Down With Performance Reviews!

I am not a fan of Performance Reviews. My own experience has been that they consistently fall short of my expectations, and I'm speaking not only as a recipient, but as someone who has written my fair share over the years. They tend to be either too shallow to do much good, or they create an unnecessary rift with the employee who hopes (and often expects) to hear nothing but superlatives about their contributions.

I now have company in my views. Two authors—a professor from UCLA and an editor from the Wall Street Journal have written a book with a title that says it all: "Get Rid of the Performance Review!"

The writers, Samuel Culbert and Lawrence Rout pull no punches in their analysis. They believe the damage inflicted by reviews by far eclipses their benefit. Or as expressed by Culbert, reviews are "the most pretentious, fraudulent, ill-advised exercise taking place at companies." (Tell us how you really feel, Sam--)

Completely eliminating reviews, though, is not necessarily the answer. Behind the charade is actually a good intention: to shine a spotlight on the employee's true talents and contributions, and to find a way to develop their skills and capabilities. So it's more about changing the process and tools.

There are a lot of useful ways to accomplish this, but one of the more intriguing is to change ownership of the experience from being management driven to employee-led. We now expect employees to own their careers, so doesn't it make sense that they own the resources that help map and guide them on their chosen path? A review that therefore highlights the employee's achievements, written in their own words, and accompanied by a vision for future contributions, sets the stage for a meaningful discussion.

So if you want to engage employees rather than generate angst and anxiety, take a look at how reviews can be revamped to really focus on the employees' needs, preferences and aspirations.
 
Jennifer

Pornographic Management

I believe that language is a powerful force that shapes who we are, and in turn shapes our organizations. How we describe our mission and values, how we communicate inside and outside our organizations, and even the nature of our conversations all have profound influences on our business.

As an example, what does the phrase "performance review" conjure up for you? For most people, words like "aggravation" and "pointless tasks" come to mind. Yet, despite the label the intention of a review is to create a vehicle for helping people grow. So after years of bad experiences and bad press, even the best review process will forever be branded in a negative way as long as it's called a performance review.

With language in mind, imagine my reaction when I ran across the phrase "pornographic management" while doing some research. It jumped right off the page for me, and I immediately needed to learn more. In an article by Stephen Long, http://www.europeanbusinessreview.com/?p=1510, he characterizes it as leaders who live under a cloak of fear—fear of making mistakes, fear about what's next in the economy, fear for their very survival—and as a result they work in a cautious, emotionless way. Strategies are followed to the letter of the law, blame is shifted, and everything becomes a "shrug"—that's just the way it is around here. The world becomes objectified and as a result lacks a soul.

Two things came to mind as I thought about the concept. First, to label this type of leadership as "pornographic" felt harsh yet right to me. Organizations that function in this way—and I've experienced it firsthand—create environments that stifle all energy and talent, promoting inertia and hostility. They're positively obscene.

At the same time, though, Long was describing a prevalent way of operating in many businesses today. Fear for tomorrow and worry that the bottom will fall out of the market again is promoting behaviors by leadership that are wrapped in intense anxiety. These leaders may not be intending to, but they are enacting pornographic management in their effort to serve the bottom line.

People are starting to see this as "normal," or just the way it is. But it makes me wonder, if we start calling it what it is—pornographic—will it prompt leaders to search out new behaviors, or at least push aside the fear and begin a shift toward an optimistic future? And have you witnessed examples of pornographic management? Would love to hear your comments!

Jennifer

Apple’s “Multiplier Factor of Excellence”

Steve Jobs is the face of Apple, and much has been made about how powerful his presence is in the organization. Perhaps more than any other company in the marketplace, there is a belief that Apple's very existence depends heavily on Jobs himself. This was made clear in recent years as Jobs has fought cancer; you could see the stock price fluctuate as his health reports leaked into the marketplace.

But it doesn't take much thought to realize the absurdity of such a bias. Yes, Steve has a strong influence on Apple's mission, processes and products. But to suggest that he single-handedly carries the load of $32 billion in revenue, 34,000 employees and bunch of cool products, just doesn't make sense. So what's the real secret behind Apple's success?

During the recent announcements of their new product, the iPad, Wall Street discussed how Apple distinguishes itself among its competitors. One reporter shared the following observation:

Truly outstanding designers, engineers and managers, Jobs says, are not just 10 percent, 20 percent or 30 percent better than merely very good ones, but 10 times better.

