhat‘excellent’and‘verygood’looklike.Thismeanstheycanbetterexplaindecisionstakenoutsidetheirspanofmanagementandtheyarelikelytogivemoreconsistentfeedbackduringtheyear.

Ideally,goalsarealsosubjecttointer-ratingtoensurethatthereisasimilarlevelofstretchforeachemployee. While this might seem time-consuming during a period already dominated with performance discussions (usually, the year-end review), given the importance of setting stretching goals and the role they willplayintheinter-ratingattheendofthesixmonths/year,it’saninvestmentthatwillpayoffhandsomely.

03 “My manager’s moody”

Moredamagingthandifferentmanagersmakingdifferentassessments,iswhenthemanager’sviewofperformance has little to do with the outcome and a lot to do with what he or she is feeling at that particular moment.Inthesesituations,thedifferencebetween‘jobwelldone’and‘startoveragain’canbedowntowhetherthemanagerhasjustcomeoutoftoughbudgetnegotiationorwonanewcontract.Farfromjust.

Oneofthemostsignificantcorrelateswithstrongperformanceamongpartnersinmanagementconsultancies is emotional self-regulation25(seefig.9).Theabilitytocontrolouremotionsisagreatstrengthinallpartsofourlives:itkeepsloverstogether,childrenfeelingsecureandextendsourlifeexpectancy.Intheparticularareaofperformancemanagementitisvital.Itmeansthatourteammembersfeelfairlytreatedbecausetheirscoreismorelikelytobebasedonwhattheyhaveachieved.

Figure 9: Impact of self-regulation on annualised profits for partners at a management consultancy firm.

Self-motivation

TP = the tipping point, the point at which the behaviour has been demonstrated sufficiently by a partner to create outstanding financial performance.

$2m

$1.5m

$1m

$0.5m

$0

Self-regulation Peoplemanagement

Cognitive

above TP below TP

25Boyatzis,R.E.(2006).UsingTippingPointsofEmotionalIntelligenceandCognitiveCompetenciestoPredictFinancialPerformanceofLeaders.Psicothema,18,124-131.


Commercial coaching

Performance improvedNeutral

38% disagree

34% neutral

28%

agre

e

Performance improvedAgree

11% disagree

34% neutral

55% neutral

Received coaching from AM

Performance improvedDisagree

100% disagree

Received coaching from AM

Figure 10: Impact of commercial coaching on performance in leading telecommunications firm (2010).

Thescienceofsalesisgoingthroughasignificantshift.Onceuponatime,salespeoplewouldsimplytalkaboutthebenefitsandfeaturesoftheirservices.Thenthependulumswungtoneeds-basedselling,wherethesalespersonwouldaskthecustomerabouttheirneeds.Theideawasthatthecustomerwouldrealiseoftheirownaccord,thattheywantedtheseller’sservice.However,needs-basedsellingispassingitssell-bydate(tobecoveredinalaterwhitepaper).

The most current thinking on sales effectiveness lies with commercial teaching. The salesperson guides the customerbypresentingwhattheythinktheproblemis(basedontheirextensiveresearch),beforetailoringitwiththecustomertosuittheirspecificsituation.

Coachingisgoingthroughasimilarjourney.Waybackwhen,managerswouldtellpeoplewhattheyshoulddodifferently.Thenthecoachingpendulumswungtheotherway.Themanagerwouldbarelyspeakexcepttoaskcoaching-styleopenquestions.Theymighthavegreatexpertise,butinthismodeltheywouldrarelyshow it.

Dynamicperformanceconversationsaremuchmoreinclinedtowards‘letmeteachyousomethingasyourmoreexperiencedmanager’.Incisivequestionsplayanimportantrolebutthemanageristherejustasmuchtobringinsightandproposesuggestions.

TheMindGymupskilled36areamanagersand384branchmanagersfromaleadingtelecommunicationsfirmintheartofcommercialcoaching.Mid-waythroughtheprogrammeweaskedthebranchmanagers:‘haveyoureceivedcoachingfromyourareamanager?’and‘hasyourperformanceatworkimproved?’Theresultsshowastrongpositivecorrelationbetweenthetwo.


Butofevengreaterinterestisthatintheperiodthatthecommercialcoachingwasrolledout,thebranchesabilitytohittheirrevenuetargetsrosebyawhopping29%(statisticallysignificantp<0.5).Otherbenefitsincludeda4%increaseincustomerexperienceanda7%increaseinthemid-yearengagementpulsescore‘thereissomeoneatworkwhoactivelyencouragesmydevelopment’(bothstatisticallysignificantrisesatp<0.5).

Future first

Thecoachingquestionswedoaskshouldbefocusedonthefuture.Future-focusedcoachinghasbeenshown to deliver results faster and more comprehensively than traditional coaching techniques.

Whileorthodoxcoachinggivesweighttowhathas/hasnotbeenachievedinthepast,andthelessonsthatcanbelearnt,future-focusedcoachingasksmanagerstoconcentrateontwoquestions:Whatwouldhappenif it did work? What steps do you need to take to get there?

