Performance

Where’s the meat in your sandwich?!

giantknave Brain Farts , , , , , ,

sandwichI came across a LinkedIn ‘research’ report that had been shared on a social media platform the other day. It had a grand title:

The 2016 Workforce Purpose Index: ‘Purpose at work – the largest global study on the Role of Purpose in the Workforce.’

Mmmm, sounds interesting. And, wow, ‘largest global study’ – must be important – I’d better have a read…and so I did…and then I found myself doing a bit of frothing at the mouth. I do that when stuff winds me up…I’m okay, honest 🙂

Now I am absolutely NOT getting at the person who shared the ‘report’, or any persons liking or positively commenting on it. Just to clear up any potential confusion at the start: I totally agree that the premise of ‘purpose at work’ is to be ‘liked’….and in fact passionately argued for. An earlier post uses an Ackoff essay to explain why this so.

But here’s some other stuff that I thought as I read through the ‘report’:

Helpfulness?

The introductory pages deliver the usual ‘listen up people – purpose matters’ message. This is, for me, like the ‘Buy low, sell high’ advice – blindingly obvious…but not particularly useful.

Profit?

And so to the page on “Purpose brings profit”: Yes, I agree with this…but, at the risk of repeating my ‘blindingly obvious’ mantra, this shouldn’t really be surprising i.e. if you passionately understand and serve your customers with what they actually need (this is fundamentally different to ‘selling to them’), then you have a high chance of success. Simples.

What the report fails to tackle, let alone drive home, is that many organisations get their logic ‘in a twist’ i.e. their (subconscious?) thinking is that ‘If we craft, and then regularly, state a cool-sounding purpose, then we can focus on our real purpose of profit.’ This is NOT what ‘purpose brings profit’ means!

A focus on growth and profitability doesn’t unlock purpose – indeed it will likely do the exact opposite. This isn’t to say that you can’t grow and be profitable. Of course you can. It is to correctly state the cause-effect relationship between a fanatical focus on a meaningful purpose (cause) delivering sustainable and healthy growth and profitability (effect).

Again, I’ve written about the ‘what and why’ of this previously in a post titled ‘Oxygen isn’t what life is about’.

People?

To quote from the report:

“Key Finding: Given the right role and environment, [people] are ready to tap into their purpose and reach a higher potential at work”.

Now, I absolutely agree with this statement but I get sick of, what I consider to be, the spectacularly obvious being dressed up as a ‘finding’. This is ‘McGregor 101’: How you treat me will determine a massive amount of how I behave.

And so to the next quote:

“this correlation of satisfaction at work and purpose orientation was consistent in virtually every country and industry studied.”

This is where I write “No sh1t Sherlock!” That would be because we are all humans – which is a nice segue to Dilbert, and the Theory of Evolution.

Capt obviousIt’s a bit like all those scientific research projects spending scarce grant money to confirm that ‘water quenches our thirst’ or ‘alcohol gets us drunk’ or [insert one from today’s supposed news].

The trouble, for me, with stating the obvious but missing out the important contextual piece is that organisations then run away shouting “oooh, quick, quick…we’ve got to find our purpose! Let’s gather round and play with some words.”

And they spectacularly miss the point.

Purpose driven?

So let’s get to the nub of my critique: The report implies that there are three different types of people*, these being those who are primarily:

  • Purpose-driven; or
  • Status-driven; or
  • Money-driven.

They then follow this line of reasoning with….have you guessed it?…the recommendation to search for and select purpose-oriented ‘talent’.  It even suggests adding the ‘what is your primary drive?’ dimension to an organisation’s talent selection criteria 😦

The hilarity of this is that they may recruit lots of (currently) purpose-driven people…and then kill it. It’s the same old talent message – don’t endlessly seek talent, recognise and tirelessly work to unleash the talent from within.

So, back to the ‘research report’: sure you can ask someone to respond to survey questions as to which category they currently associate themselves most with (i.e. purpose, status, money)…but where is the consideration as to WHY someone might answer as they did.

* are they ‘types’ of people….or are they outcomes that people have arrived at or been driven to?

Some examples:

  • how many of you started a new job with passion and purpose, but within 6 months – 1 year, had been beaten back to surviving on merely the money and seeking some status to get noticed?
  • how many of you started your ‘careers’ focused on getting on the ladder and earning enough money to gain a roof over your heads and have a family….and how many of you have reached a certain level of wealth and/or experience where your priorities have changed?1

To conclude:

Yep, purpose is important.

Yep, I can’t really disagree with the blindingly obvious littered throughout the ‘report’.

…but if the report were a sandwich, it is bland, limp and empty – where’s the important and insightful stuff that needed to be said?

In short, where’s the meat in the sandwich?!

Does this matter? Well, yes, it does. The problem with such reports is that they allow the top management of traditional (‘command and control’) organisations to gleefully wave them about, shouting “nothing to see here – we know all of this and, even better, we’ve got it totally covered!”

Total codswallop.  As I wrote in an earlier ‘Blackadder’ post, a report is only valuable if it covers what needs to be said, not what they want to hear.

