Performance management – HR’s most hated tool?

Performance management – HR’s most hated tool?

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SUMMARY: It’s time to bin performance management as we know it, argues Heidi Spirgi. There isn’t any more hated tool in the HR universe.

So says Heidi Spirgi, senior vice president of product and technology services at The Marcus Buckingham Company, of performance management, loathed in equal measure by the HR department and employees alike. Spirgi continues:

“The entire industry the entire business community knows that performance management as it’s been used in business for the last 20 to 30 years is broken and flawed, yet very few alternate models have been offered.”

The reason for this antipathy is simple. Performance management in its current form simply doesn’t do what it says on the tin: manage performance. As Spirgi explains:

“What do the words actually mean? – to manage the performance of an individual or a team. And to manage the performance of an individual or a team any leader knows there’s a lot of things that have to happen that have nothing to do with what we call the performance management process.”

Instead, performance management has become a “tick-in-the-box” item and a means to justify the annual merit increase, but Spirgi maintains: “It really has nothing to do with actually accelerating performance which to me is really the interesting question.”

Top three

There are three key things that answer this question and influence and accelerate performance, suggests Spirgi. The first of these, she says, is having an effective team leader:

“What makes the difference? The difference is the team leader and we actually all intuitively know that the leader makes a difference. I’ve spent the last 20 years focusing on coaching performance or engagement, but we haven’t got that engagement in the workplace. The reality is we have delivered absolutely nothing for the team leaders.”

The technology supporting performance management has equally been addressing the wrong issues. It may have moved on from purely focusing on HR to addressing business issues, but Spirgi maintains, it still isn’t targeted effectively:

“What that’s meant for the most part is that we have built systems that are easy for the employee or HR to use. They are not really aimed at the team leader. It doesn’t really help them. We have still been building technology for the enterprise, not the team leader.”

From 1980 to 2000, the emphasis was on reducing the admin burden for HR professionals. These systems were great at reducing admin, but: “Did it drive and increase engagement? Alas not,” asserts Spirgi.

From 2000 to the present day the focus has shifted onto process automation. As for the future, Spirgi suggests:

“We have accomplished a lot, but have failed to address or shoot at accelerating business performance. I believe we are on the cusp of a third wave and that’s going to be a lot about the team. But our tools are not built for this team-based work.”

The second greatest impact on performance management after team leaders, according to Spirgi, is the shift from big data to smart data:

“We cannot make any meaningful big data discussions if our data is bad and I maintain that most of our data is bad…Our data is poor because we don’t keep it current. It’s also bad data because its data at the wrong level – at the enterprise level not the team level.”

Broken engagement

One of these sources of data is the engagement survey, another HR tool that is “broken”, believes Spirgi.

Engagement is an “extraordinarily powerful indicator for performance” but only when you get it right. This often doesn’t happen, points out Spirgi, because:

“We are asking the wrong questions in engagement surveys. We don’t have a line of site to engagement – we ask questions about work/life balance. There’s no proof that a higher level of work/life balance increases productivity.”

Real business doesn’t happen in yearly cycles, unlike most engagement surveys or performance management reviews. The average time it takes to deliver the results of an engagement survey to the business is four-and-a-half months – the business will have moved on in that time.

Engagement is again dependent on the quality of the team leader, believes Spirgi:

“Engagement lives within the team and is a function of the team leader. You can have a team in an organization that is dying and it will still be engaged.”

Another problem with current performance management is that performance data is biased. Research over the last two decades has shown that the rating you give a member of staff is 61% a reflection of the rater and how s/he sees the world.

This “idiosyncratic rating effect” means that people cannot help but be subjective in their so-called objective measurement of employee performance. Spirgi explains:

“Let’s say I rate you on strategic thinking ability. No matter how hard I try my reaction is a reflection of how much strategic thinking I do and how difficult I think it is.”

The third biggest impact on performance management focuses back on what team leaders do naturally. Spirgi says:

“There is one thing that all great team leaders do consistently and that is they have frequent strength-based conversations about near-time future work. We call them check-ins.”

These check-ins should not to be mistaken for feedback. Feedback is retrospective and implicitly or explicitly involves rating how someone has performed.

As an aside, Spirgi disposes of the myth that millennials love feedback. Not true, she insists. What millennials actually crave is attention.

Through check-ins – these frequent, preferably weekly, talks with employees – it’s the team leader’s job to ask people what they are working on now and in the next few weeks, and ask how they can help. This is focused on individuals and what their work strengths are (rather than highlighting what they could have done better). They simply, says Spirgi: “Focus on who you are and your strengths.”

It’s essential that these performance-based conversations are separated from compensation. Otherwise, Spirgi warns: “As soon as you introduce compensation into something it either changes or shuts down open conversation. If we’re really trying to drive performance, it’s all about not shutting down voice.”

Technology’s role

It’s the job of the technology industry to build solutions that encourage and support the abilities of team leaders, deliver smart data, and create tools that actually capitalize on what great team leaders do naturally. In that way, the not-so-good leaders can bolster their skills. Spirgi observes:

“I’d begun to think that HR technology was really about optimization and administration of HR processes. There’s value in that, don’t get me wrong, but I think I’d lost the faith that it could be transformative. Where technology comes to play is helping the average team leader do the activities that great team leaders do naturally.”

So, the technology will address how to operationalize behaviors that are known to drive high performance and how to build tools for team leaders that drive those behaviors.

One of the key qualities of this technology should be personalization. Check-ins are a form of “contextual coaching” applying help at the time it’s needed, which means, says Spirgi: “From a tech perspective it has to feel like it was built for you.”

The 80:20 rule of building technology that fits the needs of most people is outmoded and should be replaced by the idea of one-size-fits-one. Technology needs to be relevant to the individual and contextual and organizations have no choice but to respond. Spirgi warns: “If we continue to act with this peanut butter approach we are going to alienate our workers.”

Performance management is a complex task – which is why current technology has failed to live up to its promises. Ultimately, it boils down to trying, somehow, to bring all leaders up to the level of top-performing leaders. Spirgi says:

“If we were all great team leaders, we probably wouldn’t need technology or performance management – they would intuitively have the tools to be able to manage their teams.”

Until that happens, we need to find the technology to help.

My take

Do performance management tools raise performance and do engagement surveys raise engagement levels? Probably not. Or at least not to the level that organizations desire and need.

The trouble with both of these HR management tools is that they are backwards looking. They look at past behaviors and attitudes and they are a measure or snapshot of the organization at a particular time. What they do not do is tackle the immediate future behavior and motivation of an individual employee.

Like all the best solutions, Spirgi’s answer to performance and engagement conundrum is simplicity itself: good team leaders create great results. Talented leaders coach and encourage the best out of their employees and raise engagement. As performance and productivity increase and so does productivity.

The answer may be simple, but of course, the execution is not. Talented leaders are vastly outnumbered by their average or poor cohorts. Which is where technology comes in, but it’s not performance management technology as we know it. The new look performance management tools, (maybe a new name is needed?) needs to be personal.

In a way this is a reflection of what is happening across industries: marketing and advertising is more indivualized, so shouldn’t performance management?

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