Thereisplentytoexplorethrougheachquestionand,inmanycases,thegreaterthegranularitythegreaterthechancesofinsightandtransfer.I.e.theindividualreallyunderstandswhattododifferentlyandthen does it.

Entering into dialogue

Thereisacolloquialmeaningfor‘dialogue’:twopeoplehavingachat.Thereisalsoamuchmorespecific,psychologicaldefinition.Itisthissecondversionthatbringsararepower,intimacyandinsighttoperformance conversations.

Thepsychologists’26‘Dialogue’isaspecifickindofconversationthatallowsbothpartiestoexploreandunearthissues.Itinvolvesreciprocallisteningandspeakingwiththeexplicitintenttobuildasetofideastogether.Twopeoplewhoare‘indialogue’resistthetemptationtoattack,compete,orretreatwhenanewideaisintroducedbytheotherperson.Theydothisbylearningaseriesofskillsthatpromoteopenness andcollaboration.

The happy news is that those who are skilled at dialogue are healthier and have stronger immune systems.27

Evenbetter,fromaproductivityperspective,effectivedialogueisoneofthemostpowerfultoolsintheboxand will improve almost any performance conversation.

Dialogue,likemediationorplayingthedrums,iseasytodobadly.Thetricktodoingitwellliesinlearningthe skills, applying the techniques and practising a lot.

Increase in customer experience score

0% 5% 10% 15% 25%20% 30% 35%

Increase in ability to hit revenue targets

Increase in engagement: ‘there is someone at work who

actively encourages my development’

Average branch manager self and manager-rated performance

improvement (reduced to account for self-enhancement bias)

9%

7%

4%

29%

Figure 11: Increase in KPIs during 6-month period that The Mind Gym rolled out commercial coaching in leading telecommunications firm.

26Isaacs,W.(1999)DialogueandtheArtofThinkingTogether:APioneeringApproachtoCommunicatinginBusinessandinLife.BantamDoubledayDellPublishingGroup.27Kiecolt-GlaserJ,GlaserR,StowellJ.Perceivedstressandcellularimmunity:Whencopingcounts,JournalofBehaviouralMedicine,24(4):323-339.


28RollinsL,SlawsonD,SimS,GalazkaM.(2007)Usingasupervisorydialogueprocessintheperformancemanagementoffamilymedicinefaculty,FamilyMedicine38(3):201-7.29Kahane,A.(2004)Solvingtoughproblems:Anopenwayoftalking,listeningandcreatingnewrealities.

There’splentytomaster–morethanwecanpossiblyincludehere–butthesefivetipswillhelpsteeryouinthe right direction.

01Adopttherightmindset.You’reaimingforempathy,opennessandhonesty.But,most importantly,youmustreallywanttoachieveaproductiveoutcomeforbothyouandthe other person.

02Sharethefactsasyouseethemandexplainhowthesituationmakesyoufeel.Bereadyto debatethefacts–youmayhavethemwrong–butdon’tlettheotherpersondisregardor challengeyourfeelings.Iftheydo,letthemknowthatyouwon’tacceptitbutavoiddirectcriticism. Try:‘Idon’tfeelheard’ratherthan‘youdon’tlisten’.

03Inturn,andapplyingthesameprinciples,lettheotherpersonsharethefactsastheyseethem andhowthey’refeeling.Iftheymakeaprovocativecommentaboutyou,letitpass.

04Withintheconversationthatfollows,resistthetemptationtoattackorretreat–doingeithercould endthedialogue.Ifyoufeelyourselfattacking,stop,takeabreathandreturntothefactsoryour ownfeelings.Ifyou’restartingtoretreat,askforspacetoshareyourviews.Remember,ifyouopt out of the dialogue it will end without a productive outcome.

05 Helpcoaxtheotherpersonbackfromaretreatbyaskingquestionsandlisteningattentively. Quellattacksbyacknowledgingtheirconcernsandreconfirmingthepositiveoutcomethatyou want to achieve.

Dialogueiscriticalforperformanceconversationsbecauseitshowsthatthemanagerisopentolisteningandtoworkingtogether.Almostimmediately,dialoguebringsdownpeople’sdefences.Inthelonger-termitalsobuildstrustandhelpsmanagersandreportsdevelopsolutionstogetherthatcantransformperformance.

Anddialogueisjustaseffectivewhetherwe’redealingwithanunder-performeroracompanystar.Managersoflowperformerscanusedialoguetoconfrontspecificperformanceproblemsratherthandismissingtheindividualasunredeemable.Forhighperformers,dialogueencouragesopenconversationsaboutwhat’spossible,whichkeepstheirmotivationanddedicationhigh.

Dialogue works

AfamilymedicinecentreinVirginiaintroduceddialogueaspartoftheirperformancemanagementprocess.28Theapproachentailed‘dialogic’discussionsbetweenteammembersandmanagers aboutperformancegoals,usingasetofprobingquestionstoopenupdialogue.