The report spectacularly misses the huge point that:

“People’s behaviour is a product of their system. It is only by changing [the system] that we can expect a change in behaviour.” (John Seddon)

What sort of system environmental things am I talking about? If you read Deming’s 14 points for management you will get a good idea. At a high level, let’s compare two environments and then you tell me which would enable you to focus on your purpose and which would see you struggling to survive through status and money:

Traditional A better way!
Hierarchical (authority…superiority) ‘Social’ (responsibility, equality)
Fear/ blame Trust/ ‘safe to fail’
Rules and consequences Guidance and support
Growth and Profitability Customer, customer, customer
Budgets, financial measures, cost cutting ‘Purpose’ operational measures, variation
Implement ‘best practise’ on the people (plans) Problem solving by the people (experiments)
Cascaded personal (or team) targets Value stream capability measures
Judgement, through rating and ranking Coaching, through non-judgemental feedback
Carrot and stick compliance Intrinsically motivated
Incentives Profit sharing
Competitions, and hero (people) awards Collaboration, and achievement focus
… …

 Whether a person can (will) be purpose-oriented is hugely down to the environment in which they work. Simples.

Footnotes

1. This is rather obvious: take your pick from ‘Herzberg’s Motivators & Hygiene factors’ or ‘Maslow’s hierarchy of needs’.

2. I ‘get’ that LinkedIn are merely trying to drum up business by suggesting we all need to find ‘talent’ but….grrrrrr.

“So, tell me about yourself”

giantknave Brain Farts , , , ,

InterviewA good friend of mine got talking to me about interview questions the other day.

She was having a laugh at the ‘creative’ questions that many interviewers can dream up such as “tell me what makes you special!”

I replied that I think the worst interview question is the “what are your greatest weaknesses”…and then I got thinking about why this is so.

Now, an interviewer can dream up all sorts of weird and wonderful questions that will allow you the space to sell yourself (if you are willing and able to) but this ‘weakness question’ is different. I suspect that it makes us all squirm because it causes a huge moral dilemma:

  • you want to be yourself, to be genuine, to be open and honest….

BUT

  • you also want the job!

So you’ve been put in a rather tight spot!

I’ve read all sorts of ‘clever’ (cheesy) responses. There’s plenty of advice on the web to answer this tricky conundrum, but they all try to do the same thing: get around the question rather than being brutally honest.

So, why am I bringing up this dastardly interview ‘weakness’ question?

Well, because I realised that this is an excellent parallel to the (ir)regular performance management meeting.

How so?

If you are part of a ‘set personal objectives – rate performance against – provide contingent reward’ Performance Management system then you too are in a rather tight spot.

Let’s imagine that you are in your annual performance review meeting:

  • on the one hand, you have a manager before you who has the job of developing you and, to do this, needs to truly know about how things are for you. They need genuine, open and honest ‘warts and all’ feedback;
  • on the other hand, this same manager has to judge you, which requires an interrogation of the available evidence and the scoring of it, as compared to your peers. You need to sell yourself.

What’s wrong with this?

These two ‘management’ roles are diametrically opposed. A manager cannot be judge and counsellor/coach at the same time.

If you were to lie down in a psychiatrist’s chair, you can expect that he/she will go to great lengths to put you at your ease, make clear that everything spoken is private and that no judgement of you will take place….and even then I suspect that it would take multiple visits before you truly opened yourself up….and in so doing, you provide the knowledge and insights required for you to develop.

Now, I know you won’t lie on a reclining chair in a performance review meeting (at least I don’t) but a similar environment of trust is required for a manager to truly help you (and, by extension, the organisation).

“When the person to whom you report decides how much money you will make (or what other goodies will be awarded to you) you have a temptation to conceal any problems you might be having. Rather than asking for help, which is a pre-requisite for optimal performance, you will be apt to spend your energies trying to flatter that person and convince him [or her] that you have everything under control. Moreover…you will be less likely to challenge poor decisions and engage in the kind of conflict that is beneficial for the organisation if you are concerned about losing out on a reward. Very few things are as dangerous as a bunch of incentive-driven individuals trying to play it safe.” (Alfie Kohn)

If you know that you are being judged (with a carrot or stick at the end of this) then you are going to be extremely careful (and selective) about what you do and say. You will likely:

  • seek, sift through and provide only positive evidence (choosing feedback wisely and carefully omitting what doesn’t fit your wishes);
  • talk up what has occurred, and you role within (it was all ‘because of me’!);
  • defend your position when it is challenged (presenting a strong case as to why something or someone else was to blame);
  • keep quiet about areas you have struggled with;
  • …[and so on – no doubt you can expand]

None of this is to call you a ‘bad person’…you would be merely playing your part in the game of survival that has been put before you.

You might get your carrot, but your organisation will miss out on what it really needed to know…and the game will continue on to its next round.

A better way

Wouldn’t it be just fantastic if you were willing to ‘share it all’ with your manager, and to do so without any salesperson’s spin. How about: where you got it wrong; where you didn’t understand; where you don’t agree, where you feel weak and exposed, where you’d really like some help… where it was actually a joint team effort (not just ‘me’)…basically what is really going on!

Even better, how about being willing to have these conversations as and when the need arises (and not, say, 6 months later in some staged meeting).

This is possible….but only with a different way of thinking.

Here’s where I repeat Alfie Kohn’s 3-step approach that I have already shared in an earlier post (The Chasm):

  1. abolish incentives: remove extrinsic motivators (incentives, competitive awards….);

“pay people well and fairly…then put money out of their minds.” (Kohn)

  1. then re-evaluate ‘evaluations’: move from formal time-batched judgement events to continual 2-way conversations divorced from the issue of compensation;
  1. then create the conditions for authentic motivation:
    • Collaboration: across the horizontal value stream
    • Work content: make it interesting
    • Choice: allow people to experiment and learn

There’s a reason for the order of these steps: True organisational success is unleashed by point 3…but, most importantly, is held back (even quashed) without first attending to point’s 1 and 2.

