Performance review season is here — but is there a better way?

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Filed on 31. Oct, 2018 in Business Toolkit, Contributors

By Mike Cook
For The Bellingham Business Journal

It is time in many companies for the annual ritual of preparing the employee performance review. If you are fortunate, you and your management team have come to realize that the only people who look forward to performance reviews are those in human resources. The HR department is less interested in improving the performance of employees than in providing supporting documentation in many cases to support or question a management decision to terminate an employee.

Research over the years has indicated, especially when reviews are tied to annual salary increases, that the reliability of this process in largely in doubt. Managers, for all their bluster about who their good people are, frequently prefer to avoid the uncomfortable conversation involved in giving an employee an unfavorable review, even if it means they settle for offering a token salary increase.

So, what then should management and managers in particular put their focus in if they are interested in improving overall productivity?
In the first place it is honestly difficult to get a fix on individual performance, even when there are objective measures put in place, except maybe in the case of sales people. Even then there are rare instances when a sales person’s productivity is entirely a function of their performance if we take into account sales support and other back office functional areas.

In the modern organization, as contrasted to historical bureaucracies, employees are more likely participating in a network of performance where productivity is as much a function of the total performance of the network as it is any one individual’s efforts.

In the network configuration each node in the network (employee) is constantly flexing and accommodating the performance of any other network from which they receive support or requests. In much the same way as trapeze artists adjust to accommodate imperfections in their partners execution, so too do networked employees cover for and create the need for adjustments in real time.

Now back to the question, what should be a manager’s focus? Have you heard the term employee experience? It intends to describe what’s next in encouraging productivity beyond employee engagement. In my view this distinction could not come soon enough. In a recently published article from McKinsey and Co., titled “Time for an Employee Experience Intervention,” the authors introduce and then expand on the concept of employee engagement, taking it out of the paternalistic paradigm of employers making employees happy. In fact, “manager” may no longer adequately describe the role that needs to be played now, performance facilitator may make more sense. Here’s what the McKinsey authors suggest…

“What is critical to improve employee experience?
1. Start with performance – not experience for experience’s sake. Understand your organizational DNA that supports business performance. We measure this DNA via our organizational health index survey. It underscores that companies with a well- understood DNA post outsized financial performance of three times total return to shareholders versus companies with weak organizational health.

2. Get obsessed with your employees. Apply the best of customer experience – and go further. Examine how employees interact with the company throughout their career. Go beyond mapping journeys based on HR processes to recognize the moments that really matter, then
make those extraordinary.

3. Recognize it’s not about free sushi for lunch. Experience is often confused with fancy perks. They play a role but starting there probably won’t make a material difference. Determine which elements of EX will fix pain points and strengthen performance – ranging from workplace environment, ways of working, and the implicit contract between employer and employees.

4. Build a sustaining culture. Experience is about lasting change in how an organization operates and requires a culture change, not just slogans and short-term incentives. Altering how work gets done means changing ingrained employee habits, which requires recognizing the mindsets, values and beliefs that drive them and designing evidence-based interventions to shift daily behaviors.

5. Bear in mind it’s for the people, by the people. Empower your employees to design and develop solutions. Use agile approaches to let them prototype and scale solutions themselves. Provide the guardrails and skill-building to generate ideation, trial, and iteration. This will save money, build employee ownership, and make change stick.

6. Ditch an annual employee survey. Experience is lived, deeply felt, rapidly changing, and highly personal. Annual engagement surveys don’t provide insights that are deep, fresh, or personal enough to effectively shape experience. Use a mix of different approaches, from real-time measurement and mining employee data to using novel technologies — such as biometrics — and rich qualitative sources like mobile video diaries. These will deliver an immediate pulse on what experience is really like and where to focus for the biggest impact”

So now the question is to you as an employer or manager; do you want to continue as you have, with a focus on people following your orders or are you ready to move forward and become a concierge of performance.

Mike Cook ‘s columns appear on BBJToday.com every other Tuesday. He facilitates a CEO peer advisory group in the Whatcom/Skagit area. He can be reached at mike.cook@vistagechair.com. He recently published ‘Thriving in the Middle: Why Managers Need to Be Coaching Each Other.”

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bGk+PHN0cm9uZz53b29fc2xpZGVyX2hlYWRpbmc8L3N0cm9uZz4gLSBSZWNlbnQgbmV3czwvbGk+PGxpPjxzdHJvbmc+d29vX3RoZW1lbmFtZTwvc3Ryb25nPiAtIFRoZSBKb3VybmFsPC9saT48L3VsPg==