Followingtheimplementationofthisapproach,100%reportedthattheyfeltclearabouttheirgoals fortheyear,100%indicatedtheyhadabetterunderstandingwiththeirmanagerand84%reportedtheyhadabetterunderstandingofthelinkbetweenthedepartment’smissionandgoalsandtheirpersonalroleinmaking it happen.

Inthiscase,promotingdialoguegaveastructureforperformancemanagementconversationsanddeliveredoverwhelmingly positive results.

Ontheworldstage,effectivedialogueunitedallthekeypartiesinpost-apartheidSouthAfricaandallowedthemtotransitionpeacefullyintodemocracy.IfitworkedforSouthAfricanconflictresolution,itshouldworkin the tensest of performance situations too.29


Figure 12: Showing the shift towards more commercial coaching.

Spend more time discussing what the ideal future looks like than reviewing past performance.Apprentice relationship.‘Dialogue’ on issues where views strongly differ.

Educate

Team member encouraged to find their own solution.All open questions.Predominant focus onthe past and what canbe learnt.

AskManager tells people whatto do.

Tell


Jobcrafting

We’reatourmostproductivewhenwe’redoingsomethingthatwewanttodoandthatplaystoourstrengths(which is often the same thing). Dynamic performance management creates this situation for as many peopleaspossibleasoftenaspossible.

Set up to succeed

Akeytoolforthisistoemploythekratistoprinciple.ThisisbasedinancientGreeklogicandwasattheheartofAlexandertheGreat’sexpansionplans.Itmeansbuildingaformidableteambymatchingtaskstopeople’sstrengths.30

Therearethreepracticalwaystosetupyourteamsothatpeoplearemoreinclinedtoplaytotheirstrengths:

Role fluidityDifferent people relish different challenges. The person who loathes the idea of presenting at a sales pitch maylovethechallengeofwritingtheproposalorpricingitkeenly.Whenobjectivesarecrystalclear,specifictaskscanmoreeasilybeassignedtosuitdifferentappetites.

Role shapingEventhoughjobdescriptionstendtobefixed,ajudiciousmanagercanusuallyfindspacetoshapearole.Thiscouldmeannewresponsibilitiesand,withit,adifferentstatusintheteamoritcansimplybeformalisingwhat is already happening. The critical element is that the individual is more motivated as a result.

Complementary partneringThismeansfindingtheperfectpartner:wherewouldArchieNormanhavebeenwithoutAllanLeightonwhenheneededtoturnaroundaflounderingASDA?JohnnyBodenwithoutJulianGranville?BrentHobermanwithoutMarthaLane-Fox?Youdon’tneedtherespectivegeniusesofLennonandMcCartneytoformacomplementarypartnership.Thetrickliesinformingteamswithdissimilarbutcomplementingaptitudes.

Shapingtheteamsothateveryonefeelstheyareworkingwiththegrainwillnotonlyimproveperformancebutalsoboostengagement.Thatmeanspeoplewillbemorelikelytostaywiththeirmanagerandotherswillbekeentojoin,too.

30Linley,A.(2008)AveragetoA+:Realisingstrengthsinyourselfandothers.

Stuck Moving

Disengaged

Alter job to suitmotivations and strengths Clear career options

Higher self esteem

Increaseddiscretionary effort

Improvedproductivity

Higher employee turnover

Subtle sabotage

Figure 13: The benefits and key stages of job crafting.


Job crafters are doing it for themselves

Jobcrafters31arepeoplewhoadapttheirroletomakeitplaytoboththeirstrengthsandmotivations.

Inaninsurancecallcentre,TheMindGymencounteredjobcrafterswhotookthreecomplementaryapproaches to shaping their work around themselves, changing the shapes of the holes to suit their ownparticularpegs.Theydiditinthefollowingways:

a) Theyalteredtaskboundaries.Onewomanwholikedlookingafterpeoplevolunteeredforthe additionaldutyofhelpingnewjoinerssettleinquickly.Shetooktheroleveryseriously,including bringingthemhomemadesconesandworkingbeyondhernormalhourstohelpthemwhenthey were stuck.

b) Theymodifiedrelationships,i.e.spentmoretimewithpeopletheywantedtospendtimewith.A youngmanvolunteeredtohelpwithinductionbecausehelikedspendingtimewithpeoplewho werekeentolearn.Awomanwithconsiderableyears’experience,optedtoworkonthe‘appeals’ desk as she relished calming unhappy customers and trying to convert them into loyal advocates.

c) They changed their perception of their roles so they saw what they were doing in a different light. Oneofthelongerservingmembersoftheteambegantotalkabouthisroleas‘takingthehassle outofpeople’slives’.

Responsibilityforplayingtostrengthsdoesn’tjustliewiththemanager.Theindividualalsohasplentyofopportunity to shape their working life. Dynamic performance management helps them realise this and gives themthetoolstodosomethingaboutit.