Irony

There are some people who are willing and able to say exactly what they think in a performance management review*, which they do because they have a desire to make their organisation a better place to work (for them, and everyone else)….and then risk the consequences of low(er) ratings and a poor ‘reputation’ with their manager (as in “s/he’s a trouble maker that one!”)…which may even then go on to be ‘shared’ with others in the hierarchy.

This is ironic madness. I favour any management system that encourages and supports open-ness and honesty that is devoid of personal agendas.

* I’m not suggesting that there is anything particularly great about such people. Such willingness and ability may come down to personality and economic circumstance allowing…which is not so for most.

 

“I hear what you say…but I don’t want to change my world”

giantknave Brain Farts , , ,

Upton Sinclair quoteSo, for this post, I’m going to use a ‘true story’ as explained by Daniel Kahneman in his mind-bending book ‘Thinking fast and slow’.

(Kahneman is a Nobel prize winning giant in the field of human psychology and I will be adding him to my group of giants soon).

Some years ago, Kahneman was invited to speak at an investment firm whose advisors provide financial advice to wealthy clients. I can almost hear them shouting “buy, sell…buy” across the trading floor.

Pre-meeting preparation.

Kahneman asked the firm’s executives for some data so that he could prepare for the talk he was due to give.

He was provided with a spreadsheet containing the investment outcomes of 25 of the firm’s advisors, for each of 8 consecutive years. No names, just anonymous identifiers.

The firm used the investment outcome success of each advisor as the main determinant of their (potentially large) year-end bonus.

…so what was Kahneman interested in understanding about this data set? And what did he do to interrogate it?

His thinking: That investment outcomes will be a combination of skill (on the part of the advisor) and luck1

His question: How much of the outcome in this ‘providing expert investment advice’ work was down to skill and how much to luck?

How to determine the answer: Kahneman was interested in understanding whether any apparent differences in skill were persistent i.e. did the same adviser consistently achieve better (or worse) returns year on year?

postive corelation pictureTo work this out he calculated the correlation coefficients2 between the advisor rankings in each pair of years: year 1 with year 2, year 1 with year 3….all the way along to year 7 with year 8. This gave him 28 correlation coefficients from which to calculate the average.

  • An average score close to 1 would mean that it was a very highly skilled job and the best (and worst) advisors were easy to identify – in this scenario, luck plays virtually no part;
  • A score midway between 0 and 1 would mean that skill mattered a bit but that luck also had a huge part to play.
  • Anything nearing 0 would mean that it was really just about luck.

So what were his findings and what does this mean?

Drum roll…he was surprised to find that the score was…0.01 or put more simply ‘zero’.

In Kahneman’s words “The consistent correlations that would indicate differences in skill were not found. The result resembled what you would expect from a dice-rolling contest, not a game of skill.”

Clarification: Just in case you are thinking “hey, that’s just one set of data. He got lucky!”…Kahneman knew roughly what he was going to uncover because this ‘person or system’ type analysis has been done many times by many people. He knew the theory and the evidence….he expected it to be low but he didn’t expect it to be soooo close to zero!

So what happened next?

Well, he ended up having dinner with the investment firm’s executives the night before he was due to give his talk.

He explained the question he had asked of the data they had provided to him and asked them to guess the year-to-year correlation in the rankings of their advisers.

The executives (being intelligent and self-protecting people) thought they knew what was coming and calmly accepted that performance certainly fluctuates and, yes, there was an element of luck…however, none of them expected the average correlation to be zero.

Kahneman gave them the clear message that “the firm was rewarding luck as if it were skill”.

This should have been a major shock, but it created no great stir…they calmly went on with dinner as if nothing of note had been said.

Kahneman goes on to write about “The illusion of skill: Facts that challenge such basic assumptions – and thereby threaten people’s livelihood and self-esteem – are simply not absorbed….people consistently ignore statistical studies of performance when it clashes with their personal impressions from experience.”

Why write this post?

There are two key points within the case above:

The first is that Kahneman’s story is an (extreme) example of the system vs. the individual. Yes, some people may be outstanding but a great deal of ‘performance’ can only be ascribed to the system in which they operate. (You might perhaps take note that investment advice is little more than a game of chance.)

But perhaps the second (and main) point is clearly expressed in the phrase “I don’t want to change my world”. The executives may very well accept ‘the maths’ and the conclusion…but that doesn’t mean they are about to change anything.

Consider that executives are probably also on a (larger) bonus structure which will have a similarly dubious rationale. We can expect little change unless and until those ‘at the top’ of an organisation understand, agree and want it.

People (such as me) can bang on about performance reviews and contingent rewards, providing ever increasing evidence and logic…yet (and this is an open question) what will cause a change?

1 This is another way of stating Deming’s x + y(x) = the result equation. i.e. the result is partly down to the person and a large part down to the system in which they operate (which is simply luck from the person’s perspective).

2 A correlation coefficient (usually denoted with the letter R) is a statistical measure of the strength of the relationship between two sets of data.

Correlation coefs

R = 1 means that the two sets of data are a perfect positive fit.