So while Jobs may not be the super hero that the world makes him out to be, he's still a brilliant guy. He's figured out that to create world class products that people line up for takes more than expressing his own ego. It takes a phenomenal team, and Apple has done an incredible job of finding, motivating and growing a very talented group of individuals.

With Jobs as the face of Apple, they have a strong and smart personality to represent them in the marketplace. But what really makes him smart is the fact that he understands it truly is about talent—just not his alone.


Jennifer

“Dear Abby” Has Interesting Company

A couple of weeks ago I shared a post in which "Dear Abby" commented that the flood gates are poised to open in businesses across America, resulting in the exodus of employees who are profoundly disappointed in how their organizations handled the cost cutting associated with the recession. Well, it appears that Abby is in good company and it comes from an unexpected group within the business world.

Robert Half and Associates recently conducted a Chief Financial Officer survey which examined the "lessons learned" from the recession. I assumed as I anticipated their likely answers that the majority of attention would be given to concerns such as, "Reduce costs sooner," or "Be willing to take on more organizational risk to alleviate financial risk." However, the response that was considered #1 was: "Place greater focus on maintaining employee morale."

Business, by its nature, is left-brained and pragmatic, and CFO's in turn are essentially the poster children of this perspective. It was therefore with both interest and surprise to see this group step back and recognize the implications of the financial decisions that were made. While the distress felt across organizations as waves of employees were laid off and comp and benefits were cut would be hard to ignore, it could also have easily been rationalized. After all, better to hurt a few rather than lose the entire the company. These CFO's therefore get bonus points from me for their willingness to acknowledge the unintended consequences of some of the decisions that were made.

And, the good news is that an investment in building a substantial, employee-centered culture pays off not just today, but also in the future. Research by Barbara Frederickson of the University of North Carolina has shown that a foundation of strength and positive emotions tends to create resiliency; people are far more forgiving during a crisis if they see it as an anomaly rather than as more evidence of cynicism and distrust. So there's no time like the present for CFO's and their fellow leadership team to make investments in employees, and therefore investments in the company's future.

Jennifer

New World/New Rules

I recently read an interview of Jeff Bezos, the CEO of Amazon.com. The focus of the article was on the Kindle, their ultra-cool wireless reader.

When the Kindle was launched, the breakthrough wasn't in the concept; the first e-readers were introduced over a decade ago. But they were the first to finally get it right, addressing everything from the light weight of the hardware, an easy to read screen and access to a wide-range of books.

But I think the real breakthrough was that it was Amazon that put the whole package together, and not Apple, Intel or even Research in Motion, all of which are in the business of manufacturing computer hardware. After all, Amazon is a retailer; they're supposed to sell other people's stuff, not make it. Yet they broke some rules and did it anyway.

I like Jeff's explanation for how this came about. Here's what he said:

"There's a tendency, I think, for executives to think that the right course of action is to stick to the knitting—stick with what you're good at. That may be a generally good rule, but the problem is the world changes out from under you if you're not constantly adding to your skill set."

Maybe Jeff should have said, "It used to be a good rule." We're all witnessing how quickly products and services are becoming obsolete. That suggests that companies need to assume they're going to have a short lifespan, or instead they need to become much more creative and much more aggressive about how they define themselves in the marketplace.

Amazon took a risk when they stepped out of their routine, but it has clearly paid off. The Kindle is now their #1 selling product. I can't wait to see what their next reinvention is going to be!

Jennifer

Even “Dear Abby” Knows the Score

I still like to read the print version of the newspaper, and when I'm paging by "Dear Abby" I'll usually take a quick look at the trials that other people are having. While the juicy stuff is often about a social or family dilemmas, businesses should take notice of a recent post.

"Bitter in the Northeast" wrote in to complain about her job situation. Apparently, she is a good performer, based on her reviews, but because of the economy she hasn't had a raise in two years. If things were bad across the board, she wouldn't mind too much, but she's observed that the company owner has recently bought a new luxury car and taken some nice vacations. Her question to Abby was, does she have a right to be upset and feel that she's being taken advantage of?

Here's what Abby said, in its entirety:

"If your employers are claiming poverty while indulging in conspicuous consumption, your feelings are understandable. And as soon as the job market improves, I'm sure you will be only a part of the stampede of fellow employees seeking another job. With your outstanding reviews it shouldn't be too difficult to find one. Bide your time."

