Reinvent Performance Management into a Leadership Process

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Dr. Jim Kauffman Consultant and Product Manager DDI

Reinvent Performance Management into a Leadership Process

Diane Bock Senior Consultant DDI

Reinvent Performance Management into a Leadership Process

Who We Are

Global execution excellence across 91 countries

59% of revenue from repeat customers

Industry’s top instructional designers, technologists & consultants

Talent management consultants + Talent Acquisition, + Leadership Development, + Succession Management

45 years of research and innovation in assessment & learning

Principles behind our services transform lives in and out of the workplace

Talking about Performance Management

Poll—Rationale for changing performance management—Choose all that apply q  People hate performance management.

q  Executive leadership has mandated a change in Performance Management.

q  PM has been damaging to employee engagement, collaboration, or performance.

q  Backward-looking evaluation is no longer as important to company success as forward-looking growth, learning, and development.

q  Feedback and coaching needs to occur more frequently.

q  The current annual system is too static for our environment of changing priorities.

Change to:

•  Simpler •  Consider science of human motivation•  Less evaluation •  More emphasis on development and growth•  More focus on fewer objectives & behaviors•  Separate from compensation decision•  Focus on the future not the past•  MORE CONVERSATION

Five Performance Management Pitfalls

Pitfall 1: No Clear Purpose for Performance Management

Purposes of Performance Management for Organizations that have Changed PM

•  To inspire people to do their best work.•  To inspire and retain 100% of solid performers.•  To drive execution through ongoing feedback that aligns

to agile and innovative business.•  To empower and engage employees through more

meaningful discussions between managers and their reports.

•  To reinforce our organizational values and support our mission to maximize the customer experience.

Pitfall 2: Stretching Performance Management in Too Many Directions

Discussing Pay Raises Separately

•  HR may still have guidelines on percentages allowed for meets, exceeds, does not meet.

•  Manager considers performance, where the person is in their pay range, the HR guidelines.

•  Have the pay discussion at a separate time…for example on employee anniversary.

Pitfall 3: Over-focus on Complicated Process

“Simple clear purpose and principles give rise to complex intelligent behavior.

Complex rules and regulations give rise to simple stupid behavior.”

- Dee Hock, founder of Visa

Example: Complicated process— proficiency levels

•  What’s the difference between “awareness” and familiarity?”

•  What’s the difference between “difficult” “considerably difficult” and “exceptionally difficult?”

•  What if 50% of situations encountered were “difficult,” and 50% were “considerably difficult,” what rating do I get?

RATING SCALE STRUCTURE Proficiency level Behavioral competencies Func6onal competencies

Expert (level-‐5) Excep6onally difficult situa6on Key resources Advises other

Demonstrates Comprehensive Expert understanding of concept and process

Advance (level-‐4) Considerably difficult situa6on Broad understanding of concept and process

Immediate (level-‐3) Difficult situa6on Require occasional guidance

Understanding of concept and process

Basic (level-‐2) Somewhat difficult situa6on Familiarity with concept and process

Awareness (level-‐1) Simplest situa6on Require regular guidance

Awareness of concept and process

Simple Templates to Enable Performance Conversations

Pitfall 4: Under-focus on Leadership Skills

Skills by Years Needed to Become an Expert

Coaching skills don’t blossom on their own, interven7on is needed.

“High Resolu.on Leadership: A Synthesis of 15,000 Assessments into How Leaders Shape the Business Landscape” DDI 2016

Mastery Never Occurs for Coaching and Development

Percent Rating the Same Performance Management System as “VERY GOOD”

Gallup April 4, 2013

My Manager is THE BEST!

70% My

Manager is Below Average.

Coaching Problems

•  Happens too rarely•  Poor skill •  Lack of clear expectations/

agreements for performance

•  Waiting until the performance shortfall is chronic or critical

People who receive assessments in the bottom 10% have a 36% chance of making it into the top half

within a year.

‘‘ ‘‘

Coaching Problems

•  Happens too rarely•  Poor skill •  Lack of clear expectations/

agreements for performance •  Waiting until the

performance shortfall is chronic or critical

•  A fundamental misunderstanding of coaching

The Misunderstanding: A Focus on Reactive Coaching

Proactive Coaching is the Missing Piece

Assessment Data

10,000+ Assessment Center Par.cipants, DDI

COACHING AND DEVELOPING OTHERS Clarify the Situa?on

Provide Feedback

Convey Expecta?ons

Assess Gaps / Opportuni?es

Guide Collabora?ve Development

Foster Confidence

1.  You are an expert. 2.  You remember

what it was like to learn to ride a bike.