Getting unstuck

HarvardBusinessSchoolProfessor,RosabethMoss-Kantersuggeststhatpeopleinorganisationsdivideintotwomajorcategories:‘themoving’and‘thestuck’.32The‘moving’canseehowtheirworkinglifecanprogressandwhatthenextstepslooklike.The‘stuck’canonlyseemoreofthesame.

Anexhaustivestudyfoundthatbeingstuckleadstoloweredaspirations,diminishedself-esteemanddisengagement.Thisleadstohigherturnoveranddestructiveactivity,suchaspettygripingorsubtlesabotage.Thegoodnewsisthatpeoplecanrelativelyeasilymovefromonestatetotheother(althoughthelessgoodnewsisthatthetrafficistwo-way).

Whenpromotionsarescarceandbudgetcutsmeanthere’slittlehopeofpayrises,‘moving’needstomeanmorethanmovingupthehierarchy.Managersmustbroadenthedefinitionofprogress.

Thismayincludenewskills,newculturalexperiences,newwaystobalancehomeandwork(more/lesstravelling),studyleaveand/orsponsorship,secondmentstoanewareaofthebusinessorevenasabbaticaloutside the organisation.

Thekeytogettingpeopleunstuckistoshowthemhowtheirfuturecanbedifferentandwhattheycandotomake it so.

Taking a malleable view

Doyouthinkofintelligenceassomethingwe’rebornwiththatisfixed,ordoyouthinkitcangrowandbeimproved with discipline and practice?

ResearchersattheUniversityofCalifornia,Berkeley,conductedanexperimenttoseewhatdifferencethesetwodifferentattitudescouldmake.AgroupofMBAstudentsweresetanegotiationtaskandgivenaweektoprepare.Whentheyreturnedaweeklater,justbeforetheywereabouttoconductthenegotiation,theywererandomly allocated into two groups.

31Wrzesniewski,A.,&Dutton,J.E.(2001).CraftingaJob:RevisioningEmployeesasActiveCraftersoftheirWork.AcademyofManagementReview,26,179-201.32KanterR,andBrinkerhoffD.(1980)AppraisingthePerformanceofPerformanceAppraisalMITSloanManagementReview21(3):3-16.


Eachgroupwasreadaparagraphofabout50words.Onegroupwastoldthatnegotiationisafixedskillthatweacquireinchildhoodandthatdoesn’tchange–you’reeithergoodatitoryou’renot.Theothergroupwastolditissomethingyoucangetmuchbetteratwithpractice.

Themaximumscoreforthenegotiationexercisewas13,200points.Thegroupthatwastoldthatnegotiationisafixedskillscored3,332points.Thegroupthatwastolditwasamalleableskillscoredonaverage6,300points.

Numerousotherstudieshaveconfirmedthefindingthatthosewithamalleableviewofcapability(beitnegotiation,intelligenceorevenplayingtheviolin)greatlyoutperformthosewithafixedview.33

Thishastwoimportantimplicationsforperformancemanagement:

•Managersneedtobelieveintheabilityoftheirpeopletolearnandgrow.Thismeansnotonlygivingthem thingstodothattheyaregoodatbutalsoputtingtheminsituationswheretheyhavethechancetolearn.•Individualsneedtorealisethattheycangrow.This,aboveall,willgetthemunstuck.

Shaping futures

“Ifheknewwhatshewantshe’dbegivingittoher”sangtheBanglesin1986.

The challenge for many of us is knowing what we want from our career, lifestyle, relationship or, in some cases,ourdinner.Whileamanagerwouldgenerallydowelltosteerclearoftheirteam’sdietsorlovelives,they do need to understand what the people they are managing want to achieve at work.

Thisinsightwillhelpthemanager:

• Framecurrentworkandgoalsinawaythatappealstotheindividual’sexistingmotivations.• Offercoachingandsupportthattheindividualwillconsiderespeciallyhelpful.• Buildtrustand,potentially,gainalifelongsupporter(whichmayhelpinunexpectedwayslateron).

Asaresult,bothpartiescanformanenduringpact,totheirmutualbenefit:“Iwillhelpyouachieveyourcareer/lifegoalsifyouhelpmedelivertheresultsIneed.”

Nothing motivates like an appeal to self-interest.

Therearethreestagesinthisjourney,aswediscussinthefollowingthreesections.

What do you want?

Theconversationaboutcareerorlifestylegoalsisn’tusuallythefirstconversationamanagerhaswiththeirdirect report, and rightly so.

Theinitialpriorityneedstobedeliveringresults.Researchshowsthattrustisbuiltfastestbyinitiallyfocusingon completing tasks together.34So,sincealeveloftrustandmutualrespectisrequiredtomakethecareerconversation productive, it pays to have passed through some tough challenges and chalked up a few successestogetherfirst.