As the economy starts to warm up, the smartest and most talented employees will be thinking the same way—how has my company treated its employees during these past difficult months? Is this the kind of place I want to continue to make as my "business home"? And if "Dear Abby" is even arguing to leave rather than negotiate an equitable solution, than you know the predicted "stampede" is starting to form on the horizon.
Jennifer

Opportunity in Strengths

One of the strategies we use in our change practice is to start new initiatives by learning more about an organization's strengths. There is a lot of great research emerging that demonstrates that if you start change efforts by focusing on what's working well, you set the stage for a better solution.

We sometimes get push back on this concept…isn't it a distraction? Wouldn't it be better to get right to the problem so we can solve it and move on? While that may feel like the most direct route, it's not necessarily the fastest, especially if you judge the effectiveness of your effort by the quality of the solution, the degree of commitment and even the total time expended to achieve the end goal.

That's because when you start with strengths, it sets a series of positive changes into motion…you feel less defensive about the problem because you've been reminded of what's right in your world; you're actually more creative in your thinking (this has been proven by neuroscience); your strengths may serve as a resource for the solution you choose, so it's good to be clear on what they are. There are more reasons, but you get the idea. You might think of it as "priming the pump;" if you take that extra step up front, it will save you a lot of additional effort along the way.

A researcher at Berkeley, Dr. Christina Maslach, has uncovered the same idea through her work, and ironically enough she studies job burnout. According to Dr. Maslach, it's not particularly useful to focus on the trouble spots in a company in order to avoid burnout. As she says, "It's not just about how you get rid of the negative - it's how do you build the positive?" And when you start with what works well, you set a clear, positive direction for whatever you choose to do.

Jennifer

The Social in Social Media

Social media is a hot topic in business, and it should be since it represents great new sales and marketing capabilities for companies to explore. But some of the real value of this technology is often overlooked as we focus on its edginess and efficiency. Ultimately, I believe the greatest power in these new tools is in their ability to connect people.

This statement isn't meant to be either obvious or casual. One of the most important theories in change management today is that change is a function of people coming together and having conversations that impact thinking and prompt behaviors and actions. Essentially, "words create worlds." The universe isn't a fixed entity. It's dynamic and constantly evolving, and the force for these ongoing changes comes from people.

When Scott and I are with clients, we put this theory into motion. Right from the beginning, we listen and ask questions, with the goal of understanding not just the client's current environment, but to put our finger on the pulse of where they want to take their company in the future, and the bigger the thinking, the better. And these conversations aren't just with leaders; they're with literally everyone in the organization. We know from experience that the more people who are engaged in the process, the easier it will be to bring the solution to life.

The first reaction of people when they hear this is that it sounds slow and cumbersome. How do you achieve a common vision? Isn't it easier to make fast decisions with a small group and then move on to implementation? But just the opposite turns out to be true. Since everyone becomes actively engaged in the upfront thinking that leads to decisions and actions, they really get it. That means you don't need big communications campaigns or the challenge of "selling" your vision. They're ready to go, and boy, can they go! Right now, we have a client that says he can barely keep up with all the changes that are starting to happen inside his business, all of which is being done by teams of people across the company. And he can't be more delighted with the direction they're taking.

So we welcome all that social media brings us, since it enhances our ability to engage people in exciting conversations that can change the future.

Jennifer

Zappo’s Weirdness Culture

I friend of mine recently said, "If you're going to talk about culture, then you have to talk about Zappos." Since I agree with him, thought I'd check that assignment off my list!

Zappos started in 1999 as an online shoe retailer, and much like Amazon got their start with books, they've expanded into other retailing categories. From the consumer's perspective, they're passionate about service and believe that sets the stage for their business model and growth potential. But viewed from inside the company, they achieve this vision through one primary means: by creating a fantastic culture. In fact, the CEO, Tony Hsieh, describes culture as his number one priority.

What is Zappos like? They work from a set of ten core values. Some of these values are common among other businesses ("Deliver WOW Through Service," "Build a Positive Team and Family Spirit"). The one though, that I think speaks to the heart of who they are is "Create Fun and a Little Weirdness." "Weird" is their way of saying they value the individual…that everyone has something unique to offer, and it's those special talents that will make the difference in Zappos' success. So they're all about finding ways for each person to make a contribution and stand out from the crowd.

It was also weirdness that drove the creation of the values, as well as the ongoing evolution of the culture. When they were first starting out, Tony asked the organization to identify the values that would be most important, and they spent a year working through the discussion. So in the process, they imagined the company they most desired, and collectively gave it some shape and form. With that as a foundation, they now expect everyone to continually bring their culture to life, in whatever they choose. (By the way, that means their culture is constantly evolving to meet the needs of its employees, so a company who tries to "copy" it is going to be chasing a moving target!)