R = -1 indicates a perfect negative fit

R = 0 indicates that there is no relationship i.e. any relationship is purely random.

A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally described as weak. 

 

A breakthrough!…but is it all that it seems?

giantknave Brain Farts , , , , ,

The word Breakthrough breaking through glass to symbolize discovSo, over the last few days a number of people have sent me links to this recent business article on Stuff: Accenture ditches annual performance reviews. Thanks for that, you know who you are 🙂

In summary:

  • Accenture, one of the largest professional services organisations in the world has decided to radically change its people processes: getting rid of the annual performance review
  • They aren’t the first ‘big beast’ to do something like this:
    • Deloitte (THE biggest professional services organisation in the world) went public in a similar vein last March. An April 2015 HBR article called Reinventing performance management explains where they are going;
    • I understand that the likes of Microsoft, Expedia and Adobe dropped most or all of the performance review process a couple of years ago;
    • Our very own NZ organisation, Telecom (or is that Spark?!), appeared to be heading down a similar path back in 2013 , though this would appear to me to have been driven by cost rather than the science of psychology:

Telecom [will] stop using online forms to appraise staff performance, reverting to a “far lighter” system of one-on-ones and “adult-to-adult conversations” on regular four-to-eight week cycles, he [Simon Moutter, CEO] said.

The “forms and processes” associated with performance appraisal had impeded Telecom, he said.”When we hit ‘appraisal season’, the company nearly grinds to a halt with the bureaucracy.”

Caveat: Looking at this 2015 Spark site, I’m not sure whether they successfully ‘broke away’ from the past…the picture at the bottom looks remarkably familiar!

A reminder: I have written quite a bit on the subject of performance review. In particular see An exercise in futility.

Ironic

What I find highly ironic about professional services firms eulogising about their new found wisdom is that they have large ‘human capital’ consulting arms that have been selling their wares for decades (I know, I used to work alongside them)…and what have they been earning millions of $ on? Yep, advising on implementing supposedly highly researched incentives schemes and performance review programmes….you know, the ones that they have now decided aren’t so great.

Taking a look, for example, at Deloitte’s website, I can deduce that they see a huge opportunity in presenting themselves as (what professional service organisations love to call themselves) ‘thought leaders’ to sell their new-found performance management brilliance (the next Silver Bullet) to all the other organisations out there.

A Fudge?

I have read the Deloitte HBR article (referenced above) and I see their ‘answer’ as a likely fudge.

They talk a lot about the wasteful time and effort expended in the current annual appraisal system. They talk about it not actually deriving valid results (being hugely biased by who is making the judgement). Yet their answer (when boiled down to its essence) is to merely make it simpler – a sort of ‘reboot’. It would appear that they are still asking questions about a person to rate them, which will determine a reward.

You could point to their strap line of “Replace ‘rank and yank’ with coaching and development” and, yes, I can get behind that BUT:

  • they haven’t once talked about the system and its monumental effect on what a person can (or cannot) achieve; and
  • they appear to be clinging to the idea of motivating an individual’s performance through contingent rewards, and judging them accordingly.

I can see that the games people understandably play will simply mutate, yet remain.

“Tell me how you will measure me and I will [show] you how I will behave” (Goldratt).

Going back to Alfie Kohn’s work:

  • First you need to remove contingent rewards;
  • Second, you need to re-evaluate the performance review process (change from judgement to feedback);and
  • Then you can create the conditions for authentic motivation.

A reminder of why judgement and rewards do not belong anywhere near helping people develop:

“If your parent or teacher or manager is sitting in judgement of what you do, and if that judgement will determine whether good things or bad things happen to you, this cannot help but warp your relationship with that person.

You will not be working collaboratively in order to learn or grow; you will be trying to get him or her to approve of what you are doing so that you can get the goodies.

A powerful inducement has been created to conceal problems, to present yourself as infinitely competent, and to spend your energies trying to impress (or flatter) the person with power.” (Kohn)

“Mind the gap”

Many an organisation might read about* what the likes of Accenture are doing and conclude that, clearly, they need to copy them.

But a reminder of the dangers of copying: Yes, look at what others are doing and, yes, be curious as to why…BUT you need to work it out for yourselves – you need to ‘get’ why it is the right thing to do and then adapt it accordingly. Otherwise you can expect one great big mess.

(* A particular quote from the Accenture article which I found of interest: “Employees that do best in performance management systems tend to be the employees that are the most narcissistic and self-promoting” We should be seriously questioning if this is actually what we want.)

“Nothing to see here”

Whilst a part of me is very pleased to see the big beasts ‘coming out’ (more or less) against the performance review process:

  • I’m unmoved (being polite) by their commissioning/ invoking of seemingly new and brilliant research that arrived at their ‘new insights’.

Why? Well, there’s nothing new here. Go back to Alfie Kohn’s brilliant book ‘Punished by Rewards’ to see the body of research from many decades ago. Go back to Deming’s 4 day lectures that he gave to thousands between 1981 and 1993 (that’s more than 30 years ago!!):

Deming’s Deadly disease number 3: Evaluation of performance, merit rating, or annual review

“In practise, annual ratings are a disease, annihilating long term planning, demolishing teamwork, nourishing rivalry and politics, leaving people bitter, crushed, bruised, battered, desolate, despondent, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior…sending companies down the tube.”

