I have recently spoken with Tamra Chandler, the founder of People Firm who is also the author of “How Performance Management Is Killing Performance And What To Do About It.” Tamra was also delivered an outstanding speech at The HR Congress in 2016,
Listen to the Podcast:
Mihaly: Every organization has a performance management system in place and the purpose of a performance management system is – goes without saying – improve performance, yet often we find that it’s not really delivered. So what are the most important problems with today’s widely used performance management systems in your view?
Tamra: Well, I think you called it right there the most important, most significant problem is that it’s having almost exactly the opposite impact of what we’re intending. We’ve invested you know years and time and effort on the process and more often than not we find that maybe actually a decreasing performance rather than increasing performance. Because what we know is engaged employees deliver higher performance, that’s proven, that’s causal, it’s been well researched. But when we look at performance management at the process, at the mechanisms, at the way we are doing it, largely across the world today, unfortunately, we’re often leaving employees disengaged, disenchanted and even frankly angry. And this is an outcome of really the best intentions gone awry. We wanted performance management to be fair, we wanted it to be unbiased, we wanted it to be encouraging. But sadly we’ve kind of mechanized the process and we’ve moved the human from the center and we’ve really developed a lot of bad habits things like you know focusing too much on the negative, trying to bindle the whole thing into one annual review discussion, trying to solve too many objectives with one solution. And these are all really different factors that contribute to we’re not getting the outcome we’re looking for.
Mihaly: You mentioned annual performance review – Interestingly organizations like Adobe, GE, Deloitte among other leading companies are getting rid of this sort of the traditional annual performance reviews and getting rid of rankings , instead they have started implementing more of a frequent feedback loop. In your view what are the advantages and if there are any, what are the disadvantages of a continuous feedback process?
Tamra: Well, I really encourage as we’re seeing more and more organizations move away from ratings and what I think of as even the more evil cousin, rankings. Because the truth is, is eventually we really can’t as humans, rate or rank others without bias especially when we try to compare people doing different jobs so there’re huge advantages, I really don’t see a downside in moving away from the ratings and not going through that process of putting a label on a human and replacing that with more conversation and better insights that really can help our employees grow and thrive. Now I will say though I don’t think every organization is ready to go to a true culture of continuous feedback. I think what needs to happen is ever organization needs to sit back and understand their own culture, you know, where they’re starting, the nature of the roles they’re addressing, sort of the rhythm of their business and come up with a way that they can really provide that insight to people on an ongoing basis but not in a way that feels overwhelming or that doesn’t feel authentic to the organization. So I think we really need to think about what is the cadence of that conversation and what’s the mature of that conversation? Because we’re finding with a lot of organizations, if you start to pull it apart there maybe points where you’re having a feedback conversation if you will where you’re really helping someone understand what went well and how they can build on that, maybe areas for improvement and that may have a cadence related to a project schedule or certain events that are occurring where you might have a different conversation that’s around development and career growth and that may have its own cadence. And sometimes that conversation is best if you let the employee drive what is the timing for that because some employees will want a lot more information, they’re going to want to talk a lot more and others maybe not. So I think the more that we put that in their hands and let them figure out the right amount of conversation and dialog they want to have the better it will be.
Mihaly: How does it work in practice, when in order to deliver result companies must work by processes, management needs to see what’s happening, HR leaders need to report back to senior management what’s going on in regards to people in the organization. Now we are moving away from ranking and rating and certainly we wouldn’t want sort of management or reviewers bias to get in the way, yet we need to get some sort of a compass or a picture about what’s happening about our people and about their performance. Can you give us a couple of ideas in terms of what can help HR and business leaders to reboot performance management using your words and also in the meantime maintain the visibility and the transparency in terms of what’s happening in the company?