However,afterthreetosixmonthsofworkingtogether,amanagershouldbediscussingcareer/lifestyleaspirationswiththeirreport.Sowhydosomanyofusputitoff?Perhapsit’sbecauseitrequiresalevelofintimacynotyetachievedintherelationshiporalevelofforesightandcertaintyaboutthefuturethemanagerdoesn’tbelievetheyhave.

Whatevertheworry,suchconversationsareakeypartofdynamicperformancemanagementandcan’tbeignored.Ifyou’restruggling,thesetipsshouldhelpyouonyourway.

• Toeaseyoubothin,givetheinitialconversationsanarrowfocus,e.g.whatdoyouwanttohaveachieved hereinayear’stime?Onlyasbothpartiesgaininconfidenceandtrustshoulditmoveintowiderand deeper areas for the individual.

33CarolDweck,‘Mindset:thenewpsychologyofsuccess’,BallantineBooks,2007.34 Kramer(1996)TrustinOrganisations:FrontiersofTheroyandResearch,ThousandOaks,LondonandNewDelhi.


• Puttheinterestoftheemployeefirst.Inthisconversationyouarean‘independentcoach’,tryingtodothe besttohelptheindividualuncoverwhatisgoodforthem,evenifthismeansleavingthecompany.• Listenvery,veryattentively.Thecluesmaynotbeobviousbuttheywillbethere.Andtheywillbe seenandheardonlybyamanagerwhoisgivingtheirfullattention.Thatmeansnoemailpinging,no Blackberrybuzzing,nothoughtsaboutyournextmeetingallowed.• Allowtheconversationtogointowhateverareastheindividualchooses(unlesstheyareclearly inappropriate) and refrain from suggesting what you would want in the same situation. The individual may wanttospendmoretimeathome,feellikethey’reachievingsomethingworthwhile,makealotofmoney, berespectedbytheirpeers,completeamarathonandplentymore.Amanager’sjobistogetthe individualtoshareasmuchofthisaspossible.• Askfromtimetotime‘whatisitaboutthisthatmakesitsomethingyouwanttodo?’Theaimistouncover themotivationthatsitsbehindthegoal.Someonemaywanttorunthemarathontogetfit,toraisemoney forcharity,tobewithfriends,becausetheylikesettingthemselvestoughgoals,becausethey’rebored orbecausethey’regoingthroughare-evaluationoftheirlife.Whattheywanttoachievemaymatterless than why.• Don’ttrytodoitallinonego.Buildinsightoveraseriesofconversations.• Empathisewhentheindividualgetsstuck(whichtheyinvariablywill)anddon’ttrytorushthem.Helpthem by,forexample,exploringwhentheindividualfeelsthattheyareattheirbestorgivingexamplesofwhat others have done and asking how much these options appeal.• Capturekeypoints,replaythemtocheckthey’recorrect,andalwaysbehappytochangethemasthe individual changes his or her mind.

Somepeopleknowexactlywhattheywant:“IwanttobecountryheadbythetimeI’m35!”Mostareratherless certain. When well handled, the effect of this (series of) conversation(s), will mean the individual feels clearer, more motivated and, often, grateful.

What can we give you?

Everyonedeservestoknowwhata12-24monthjourneyinthecompanyforthemcouldbe.Thismaylooklikeacareerpath,apersonalskillsdevelopmentjourney,arewardtrackoracombinationoftheseandmore.

Critically the individual needs to understand what they can realistically aspire to and what they need to do in order to achieve it.

Iftheearlierconversationoncareer/lifeaspirationshasbeenhad,itwillbealoteasierforthemanagertoshapeajourneythatappealstotheindividual.

How can you realise your ambitions?

Theconcludingphase,andonethatmanagerandindividualwillkeepcomingbackto,istheplantorealisetheambitions.Thisislikelytoincludemilestonesalongthewaywithcertainrewards/creditswhentheyaremet,aswellasadevelopmentplanonhowtobuildskills,experienceandconfidence.

Thebulkoftheresponsibilityforthiswillliewiththeindividual,butthemanagermayalsoneedtomakesomecommitments,e.g.thetypeofworktheindividualwillbegiven,theamountofcoachingthemanagerwillprovide,accesstodecision-making,freedomtoexperiment.

Theplanisaformofcontract.Bothagreeonwhatneedstobeachieved,whateachpersonwilldotomakesure it is, and what each will get in return.

Thispieceinthedynamicperformancemanagementpuzzlestartstoshifttheburdenfrombeinglargelyonthemanager’sshoulders,with‘parent-child’exchanges,tobeingajointresponsibility,with‘adult-adult’exchangesbetweenthemanagerandtheemployee.

Asaresultofthisshifttowards‘adult-adult’exchanges,theindividualwillfeelmoretrusted,morerespectedandmoremotivated.Inturn,theirperformancewillincreaseandthedemandsonthemanagerwillreduce.

Andso,thevirtuousperformancemanagementcircleisformed.