…go back even further to what Deming and the Japanese were doing from the 1950s.

During this time, the majority of large corporations have been pushing in, and constantly justifying, the exact opposite of where they have arrived at now.

Now, to be clear, I think it is really great that there appears to be a movement against the ridiculous performance review process BUT:

  • I’m not convinced that they fully ‘get it’ in respect of human psychology; and
  • I think it is disingenuous, arrogant (or maybe ignorant) of any organisation that does not (outwardly) recognise that what they have just ‘discovered’ has been there, loud and clear, in front of their eyes all the time.

Outstanding!

giantknave Brain Farts , , , , , ,

Hello-My-Name-is-SlackerWhen I discuss my posts on performance appraisal and contingent rewards with people I get a lot of great understanding and support…but there’s always one question that pops up: “but then how will you deal with the slackers?”

Putting to one side whether our management instruments actually ‘deal with the slackers’ at the present, I find this an understandable response from within a command-and-control management system.

I usually find myself responding with:

“…and why do you think they are ‘slacking’*…do you think they want to perform an unfulfilling job all day long? Do you think this is how they started out when they got the job?”

(* if indeed they are ‘slacking’…our activity measures may present a different story than reality)

I then usually get: “yeah, but there will always be some people who take the p1ss!”

This uncovers a pretty hollow view of people. I’m not criticising people for thinking this …it’s more a recognition of the likely environments that people have had to endure through our working lives.

I would respond with a Deming quote to ponder:

“Anyone that enjoys his work is a pleasure to work with.”

  • You and I want to enjoy our work…and the environment that we work within will have a monumental influence on this;
  • I absolutely ‘get’ that there will almost always be a small % of people that sit outside the normal bell curve…but should we be designing our management system for the 5% or the 95%?
    • Do we tar everyone with the 5% brush?
    • Do we effectively yet compassionately deal with this 5% now?
    • Does it make sense that people ‘decay’ to being seen in this 5% bracket?

Regarding dead wood: “Why do we hire live wood and kill it?”

Kohn puts a deliberate order to his suggested actions (see the bottom of the ‘Exercise in Futility‘ post) and he most certainly doesn’t stop at removing contingent rewards and stopping performance appraisals…this is actually the point at which the real (and interesting) work can start to be done, with the process performers on collaboration, content and choice.

Okay, so you still think you’ve got a slacker:

If we are to consider the ‘slacker’ accusation, we also need to consider the other side of this coin, the supposed ‘talent’. Together, we can call these ‘outstanding performers’ where, as Scholtes explains:

We need to “use ‘outstanding’ in the statistical sense, not in the psychological sense.

Statistically*, ‘outstanding’ refers to something occurring outside the current capabilities of the system.” …and therefore it makes it worth investigating as to what is happening and why.

* Note: There is variety in everything. We should not be tampering when there is nothing special about this variety. So ‘John’ achieved more than ‘Bob’ this week…big deal, we would expect differences…but is it significant, and is it consistently so?

Scholtes provides the following guidelines for our response to outstanding performance:

First: Determine for certain if they are truly outstanding:

  • Does (quality) data (properly) substantiate this ‘outstanding’ performance?
  • Does this data cover a sufficient timescale to indicate consistent performance at this lower or higher level?
  • Is there consensus among the outstanding performers’ peers (from observation, not gut reaction or rumours)

If the answer is ‘No’, it’s not actually outstanding!

If the answers to the above are all ‘Yes’ then:

Second: Investigate to discover what is behind this occurrence (using data!):

If the person is ‘positive’ outstanding, do they (for example):

  • use better methods which can be taught to others?
  • put in more hours?
  • have a wider range of skills?
  • have more experience?
  • have more native talent?
  • …

If the person is ‘negative’ outstanding, do they (for example):

  • need to learn a better method?
  • need to pick up speed?
  • need coaching or mentoring for a while?
  • lack the basic requisites for the job?
  • …
  • are they going through a difficult period?

And, depending on the explanation:

Third: Formulate an appropriate response:

For ‘positive’ outstanding:

  • teach methods to others;
  • provide higher pay* to recognise their change in market value (* but NOT contingent!)
  • provide more latitude in job definition

For ‘negative’ outstanding:

  • coaching, mentoring, training
  • provide greater structure for a while
  • get counselling and support
  • find a more appropriate position
  • …
  • Finally, sensitive and fair dismissal

If you take the last response, you still have a systems problem – you need to deal with how you ended up with this scenario.

Seddon deals with the issue of an individual’s supposed poor performance (and it being considered a ‘people problem’) in a similar vein to Scholtes. Put simply, there’s a whole host of questions that need to be asked about the system in which the individual operates before you can fairly arrive at the conclusion that the problem is with the individual.

The categories of questions, in order, are:

  • Is it an information problem? (do they know purpose, capability, flow?)
  • Is it a method problem? (waste? system conditions such as structures, policies, measurement, IT?)
  • Are extrinsic motivators the problem? (i.e. distractions from intrinsic motivation)
  • Is it a knowledge problem? (necessary knowledge to do the job?)
  • Is it a selection problem? (necessary attributes to do the job?)

All of the above are the responsibility of management to resolve.

  • Finally, is it a willingness problem?

Then, and only then can you conclude that you probably have the wrong person for the job.