Tamra: One of the things that happening in a lot of organizations is putting a lot more of the control if you will, I don’t like that word very much but putting a lot more of the emphasis on the relationship between the manager and the employee because that’s where a lot of this happens. So if you’re going to trust that manager to make decisions then lets trust the manager to make good decisions and let’s not necessarily box them into Bell curves and certain requirements that they have. What I find is, what we’ve done with performance management is we’ve tried to mechanize and try to put it into certain boxes and structures but interestingly if you go out and talk to most managers who are leading a team of people, they’ll tell you who their top performers are, they’ll tell you if there’s anyone on their team that they really wouldn’t shed a tear if they departed and then probably the rest of team is sold performers. And I found of you start to give managers the ability to just to call that out and to have the influence to be able to really recognize those people who are really going above and beyond, pretty soon you’re able to surface out who those high performers are and have really a healthier and more relaxed approach between managers and employees. Other things that we like to do is really think about you know this idea of how do we use crowdsourcing and social input to help us? Particularly when you think about the millennial generation, they’re used to this idea of constant feedback from peers and others. So are there ways that we can start to gain insights by those who are working side by side with people? And not in a 360, you know and anonymous kind of way but really much more of an open hey here’s what I see you doing great I’d love to see more of that kind of concept, so we see more organizations going that way. The other thing I’d say is we’ve moved to more modern performance management practices, we get better insights no just on performance but really on what does our talent inventory look like? If we start to build more tools that help our employees understand how they build their careers, what great looks like, how to assess their performance, more tools for managers to help assess performance against you know measurable competencies and skills and knowledge areas we can really gain a lot more insight into our talent while at the same time we’re giving our employees a lot more ability to manage their careers and their growth.
Mihaly: Here is an interesting thought: how do you make people accountable for their own performance? At the end of the day they should be just as much or even more interested and more responsible to improve on performance otherwise at the end of the day it’s their career and their future us at stake. So how do you make people more involved and accountable for their own performance?
Tamra: Absolutely, you’ve nailed it. I mean I think that is a huge piece is actually helping people take that ownership of their own career. And what’s difficult about this and it depends on where we’ve been in our own organizations is frankly we’ve trained people to do just the opposite. We’ve trained them to try to improve until I tell you if you’re good, tell them you’re only as good as the rating I give you. So I’ll tell you it takes a while to get there, it takes a while to help people understand what that means to own their career an what it means to take more accountability for where they want to go and the type of insight that they want, if they want feedback they have to ask for it. You know so I think you really have to make a concentrated effort to get there and that takes the change management around your leaders, you know are your leaders driving that right behavior, are they encouraging that type of ownership, are they giving adequate feedback? You know so I think it’s a lot around the leaders but it’s also helping your teams through that change. And that is giving them more information, helping them understand how they can take more ownership for that, where the information is to make better choices, those types of things. So I really see that as a cultural shift and one that’s taking organizations a little time to get there.
Mihaly: And do you see it’s also a generational thing in terms of millennials, Gen Y’s, Gen X sort of taking more ownership of their career, they’re more loyal to the profession than to the organization, do you feel they’re more open to taking ownership of their performance management in that sense?
Tamra: You know I don’t know I’m still a little bit skeptical about how much variation there is across the generations. I think we are all very human to human and I think you’ve got individuals in different categories that take a lot of ownership and others that don’t some of that s more personality based. Now I do think as I was saying earlier, I think the millennials are more comfortable with certain things around performance management, I think they are more comfortable with sort of transparency and a lot of this and they’re things that … and frequency, they are looking for more frequent feedback. But what I’m always wondering myself is that generational or is that simply age? We’re looking for more feedback when we’re younger than when we’re older? But I think the key thing is really like creating a menu, how do you create a menu of options that employees can use and then you know people can kind of customize their own journey and I think that’s where you really start to give them the power.
Mihaly: Many of our listeners are senior HR leaders and they’re wondering in this case I fully trust my managers to judge the performance of the team. So in this case what is the role of HR and what is the role of business leaders in terms of making performance management to really work and at the end of the day deliver what matters which is results?