Insomeplaces,performancemanagementis associated with under performance, as in ‘you’reinperformancemanagement’,whichisunequivocallyabadthing.

Inothers,it’sseenasanotherdutyfortheputuponlinemanager.We’vealreadyexploredsomewaystohelpthesemanagersfulfiltheirperformancemanagementresponsibilitieswithverve and guile.

But,thetrafficisn’tjustoneway.

Tobuildsustainableperformancemanagement,everyone needs to take their share of responsibility.

Thisiswhyitpaystosellinthepersonalbenefitsof great performance management to the individual.Don’tbotherthemwiththebusinesscase (see page 3) or more than you need to with thecorporaterationale(‘wewanttocreateahighperformanceculture’).Theywon’tcare.Instead,highlight how their involvement in performance management will help them learn more, grow faster, get promoted sooner, worry less, achieve more,enjoyworkorwhateveritisthatyouthinkthey want.

It’s in your hands

Itisalsoworthshowingtheindividualhowtheycanshapetheirexperienceofwork,startingwiththe premise that they have at least as much control over it as their manager (which comes as a surprise to most).

Atitsmostbasic,thismaymeancomingtotheirmanagerwiththeirownviewoftheirperformance.Atitsmoreadvanceditcanincludedevelopingtheirowncareerplanandengagingtheirmanagersohe/shevalidatesitandtakesonsharedresponsibilityformakingithappen.

Inonecasestudywithaprofessionalservicesfirm,100peopletookpartinatwo-hoursessiononhowto shape their future career. The results demonstrated that even such a short intervention can have a significantimpact.

Figure 14: Poster you could use to sell the benefits of PM to individuals.


Ultimately,performancemanagementisaboutconversations.Thereisnolimittothelevelsofmasterywecanreachinordertomanageperformancetomaximumeffect.Thesefiveingredientsarenotthewholestory.Equally,thoseorganisationsthatinvestinthemwillreceiveadisproportionatelyhighreturn.

50%

40%

30%

20%

10%

0%

% in

crea

se

I can take controlof my career

I am confident I can get what I want from

my career

My fututre at xxx looks positive

I know where to look for career opportunities

Figure 15: Impact of The Mind Gym intervention on Global Employee Survey results (2007).


Performancemanagementprocess

Dynamic performance management places clear, candid, constructive conversations at the centre of transformingperformance.However,torealisethefullbenefits,itisdependentonhavingarobustandconsistentprocesswhichprovidesthefoundation.Withoutit,theconversationswillflounder.

Adynamicperformancemanagementprocesswillhavethefollowing:

•Annualreviewswithquantitativeratings.Theannualreviewsarewrittenupandstoredcentrally.

•Writteninputfromdirectreports/peers/customers(usuallyaspartoftheannualreview).•Frequent,informalfeedbackconversationsbetweenmanagerandindividual,andpeer-to-peer.•Moreformalperformancerevieweitherquarterlyoratthehalfyeartodiscusscareerprogression,skills developmentand/orperformance.•Stretching,written,measurableoutcomegoalsthataredirectlylinkedtotheoveralldepartment/company goalsandarereviewedatleastquarterly.Thesearesupplementedbydevelopmentgoals,i.e.thenew skillsandcapabilitiesthatareneededtoachievetheoutcomegoals.•Inter-ratingbymanagerstoensurethatannualratings(and,ideally,annualgoals)arefair across peers.•Deliberatedifferentiationofperformancewithdifferent,quantifiedperformanceratings.

Theprocessmightlooklikethis:

Figure 16: Dynamic performance management process.

Annual review

Fortnightly one-to-ones



Quarterlyinformal review

Six-month review


Quarterlyinformal review

360 input

Individual’s input

Proposed rating

Inter-rating

Goal setting

Establish team goals

Performance goals

Development goals

Inter-rating

Write up goals

Write up reviewRegular day-to-day

cycle

Reviewcycle

Goalcycle


How The Mind Gym can help

The Mind Gym has delivered dramatic improvements in performance management in a wide range ofcompaniesfromglobalinvestmentbanksandconsumergoodscompaniestoleadingUKretailers,telecommunicationscompaniesandoneoftheworld’slargestoutsourcers.

Goals, feedback and consistent differentiation

Commercial coaching; poor performance

ChallengeIn an organisation fresh from a complex merger, performance management was no longer correlated with financial performance. Managers lacked the capability to manage performance, conduct appraisals and drive change.

SolutionA series of performance management workouts were delivered to 1,000 participants in over 11 countries. Sessions were delivered both face to face and virtually.

Results

I learnt new knowledge and skills from the workouts.

I’ve been able to successfully apply the knowledge and skills learnt from the workouts to my job.