And by the way, Amazon bought Zappos last summer for close to $900 million, so a focus on building a fantastic culture clearly leads to the kind of business success investors are looking for.
Jennifer
P.S.  If you do want to learn the secrets of Zappo's culture, then buy their book about it.  It's written by the employees every year!
http://www.zappos.com/zapposcom-gear-zappos-culture-book-2009-edition-n-a

More Evidence that Engagement Pays Off

Another study was recently published which makes the link between employee engagement and profitability. This one was done by the Workplace Research Foundation in cooperation with the University of Michigan. (Full disclosure: Michigan is my alma mater. Go Blue!)

This was a hefty project. It took place over seven years (2001 to 2007) and looked at survey data from 3490 employees at 841 corporations that were listed in the Wall Street Journal 1000. Apparently this WSJ index covers 98% of the US gross domestic product, so the sample clearly cuts across Main Street.

What the researchers learned was that for every five points added to a firm's Employee Motivation Index—the instrument they used to measure engagement—it returned an additional 2% in stock price the following year.

Palmer Morrel-Samuels, PhD, was the lead author of the study. In describing his perspective on engagement, he makes a point to distinguish it from employee satisfaction. A satisfied employee is not necessarily productive; they may simply like the work environment. In comparison, when an organization is encouraging engagement, "It has to do with the intellectual challenge, pride in developing a sense of mastery and the need to make a contribution to both your job and society."

I've always believed that an enlightened organization sets in motion a wonderful virtuous circle of success. As employees become more engaged, they act in ways that benefit the organization and its customers. This in turn generates a handsome profit for the company, creating a solid financial foundation as well as the ability to reinvest in their best asset—their people. So for anyone needing a reminder, this study once again demonstrates that businesses and the people they touch all benefit from a healthy, vibrant workplace.

Jennifer

People are Messy

I recently facilitated a conference for the Forum for People Performance Management, and one of the livelier discussions was on the theme, "People are Messy." We were grappling with the idea that businesses have a wish for employees to be entirely predictable and dependable in their behavior. By this we mean they're never absent at inconvenient times; they never make a mistake, especially when it really matters; they don't bring personal concerns with them when they show up for work, whether it's broken pipes or sick children; the list goes on.

But in reality, people are messy, and we're messy because we're human. Things go wrong in our lives, mistakes are made and companies are impacted. However, instead of creating policies with the intent of limiting or controling the messiness, what if we simply accepted the reality of it, and designed organizations that acknowledged it?

For example, what if you abandoned the idea of set office hours, and instead told everyone to establish their own work schedule? That's what Best Buy did. Or what if you enacted the belief that productive work can happen anytime and anywhere, and rather than assign everyone a dedicated cube, you had them check out a desk to work at (assuming they needed to be in the office that day.) This practice is called hoteling, and IBM and Microsoft are among the many that use this strategy.

These are simple examples, but the idea is that when you take actions that are designed to reign in the messiness, you're probably going to fall short of your vision. And you also end up with unintended consequences. In the end, you're better off creating a system that can be easily adapted to the needs of many. The result will be an environment that ultimately brings out the best in people, even when they're being messy.

Jennifer

Pizza with Purpose

If you get a chance, pick up the February issue of Inc Magazine and check out the cover story on Nick's Pizza and Pub.

Nick's is a Chicago area restaurant started by Nick Sarillo in 1995. There are two locations, and they're enormous places designed to provide a great meal and a place to gather for family and friends. And while every town in America may have a pizza place, none are like Nick's.

Rather than focus on the taste of the crust or the speed of the service, his enterprise is about "Pizza with Purpose." He has established his business as a true partner in the community, and has created a culture that trusts his employees to work intelligently and respectfully without a "command and control" environment—and they're primarily teenagers!

He regularly hosts fundraisers for all kinds of local non-profits, and then donates 100 percent of the gross profit for the day. Right now, he's also offering "Half Price Mondays" in the dining room, and half price for takeout on Tuesday until the unemployment rate goes down.

From an employee perspective, he describes his approach to leadership as "trust and track," which is a deliberate alternative to "command and control." Essentially, he has a culture and process which trains his employees, trusts them to perform well, and then tracks their progress to the company's goals. He considers it the heart of his business success.

I got the chance to meet Nick last fall, and at first he strikes you as just a regular guy running a fun business. But when he gets going, his passion for his employees becomes clear. As he says in the article, "People really do want to have a meaningful place to work," and as he's clearly proven, the path to achieving that vision can even be by making pizza!