“95% of the reasons for failure to meet customer expectations are related to deficiencies in the system…rather than the employee…

…the role of management is to change the system rather than badgering individuals to do better.” (Deming)

It’s very easy for a manager to blame a person. It’s a lot harder for them to work out what the systemic cause is. One of these approaches can improve the system, the other cannot.

A final Deming quote to ponder:

Question from ‘Management’: [what you are saying] “implies the abolition of the annual merit rating system [performance appraisals] and of management by [cascaded] objectives….but what will we do instead?”

Deming’s response: “Try leadership.”

The Emperors Clothes

giantknave Brain Farts , , ,

emperors_new_clothes_550There are some funny conversations going on around me at work at the moment. I can hear sentences starting with:

“Now, I don’t agree with it either BUT…; or

“Let’s just muddle through and see what we can come up with…; or

“Let’s try and make this a painless as possible…; or even

“Let’s just pretend to play the game…

What’s this all about? Well, it’s ‘end of year’ time at work and the performance review show is just ramping up. I can feel it all around me. The words quoted above are what I can hear from managers (appraisers) when talking with their teams (appraisees).

These bizarre yet established conversations aren’t new to this year. I hear them every year.

The children’s story ‘The Emperors Clothes’ springs to mind. Everybody knows something important but can’t bring themselves to tell the Emperor….so they carry on with the charade.

I feel like the little boy in the story who dared to say something….and here it is: An Exercise in Futility.

 

Of note: All these managers do want to talk to their teams but not through an annual judgement exercise.

An Exercise in Futility

giantknave Brain Farts , , , , ,

Dalmatian-chasing-tail-006Now this post is a bit longer than normal, but I hope that the 1st quote grabs you and sucks you in…I reckon that once you start you won’t stop 

“Performance evaluation is an exercise in futility” (Scholtes)

Every organisation operating a ‘command and control’ management system uses the performance appraisal as a key tool in its arsenal.

The contention in this post is that one of the key steps in providing an environment that fosters a highly motivated and capable workforce is to scrap the performance appraisal system and replace it with something far better.

Problems with performance appraisals

Let’s first consider just some of the problems with actually carrying out what might be considered a valid performance appraisal of an individual – that’s you and me:

  • Appraiser Bias: Performance assessments tell us as much about the appraiser as the appraisee. It tells us how harsh a critic the manager is, how good a job he/she expects the employee to do, how well the two of them get along, what basic values they share and even whether their backgrounds are similar; 
  • Management performance: The quality of management has a huge influence. “any individual’s performance is, to a considerable extent, a function of how they are managed…so the manager is in part evaluating him/herself without appearing to do so.” (McGregor) 
  • Interdependence: None of us act alone. “Almost nothing is accomplished by an individual operating alone. Most work is obviously a collective effort. Yet even workers who seem quite independent depend on others for ideas, stimulation, feedback, moral support and administrative services.

When an individual makes some heroic effort and accomplishes an extraordinary task, often he or she can take the time to do that work only because others have filled in on the less heroic parts of the job. When someone is credited with a success, he or she is individually honoured [e.g. by money, award, public acclaim] for what was most likely the work of many.” (Scholtes)

  • The effects of the system: Deming used his famous red bead experiment to illustrate this point simply yet brilliantly. He explains that the performance of the employee is 95% governed by the system that they work within. The ranking of people is actually merely ranking the effect of the system on the people. 

“It is simply unfair to the extent that employees are held responsible for what are, in reality, systemic factors that are beyond their control.” (Kohn)  

  • A straight jacket: Appraisals ‘compare’ everyone against a uniform expectation (albeit per manager – see 1. above) rather than understand and embrace the reality that everyone is unique, with very different (often subtle) contributions to make.

Deming wrote the wonderful words that “a [true] manager of people understands that people are different from each other. He [or she] tries to create for everybody interest and challenge and joy in work. He tries to optimise the family background, education, skills, hopes and abilities of everyone. This is not ranking of people. It is, instead, recognition of differences between people, and an attempt to put everybody in position for development.”  

  • Ignoring variation: The work of each individual is characterised by variability…it will naturally fluctuate! You cannot be the same every minute of every day….if you were, you would be a machine! Further, the major causes of such variation are beyond the attributes of the individual. So should you be criticised or praised because of ups and downs in your supposed ‘performance’ outside of your control?

I could go on…but I fear that I would write a book!

The performance appraisal creates the illusion that management have indeed isolated and determined the performance of an individual. Worse still, it allows management to abdicate their responsibilities – they will simply meet the person each period, get the person to justify themselves (with evidence!) and then judge them….no need to actually get to understand who they are, what their dreams and aspirations are, and therefore discuss how they can help them become reality.

The effects of performance appraisals

Most organisations running performance appraisal systems will answer back in denial: “yes, we know all about the above and we have ‘continuously improved’ our process through much iteration so there’s no such problems here!”

I would contend that they may have succeeded in creating a (laborious, bureaucratic and wasteful) process that masks (i.e. disregards) the above, but they cannot remove them.

But, for the sake of argument, let’s just suppose they have….what about the effects of the performance appraisal:

[the system by which merit is appraised and rewarded is] “the most powerful inhibitor to quality and productivity in the Western world….it nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry…and leaves people bitter.” (Deming)

“Even if performance appraisals were adequate to gauge how well people were doing their effects are usually so destructive that they shouldn’t be used anyway. Not only is the fact of interdependence in the workplace ignored, but people are discouraged from cooperating in the future.” (Kohn)

“Appraisals leave people bitter, bruised, despondent, dejected, feeling inferior, some severely depressed.” (Seddon)

What do people running performance appraisals say they are for?