Goal getting Greatfeedback

Crestingthe curve

Rate success

strongly agree agree neutral disagree strongly disagree

20 40 60 80 1000

32%68%

16%66%18%

Bias adjustment factor

Percentage improvement

Salary

Cost of training(including participants’ time)

BCR

ROI

65%

6%

£50,000

£435

£185£6.60 ROI 560%

1000 participants

% of responses

ChallengeA leading name in the UK retail industry had previously shied away from dealing with under-performance. In an economic downturn however, under-performing is not an option.

SolutionU-turn performance was offered to all people managers in the head office to give them the skills they need to turn underperformance around and retain their successful position in the industry.

Results4 weeks later

300 people took part.U-turnperformance

Bias adjustment factor

Adjusted improvement score

Salary

Cost

BCR

Forecast ROI

65%

1%

£40,000

£185

£1852.16

Mastery &the future

Practice

Morepractice

ContextPrinciples The first

five tools

Three moretools

Conversationone

Conversationtwo

Final twotools

Furthersources

5 topsfor success

Conversationthree

My nextconversation

I know how to manage under-performers and help them turn their performance around.

I am confident in my ability to manage under-performers / performance.

I have applied what I learnt in the workout.

100%

100%

83%

20 40 60 80 1000

ROI 116%

% people that strongly agree / agree


Diagnose

Twoonlinediagnosticsrevealthestrengthsandsignificantgapsfororganisationsandindividualmanagersatdeliveringthefiveingredients.

The Mind Gym’s Solution

Stretching goals andfrequent feedback

100%

80%

60%

40%

20%Consistentdifferentiation

Commericalcoaching

Jobcrafting

Handing overresponsibility

Individual 360º report

A Organisation reality check• Sent to all employees.• Report on how organisation scores against five ingredients.• Output used to tailor programme to real (not assumed) needs.

B Individual insight• Sent to managers going on programme and their team for upward feedback.• Personal debrief on quality of their performance conversations against five ingredients.• Programme description. Either list of DPM learning bites your organisation is running for individual to self-select. Or recommended individual learning journey.

Figure 17: Overview of The Mind Gym’s solution.

Diagnosea) To assess how close your organisation is to having dynamic performance management.b) To assess the quality of managers’ performance conversations (self-report with upward feedback).

EngageCampaigns to sell the benefits of dynamic performance management to (a) managers (b) individuals. Toolkit and training for managers’ managers.

LearnA range of workouts, boosters, live actions and other interventions to build the confidence and capability of (a) managers to lead dynamic performance conversations (b) individuals to take greater responsibility for their own performance.

ImpactThe ROI is huge and canbe calculated using JackPhillips’13 methodology.

2 - 3 weeks 1 - 2 weeks 1 - 4 months immediately and 1 month later

Sustainment – integrated into every stage of the solution.

Figure 18: Output of individual insight diagnostic highlighting which ingredients to focus on.


Engage

ProfessorRobertBrinkerhoffsuggeststhat80%ofthefailurerateoflearninginterventionsisduetopoorengagement and poor post-event sustainment.35Thisexplainswhysomuchofthegoodadviceonhowtohave great performance conversations is never acted on.

Fewmanagersgetexcitedbytheprospectofperformancemanagementtraining.Thetrickistohooktheminbyappealingtoself-interest.Essentially,explainingwhat’sinitforthem.

WithhelpfromTheMindGym,onebankdidadeskdropwithanenvelopeonwhichwaswritten:

Inside this envelope is a racing certainty

Inside,itread:“Whenitcomestochangingbehaviourthenearestthingtoaracingcertaintyispraise.Findouthowtogiveitsopeopledojustwhatyouwant,everytime.”

Thisbroughtinenoughmanagerstokick-starttheprogramme,whichisnowinitsfourthyear.

Different campaigns work for different audiences. Here are a couple more that have tempted sceptical managerstotakepart:

Asimportantastheinternalmarketingistheengagementofthemanagers’managers.

Themosteffectiveimplementationofdynamicperformancemanagementstartswiththem.Engagingthemanagers’managersmayconsistofaseriesofconversationstoexplaintheaimsoftheprogrammeandtheirroleinmakingitasuccess,throughtoadryrunofwhattheirmanagerswillexperience.

Inoureyes,itisalmostimpossibletounder-investinthisarea.

Figure 19: Enticing engagement campaigns.

35 Brinkerhoff,R.(2001)Highimpactlearning,PerseusPublishing.


36A90-minute,interactiveworkshoppackedwithpracticaltoolsandtechniques.37A90-minute‘realplay’basedonspeciallydesignedscenariosthatmanagerswillrecognisefromtheirday-to-dayworkinglife.38A60-minute,highimpact,highenergyandhighparticipationtalkforlargegroups.

Learn

Programme content

TheMindGym’sWorkouts,LiveActionsandGoLargesaredesignedtoboostmanagers’confidenceandcompetence.ThemajorityoftheWorkoutscanalsobedeliveredonline,forgroupsofupto12people,inavirtual classroom. This is a selection from those that have already delivered great impact. New sessions can bebuiltexpresslyforyourneeds.