Jennifer

Yikes!

A recent survey done by Manpower, Inc. indicates that about 60% of people are actively looking for a new job and that another 21% are now actively networking for better opportunities.  Unfortunately, this confirms a number of other recent surveys on the subject.  Anyone who has been through this knows that once people start looking, the opportunities will come and people will leave, even after the business starts to rebound.

Wow!   That should give any executive cause for concern.  Even if you think everything at your company is hunky-dory, these numbers say you’re wrong.  81% of your people are looking!

Granted, much of this sentiment may be just “recession burn-out.”  Everyone – the restructured, the down-sized, and the survivors alike – are tired.  This has been a grind.  The turmoil, stress, and anxiety have been intense.  No wonder a significant majority want to move to some place that is better, more fun, less stressful.

That said, it still says that the time to act is now.  The good news is we are fickle creatures – as happy as our current assignment, our current boss, our last positive experience.   It doesn’t take much to get people re-engaged.  What people want is to know that they are making a difference, that their contribution matters, and that they bring something special and unique to the business.

These are easy issues to address.  They don’t require massive investment!  They just require that we stop thinking about the next fifteen minutes and really start thinking about the future. 

As Red, the Morgan Freeman character in Shawshank Redemption, so aptly said, “Get busy livin’ or get busy dying!”   Time to get busy livin’.   The time to hang on to your best people is now – before their phones start ringing.  No time like the New Year to focus on your top priorities, right?

Scott

A Network or a Pyramid?

Although many organizations still have some form of pyramid structure to organize and connect their employees, it is rapidly fading into the background as more businesses recognize that the real work happens in a "network" fashion. Like bees in a hive, the work of employees' cuts across organizational boundaries as teams are formed from members around the world, and then quickly disbanded as activities are completed and other projects call.

Perhaps one of the biggest enablers for this new way of working has been the advent of communications technology. Starting with e-mail and then escalating to our current world of texting, tweets, blogs, chat rooms and more, we have new and effective ways to reach out and connect to our collaborators.

What's interesting is that it's taken the youngest generations—those in their teens on through their twenties—to show us the real potential for these capabilities. When e-mail first came out, business embraced it as a tool to become more efficient…you no longer needed a stamp to send your message, and it could now get there faster, thus yielding quick and tangible benefits. What's not to like?

Gen Y, though, sees today's form of communications as much more than a handy resource. Instead, it's a vivid demonstration of how connected the planet is, and how information and relationships are simply a few keystrokes away, making communications technology a great equalizer. From a business perspective, this tears down more of the rules and boundaries that pyramids represent. As stated by an HR Manager in a recent Wall Street Journal interview:

"Young people today want accessibility. If they have a problem or suggestion, they'll e-mail or text senior managers, or even the CEO. They don't have the old-school notion that there are appropriate communication models. They've grown up in a freedom-of-information era."

So the next generation doesn't just see networks as a means to organize themselves and their work…they think like a network. And a workplace that thinks similarly will be creating a great place to work that attracts the best of today's talent, regardless of their age.

Jennifer

Complexity as “The Candle Problem”

As an observer and analyst of change in the world, Daniel Pink is among the best. He coined the phrase "Free Agent Nation" long before it became the new attitude for employees in the marketplace, and he's an advocate for embracing the "right brain" in business and breaking our dependence on pure logic and order as the keys to success. Now in his latest TED.com video, he tackles the idea that the workplace consistently demands that employees apply complex, sophisticated thinking in order to perform their jobs, and that as a consequence, organizations need to take an entirely new view on how to motivate performance. What he describes is an enlightened organization.

First, Pink makes his case for complexity by introducing what he calls "the candle problem." I won't give away the details as it makes for a fascinating presentation, but bottom line, what he describes is a workplace that's less about performing predictable tasks, and more about empowered individuals working to solve difficult problems on a routine basis.

He then goes on to argue that the typical carrot-and-stick approach to motivating performance is ineffective in such an environment. Instead, he suggests that three elements need to be in place to engage employees: Autonomy, Mastery and Purpose.

In our view of an "enlightened organization," we make the same argument but simply phrase it in terms of outcomes. Enlightened employees are continually responding to two critical questions:

What is my unique value?

Am I making a difference?

When employees are continually challenged to bring their "A game" to work, have the freedom to demonstrate this value, and then can vividly see that they're personally contributing to a higher goal, you've created a healthy, dynamic workplace full of growth and opportunity.

Check out Daniel Pink's video below.
Jennifer