Rather than simply looking for a new technique to continue with the old flawed logic, let’s consider why people are being evaluated.

Kohn notes four ‘defences’ as being used by those that contend performance appraisals are required. They say they are needed to:

  1. Determine how much each employee should be paid and/or who should receive various awards and incentives;
  2. Make employees perform better for fear of receiving a negative evaluation or in the hope of getting a positive one;
  3. Sort employees on the basis of how good a job they are doing so we know who to promote; and
  4. Provide feedback, discuss problems, and identify needs in order to help each employee do a better job.

Taking each of these in turn, and using some of my previous posts so that you and I can finish this post today!!…

Regarding 1: Please read the following posts already on the blog that debunk the use of contingent rewards: The Chasm and Money as pay

Regarding 2: Please read Oh no, not that old theory and Making a wrong thing righter that explain why ‘carrot and stick’ approaches to motivation are counter-productive.

Regarding 3: Please read Anointing heroes. Further, there is a whole post to be written on promotion (I’ll add it to my list!). It’s not a good reason to carry out performance appraisals.

Defences 1 – 3 are about doing things to people…which leaves 4 as the only one which could be about working with people….mmm, if we got rid of 1 -3 then this is sounding promising! Read on.

So what should we replace performance appraisals with?

Kohn suggests that, if the over-riding purpose is to foster improvement (for the individual, and for the organisation) then the following principles take shape:

  • A two-way conversation:
    • An opportunity to trade ideas and ask questions;
    • NOT a series of judgements about one person pronounced by another;
  • A continuous process, rather than a time bound event (e.g. annual, quarterly);
  • It never involves any sort of relative ranking or competition (no scoring!);
  • It is utterly divorced from decisions about compensation
    • “Providing feedback that employees can use to do a better job ought never to be confused or combined with controlling them by offering (or withholding) rewards.” (Kohn)
    • It is “foolish to have a manager serving in the self-conflicting role as a counsellor (helping someone improve performance) when, at the same time, he or she is presiding as judge over the same employee’s salary” (Meyer)

Essentially, Kohn is arguing for good old fashioned regular and meaningful conversations between employee and manager within an environment of openness and mutual trust. I’ll have some of that!

Scholtes takes this further: Performance appraisals focus on the wrong target! The true opportunities for improvement are in an organisation’s systems and processes, rather than individuals or groups. Instead of focusing on individuals, managers should be working with individuals to focus on the problems with the system.

It’s worth noting that an organisation taking the above seriously won’t be able to move to this highly desirable state overnight: Once the scoring, ranking, rating and rewarding has been stripped out, it will take a bit of time for managers to establish the trust of their employees.

On the plus side, the vast majority of managers will relish the removal of the hugely wasteful processes and painful conversations of the old way…and will really enjoy spending the newly created time actually helping their team.

What about the advice from all those expensive consultants?

You will find queues of expensive consultants who will tell you otherwise.

Scholtes notes that most ‘research’ on performance appraisals consists of opinion polls asking “which kind of performance appraisal do you prefer?” They are usually:

  • conducted by consulting companies selling their ‘Human Capital’ services;
  • filled out by HR managers who, as a group, are predisposed in favour of performance appraisal…no disrespect meant but it is, after all, a major part of their (current) job; and then
  • sent back out to the same group of HR managers in glossy consultancy report format along with a nicely worded proposal as to how the consultancy can help implement what they now claim to be ‘best practise’ and move them up some supposed ‘maturity curve’!

Scholtes notes “when biased people ask the opinions of biased people, the results cannot be described as research.” This quote is so relevant to many a ‘big consultancy’ report purporting to be ‘research’.

…and finally: what do the Japanese do?

A really nice story from John Seddon:

“I was asked to write an article exposing the problems with performance appraisals for a Sunday newspaper. I submitted my 1st draft.

  • The editor suggested I should provide balance by talking about what to do instead.
  • My response was that you don’t need to find an alternative to doing a bad thing – you should just stop doing it!
  • The editor said ‘ring your friends in Japan and find out what they do’.
  • …so I did.
  • I asked ‘what do you do about performance appraisal?’
  • The reply was ‘what is that?’
  • …I explained.
  • Japanese people tend to be too polite to laugh.”

Making a wrong thing righter!

giantknave Brain Farts , , ,

wrong-way-sign“The righter we do the wrong thing, the wronger we become. When we make a mistake doing the wrong thing and correct it, we become wronger.” (Russell Ackoff)

I’ve worked in a few companies over the years, both in the UK and NZ. One thing that I have noticed is what seems to happen with incentive schemes:

  • They start off as a supposedly great management idea to ‘motivate’ (!) employees to do better and are deliberately set up to be simple to understand and simple to operate;
  • After the first annual iteration, feedback is received about the incentive system and much is said about how it isn’t very fair (such as “how come he got a 4.3/5, yet my manager didn’t give anyone more than a 3” or “great, I get marked down for something I have absolutely NO control over” or….you can fill in the blanks!);
  • …so Human Resources are asked by management to go into redesign mode, make it more ‘sophisticated’ (read ‘complicated’), and release ‘Incentives 2.0’…which requires much effort to explain what has changed and why this now makes everything okay;
  • …and then next year yet more feedback is generated…which leads to yet more redesign. This redesign actually makes it;
    • more complicated – “how does it work again?”
    • more onerous – the need for evidence!
    • more inward focused – away from customer work; and
    • more difficult to explain and carry out;

This cycle continues until, if we were to allow ourselves the space to stand back, we would see an ‘industry’ of work surrounding the incentive mechanism, which most people intensely dislike* and mistrust.

