Show Me the Money! – Does Performance Management Actually Drive Performance? Webinar RecapFebruary 6, 2019 • Tal Valler
During our recent webinar session with Organizational Psychologist and Executive Coach Dr. Eyal Ronen, we focused on performance management, and showed how it actually drives measurable performance.
Here’s a summary of the webinar:
According to a 2015 Deloitte study, 82% of companies found performance evaluations to be a waste of time, with 41% stating they were marred by manager bias and 45% saying they were not motivating employees.
A more recent survey, conducted in 2017, reaffirms these findings; 79% of senior executives see revamping their company’s performance management practices as a top priority.
So, what we have is wide-spread recognition of the importance of improving performance management, and an equally prevalent acknowledgement that the processes we have now are simply not good enough.
To understand how companies can do better, it is crucial to gain a better understanding of performance and what drives it.
3 Perspectives on Performance
Performance within a company can be described through a three-layered scheme – Individual performance, the manager’s role in the individual employee’s performance, and the role of the organization in said employee’s performance.
1st Perspective: Individual Performance
Measuring and analyzing an individual employee’s performance can be tricky. Not every position has clearly defined goals and parameters by which a supervisor can gauge a certain employee’s productivity. Yes, you can pin-point a salesperson’s financial output down to dollars and cents, and you can see exactly how many clients a call-center employee successfully deals with on an hourly basis. But not all roles fit that bill.
Here’s an additional wrinkle when linking behavior and performance. At times, the exact same act, carried out by two individuals, executing tasks in two separate capacities, can be judged differently. One will be deemed as an integral part of an employee’s job performance, and the other, as a detracting element and one that indicates the employee is not exhibiting a required level of performance.
If a hotel clerk spends ten minutes going out of his or her way to help a guest, no one would argue that that behavior falls outside the category of performance. Creating a lasting good impression on guests will contribute considerably to retaining them as satisfied, raving and returning customers.
Now, what if instead of a hotel clerk, we were examining an assembly-line worker; what if a client walks in and an employee leaves his assembly-line post to offer the visiting client something to drink and a comfy seat? Would we view that chain of events as exemplary performance? Of course not, as the assembly line is now operating at sub-optimal levels.
It is clear then, that despite preconceived notions, defining the concept of performance is no trivial task.
Furthermore, managers need to be able to differentiate a performance-related issue from one that traces back to behavior and motivation, as these are often mistaken for one another.
The key distinguishing factors of these core employee-defining elements are:
- Behavior – an action taken by an employee (e.g. a hotel clerk chatting with a guest)
- Performance – assessment of that action (i.e. how did that act effect or impact the company and its goals?)
- Motivation – the “engine” driving the behavior
Motivation is not directly observable, and therefore very tricky to assess; managers tend to brand under-performing employees as unmotivated. That may be true on occasion; however, perhaps there are other reasons. What if a seemingly unmotivated worker is, in fact, willing to go the extra mile, but lacks crucial work-related knowledge? What if there is a mid-level manager to whom the employee directly reports, who stunts the employee’s development, not allowing him to show his true worth to higher-level supervisors?
Finally, when trying to impact performance, it is important to understand the individual elements that impact it. Performance can be summarized concisely in the following equation:
For an employee to be considered a good performer, he or she must be equipped with the proper knowledge, must be sufficiently engaged (i.e. motivated) and, lastly, focused and aligned with their company’s goals.
If the employee lacks one of these aspects, the entire equation falls apart. Empowering an individual employee toward achieving high-levels of performance suddenly becomes an unattainable goal.
2nd Perspective: the Manager’s Role
The overwhelming reason that good, productive employees leave their place of work is not to pursue higher wages or advance their career. Rather, they do so because they are dissatisfied with their direct supervisor.
Managers whom empower their team-members to self-manage, very often see a significant increase in performance. Whether enforced by managers or adopted by employees, a culture of accountability can transform an employee’s output and have a profound effect on his or her surroundings.
To create a culture of accountability, managers must truly understand their employees’ mindsets; what drives them? Why would they choose to go the extra mile? And, conversely, why would they exhibit behavior which isn’t conducive to high-levels of productivity?
Employees, will generally act according to the following set of principles:
- They will do what they know that you (i.e. the manager) care about
- They will do what they know has consequences
- They will do something that rewards them
- They will do something to prevent punishment
- They will do what they know will have follow-up
- They will do what they know has an impact on others
- They will do something they are excited about
- They will do something they know they can be successful at
- They will do something that has true meaning in the world
Increasing accountability requires addressing these motivations. Therefore, managers should:
- Start by creating clarity. An employee’s role needs to be clearly defined, any Organizational Citizenship Behaviors (i.e. expectations that go beyond clear-cut business goals) must be explicitly expressed and understood by all.
- Formulate a follow-up plan. This might entail weekly, monthly and annual meetings in which goals are discussed and reviewed.
- Actually follow up on these plans.
To understand what helps or prevents performance, you can ask yourself the following 2 questions: What are the 3 things that help me most when I’m performing well? Conversely, what are the 3 things that slow me down when I don’t?
Chances are, those same elements affect your employees. It is crucial that managers be aware of that; they should strive to facilitate a beneficial work atmosphere and to remove (or at least mitigate) any disruptive factors that allow for a non-productive environment.
3rd Perspective: the Organization’s Role
Culture eats strategy for lunch. If a strong, sound organizational culture is emphasized, performance will follow.
Unfortunately, much like motivation, company culture is not a tangible entity. It is impossible to precisely quantify and measure.
It can, however, be guided, directed, shaped and influenced; a company can be steered towards adopting a cultural identity that promotes growth/results. A company that sets a tone by prioritizing customer satisfaction above all else, will see a trickle-down effect felt throughout the organization.
Culture surveys can help us zero-in on core aspects that proponents of company culture need to be acutely aware of. These surveys help gauge how tuned-in employees are to their company’s culture and provide executives with a clear picture regarding the following questions:
- Do employees understand the company’s mission?
- How adaptable do employees believe the company is?
- How involved are employees in the company?
- How consistent is the company’s activity with its mission, and over time?
Whether or not your company chooses to send out these culture surveys – the information uncovered by conducting such a process is invaluable. Companies must be able to assess whether employees perceive the organizational culture the way they way decision-makers intend it to be.
So What Does it All Mean and Some Final Thoughts
As a summary, this is what we discussed in during the episode:
- The three perspectives of performance (individual, manager, organization)
- Culture trumps strategy
- Accountability is key
- Performance management is not an annual process, rather a continuous, year-round culture-fueled undertaking
This is the first episode of a 6-part webinar series where we investigate performance at large, and pinpoint tactics and focus-areas that can improve it.
The next episode focuses on new methodologies for feedback and how you can apply them to drive performance. To watch a recording of the webinar, click here.
Gameffective is an Employee-Centric Performance Management Platform – the “fitness tracker” for the Connected Workforce of the Future. Gameffective empowers employees to boost their work performance through hyper-personalised goals, real time tracking and data-driven feedback and coaching. Deployed with the world’s leading organizations Gameffective helps managers drive up employee value day by day. To find out how Gameffective can help transform your organization go to www.gameffective.com or book a live demo.