3.  You know very well what can go wrong.

4.  You can go online and find good advice.

Common Barriers to Proactive Coaching

•  Manager not familiar with employee work, tasks, work partners, or pending challenges.

•  Employees need coaching in areas where his/her direct manager lacks experience or expertise.

•  Manager can’t imagine what could go wrong or be challenging.

Telling Wow, that’s his good advice? Make sure you are

well prepared.

Seeking is the Key to Proactive Coaching

Let’s touch base on your new assignment. What’s

your biggest challenge right

I’ve just been working on

that… I have a customer with an unusual request.

Pitfall 5: Disconnected from the Science of Human Motivation

•  Stacked or forced ranking on a bell curve

•  Single overall ratings•  Brain-wired with bias for

negative

Our brain’s response to lack of acceptance, uncertainty, or loss of

control

•  Stressed •  Social pain •  Fight or Flight •  Diminished cogni?ve ability

Leader Skills that Consider Science of Human Motivation

Brain-‐Friendly (trust-‐building) Leadership Techniques

Praise Delega6on

Transparency Empathy Autonomy Authen6city

“Neuroeconomics and the Firm”*

*by Paul J. Zak, American neuroeconomist

Five Pitfalls

1.  No clear purpose declared for Performance Management

2.  Stretching Performance Management in too many directions

3.  Over-focus on complicated process4.  Under-focus on leadership skills5.  Disconnected from the science of

motivation

Advice •  Clear/specific goals alone can increase performance 36% (CEB).

•  Coach on operational targets (i.e. SMART objectives), behavioral expectations also called “competencies,” and people relationships.

•  Decrease time spent looking backward and creating documentation.

•  Increase percentage of time spent in PROACTIVE coaching.

•  Discontinue a single overall rating, do not use forced ranking or a bell curve.

•  Separate compensation discussion.

•  Simplify—and define a clear purpose for performance management.

•  Meet personal needs for esteem, empathy, involvement, trust, and support.��(i.e. align with science of motivation)

Questions?

Contact us…

Diane Bock diane.bock@ddiworld.com

Jim Kauffman jim.kauffman@ddiworld.com

Additional Slides

Does human performance follow the bell curve? Research says NO.

In over 93% of cases, a Paretian distribution

more closely represented the distribution of

performance than a bell curve (Gaussian

distribution).

THE BEST AND THE REST: REVISITING THE NORM OF NORMALITY OF INDIVIDUAL PERFORMANCE

ERNEST O’BOYLE JR. and HERMAN AGUINIS

A Normal Distribu6on (black) Overlaying a Pare6an Distribu6on (grey)

“Let us make a special effort to stop communicating with each other, so we can have some conversation.”

- Mark Twain

Conversations Matter

So Many Connections, So Many Questions

•  Should we drop Performance Management?

•  Should we drop performance ratings and/or rankings?

•  How can we set pay raises without performance ratings?

•  Do we need documentation? Document what?

•  What are the legal ramifications of changing?

•  How can we ensure managers will be good coaches? About what should��they be having regular conversations?

•  What software/technology do we need to support the process?

•  How do we get management support for changing?

•  What kind of change management effort is needed?

•  How will we make sure star performers continue to get visibility?

Simpler Competency Rating Approach

COLLABORATING

Working coopera.vely with others to help a team or work group achieve its goals.

•  Contributes to goal accomplishment—Makes sugges?ons, volunteers assistance, offers resources, or removes obstacles to help the group achieve its goals.

•  Asks for help and encourages involvement—Leverages others’ skills and gains their support by asking for their ideas, opinions, and par?cipa?on when solving problems, making decisions, and carrying out plans.

•  Informs others on team—Shares important or relevant informa?on and ra?onale with others; summarizes to check understanding.

•  Models commitment—Adheres to the work group’s expecta?ons and guidelines; fulfills team or work group responsibili?es; demonstrates personal commitment to group goals.

- Met expectations - Performed above expectations - Did not meet expectations

Focus on the CONVERSATION

2015 Research on “Performance Management” by Nick Holley, The Henley Centre for HR Excellence, and Aksshay Malaviya

2015 Research on “Performance Management” The Henley Centre for HR Excellence

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