Five key ingredients Workouts36 Live actions37 Go larges38

Stretching goals with frequent feedback


Commercial coaching

Job crafting

Employees take responsibility

Setting expectations

Create your own futureIt’s my life


Programme structure

Theprogrammestructurewillbedesignedtomeetyourneeds.Formaximumeffectitwillconsistofaseriesofshortmoduleswithinter-sessiontasks(‘actionchallenges’)betweeneach.

Managers

Intr

oduc

tion

Colleagues

Shapingfutures

Goalgetting

Managingexpectations

Courageousconversations

Greatfeedback

Create yourown future

Manager diagnostic

Design journey

Kicking offthe programme

Goals, feedback, consistent differentiation

Time Stream one: Workouts

Stream two: Live actions

360 09:00-09:30

09:30-11:15

11:15-13:00

13:00-13:15 Set action challenges

Rate success

Great feedback Goal setter

Setting expectations

Action challengeBack atwork Action challenge

Back atwork

The 5 vital ingredients

Live action

Job crafting

Time Stream one: Workouts

Stream two: Workouts

09:00-09:30

09:30-11:15

11:15-13:00

13:00-13:15 Set action challenges

Dialogue groups: my DPM challenge

Shaping futures Motivate

Debrief action challenges

Booster

Example A: Distributed Bite-Size sessions

Example B: Summits


Evaluation

TheROIofdynamicperformancemanagementishugeandcanbecalculatedusingacombinationofJackPhillips’andRobertBrinkerhoff’smethodology.39

Chain of impact

We will create a comprehensive evaluation presentation ready to show to your internal stakeholders demonstrating:

•Impactonbusinessmetrics.•IncreaseinperformanceandforecastROI.•Robustcasestudies.•Recommendationsforcontinuousimprovement.

Wewillsharetheresultsat‘Thebeginning’;aface-to-faceorvirtualsessionwiththemanagers’managers,andhandoverresponsibilitytothemtokeeptheingredientsalive.

39 Philips,J.,Philips,P.,Stone,R.,Burkett,H.(2006)TheROIFieldbook,Butterworth-Heinemann;Brinkerhoff,R.(2001)Highimpactlearning,PerseusPublishing.

ROI

Level of impact Typical current state Ideal future

Business results

Behaviour

Knowledgeand skills

Reaction to intervention

• ROI not measured.

• Average productivity levels.• Average levels of employee engagement.• Higher than desired levels of absenteeism and employee turnover.• Senior roles typically recruited for externally.

• Managers know how to complete the PM forms.• Individuals don’t think about taking control of their performance management.

• Not perceived as a valuable use of time. • Feel it is pioneering, useful, rigorous & engaging.

• Goals are not measurable, stretching or clearly linked to strategy.• Performance feedback is confined to monthly catch-ups at best.• Everyone scores the same at review time, so people leave or slack off.• Inconsistency between different managers; and between same manager depending on mood.• PM is seen as a box ticking exercise.• Traditional coaching takes too long to deliver results.• Individuals are confined to rigid job descriptions that do not bring out their best performance.• Individuals feel unclear how to get what they want from life (or what that even is).• Responsibility placed either on HR or with line managers (and not with individuals).• Managers don’t frame PM in a way that excites individuals.

• Managers and individuals agree stretching goals with frequent feedback on progress against these.• Inter-rating meetings between managers on goals and review scores to ensure consistent, just differentiation.• Commercial coaching: the manager uses his expertise to guide, teach and question.• Job crafting: adapting roles and tasks to build on strengths and facilitate long-term aspirations.• Hand over responsibility to the person being managed, by ‘selling’ PM as something that will help them grow faster/ earn more/ enjoy work.

• Increased productivity.• Increased employee engagement.• Decreased absenteeism.• Decreased employee turnover.• Decreased spend on recruitment due to surge in internal promotions to senior roles.

• Managers know how to have dynamic performance management conversations.• Individuals are inspired to take ownership of their performance management.• PM is perceived as a crucial lever to drive business results.

• Forecast ROI calculated.• Value created is substantially greater than cost.


Problems with current performance management initiatives

• One size fits all.• Feels like the company is just trying to get more out of us.• A whole day out of the office• Content is based around out-of-date learning fads.• Learning events are fun (sometimes) but nothing changes back at the ranch.• Budgets cut and programme scope diminished because not seen as a business imperative.

The Mind Gym’s solution

• Personal diagnostic leads to individual insight and unique learning journey.• Intriguing engagement campaign positions the programme as something to get promoted sooner/ make life easier.• Minimal time off-the-job and maximum retention of knowledge and skills.• Content is based on pioneering scientific research on what works• On-the-job action challenges and observations by managers’ manager ensure transfer to the work place• Robust evaluation clearly demonstrates value to key internal stakeholders.

Rebecca Wallace (UK) [email protected] +44 (0)20 7376 0626

Sarah Donovan (US) [email protected] +1 646 495 5081

www.themindgym.com

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