* This isn’t a dislike of the eventual monetary reward, but of the game to be played to get there.

A sure sign of reaching such a state is when you see:

  • Fancy presentations/ brochures, and drop-in clinics/ help lines to explain the process;
  • A frenzied state of panic when ‘performance review’ time comes around (with managers ‘in town’ to judge you);
  • Corridor banter discussing what’s happening (“have you been ‘done’ yet?; what evidence did you gather?; if you scratch my back, I’ll scratch yours; how did it go”…again, I’m sure you can complete);
  • Management then having to perform meetings to compare/ contrast and ‘normalise’ the data…“so that it’s all fair”;
  • A feeling of resignation by the employees of “I’m not interested in what I get anymore….just as long as it’s about 66%, I can’t be bothered any further”;
  • Yet more corridor banter discussing who got what, how they feel and what they are going to do about it!;
  • De-motivated employees, instead of the intended motivation;
  •  …and, finally, HR asking for feedback on the process so that “we can make it even better next year!”

There is no ‘perfect incentive scheme’. You can’t keep going until you’ve ‘solved it’ simply for the fundamental fact that contingent rewards drive the wrong behaviours.

So, what am I saying – no money?

Absolutely not! I believe that we should all share in the success of our organisation. But contingent rewards are not the way to go about it.

Now, you may respond with “but that’s what our people are used to…we can’t take it away from them now!” I put forward the following quote:

“No matter how long you have been on the wrong road, turn back.” (Anonymous)

I could put forward a ‘share in the success of our organisation’ method…but that’s not the point. There will be many ways to do this…but first we need to see the need for, and accept, a change in direction.

Anointing heroes

giantknave Brain Farts , , ,

super-heroDr Deming’s red bead experiment simply yet brilliantly shows that, when we rate and rank people, we are mostly rating and ranking the effect of the system on the people.

“Apparent performance is actually attributable mostly to the system that the individual works in, not to the individual…the so-called merit system introduces conflict between people and destroys co-operation. Emphasis goes to achievement of rank, merit, not on the work…judging a person, putting them into slots, does not help them to do a better job.” (Deming)

To illustrate this point – compare two people performing two different roles:

  • If you give me a job (let’s say focused 100% on ‘improvement’) in which I can look good and am enabled to help people then, guess what, I’ll be their hero;
  • If you give me a job in which I have to ‘shovel the proverbial sh1t’ (let’s say as an over stretched ‘worker’ being asked to achieve the impossible) then, guess what, I will hardly be noticed….unless I’m not making my arbitrarily-set numerical activity targets…in which case I will be dealing with even more pain.

…who’s the real hero?!

I think anointing certain people as heroes because of what the system enabled them to achieve is a very unhealthy practise (for the supposed heroes’ and for the rest).

After explaining to a colleague how ‘the system’ has a huge influence over what someone can achieve, she made a really great ‘aha’ comment back to me:

It goes something like this:

“…that explains why I couldn’t work out whether that project manager working for me was any good!    

  • on one project he was superb: great communications, fantastic results on time/ within budget etc.
  • on another project he seemed terrible: nothing was going right, completely off track and seemingly no ability to do anything about it.

I now understand that I was judging him when, in fact, I should have been considering what the system was allowing him to achieve – the first project had a clear sponsor and much backing, the second project was an organisational orphan with difficult people and many historic issues, a virtual hospital pass!”

I am a mathematician at heart and Dr Deming used a wonderful formula to explain the above…bear with me:

  • Let x be the contribution of an individual
  • Let y(x) be the effect of the system on his/ her performance
  • Finally, let’s suppose we could measure the complete result of a person’s performance – a dubious idea in itself….but for the sake of this post, let’s suppose we have a number for his/ her apparent performance, such as 8 mistakes in the year or sales of $800,000.

Then we have the equation        x + y(x) = 8

(i.e. the individual’s contribution combined with what the system enabled him/ her to accomplish will determine the outcome s/he can achieve)

Deming goes on to explain

“To rate the individual we need to know x. Unfortunately, there are two unknowns and only one equation. Johnny in the sixth grade knows that no one can solve this equation for x.

Yet people that use the merit system think that they are solving it for x. They ignore the other term y(x), which is predominant.”

Now, a standard response to the above from people working in a command-and-control system is as follows:

“…but some people really are rubbish and/or lazy… and the above allows them to use the ‘it’s the system’ thing as an excuse!”

A couple of thoughts back:

  • If someone isn’t capable of performing the role they are being asked to perform, then:
    • are we failing to develop them into this role? or, if we’ve (truly) done what we can here;
    • have we incorrectly put them into this role?
  •  If someone hasn’t got any interest in their role, then:
    • has this been ‘beaten out of them’ by the system? (a very common reality) or, if not;
    • have we misunderstood or, worse, not (properly) considered what motivates this person?

Rating and ranking them ignores and hides the above. It tries to make it their problem….but who is responsible for the environment in which they work?