Tamra: Right. Well, I think we have to start with the idea that performance management is a fundamental management process. While it’s historically been owned by HR I think we need to recognize it really is a business management process and so to me that means that HR you need to be the facilitators of building a great solution and help you know bring kind of these modern ideas in, help business leaders underhand what human motivation looks like and how that works and how we’re great leaders. I think they can help design the new process but it really needs to have that strong business involvement and ownership to be meaningful. And it’s interesting because I’d say the design teams that I’ve worked with that have the strongest business engagement tend to be the most courageous and are willing to take the most risk when they really start to walk away from what we’ve seen as traditional performance management.
Mihaly: So HR really has to be a kind of architect in the process. Sort of designing it, helping and coaching but Performance Management must be fully owned by a business. Now if somebody listens to this podcast and says, okay that makes a lot of sense and it’s based on scienceall backed by research so I wish to rethink and reboot our own company performance management system. Where would you suggest to start? What is the first step? What is the first few weeks look like of redesigning the entire process?
Tamra: I think there’re two things in that. I think going back to just talking about that partnership between HR and business, we really have to take the time to educate our leaders and our business partners in this process. Often what can put us in trouble is f we try to leap to something new and people really don’t have the insights to understand well what wasn’t working with the old system and why are we trying these new things? And what are the fundamental principles that are underlying where we’re going? So you really have to take the time to educate leaders and I find sometimes we are a little hesitant to kind of pull our executive team aside and say no, what you’ve been doing really isn’t working and we need to try something else and here’s why and we need to invest that time. So that’s one place to start. The second really is then once you’ve got your leaders going and they’re bodied and they’re ready to move, is start with strategy because as I said performance management is a management process and I think it’s one of the most powerful processes we have to change our culture, to drive our strategic objectives, to influence the nature of the work in the organization we have. And so if we step back and we really start with strategy and say what are we trying to accomplish and then we think about how performance management will really support us in that mission and in those goals, it’s things like these. So if we are trying to build a culture of collaboration and innovation then ho is performance management going to show up in that. If we’ve got certain fill gaps, maybe we need to put a lot more focus on developing people so it can be addressing those fill gaps correctly. So I think we need to connect performance management and strategy tightly and maybe start there.
Mihaly: It’s very interesting because I believe most organizational performance management very often is driven and owned by the CFO’s office, the finance department while people performance management sits under HR. And of course finance is driven by numbers, driven by boxes, driven by ratings, how would you suggest to resolve this issue and get the HR to talk to Finance an actually involve them, because it’s all about strategy numbers, it’s all about people, how do you make the two parts work together?
Tamra: Well you know I think that’s one of the core essence of the book and the design methodology I put forward because when I really started looking at this topic it was so interesting to me, no one had really clearly articulated what are we trying to accomplish here? And the interesting thing is, I believe every performance management solution, every company I have talked to has tried to solve three things.
One, They’re trying to drive the organizational performance right, are we all rowing the boat in the same direction and going the right way. Two, they’re trying to develop people, how do we make a growth path so we can get the most out of them, that their careers are aspirational and are exciting, you get to do great work. And three, trying to reward equitably and not equally but equitably in the sense that your contributions are rewarded for the nature of those contributions.
Well when you start to think about the finance side of it and the HR side or the people side of it, they really are sitting within those three goals. So the finance, the business side is really that hard connection between what are we trying to achieve as an organization and how are we going to reward put people for that? And that’s where you get into the bonus programs and the metrics and the numbers. On the other side, we’re really trying to develop our people and connect that to the organization performance. So of we’re growing strongly in a particular region we need to build talent in that region and the needs to be tied t that. Or we need to build certain skills like I mentioned earlier. So I think the power is when these ideas come together and understanding how each of them connect or don’t connect within our performance solution but then also addressing in a way that’s holistic that doesn’t necessarily bundle it all in one solution like we’ve done today in this sort of annual review cycle process most of us are caught on. So that’s why on the front of the book there’s this big naught because I say we really need to abandon the naught, we need to start to pull that apart and think about how we solve for each of those in a way that is connected, that no necessarily are using the same methods and tools and process.
Mihaly: Last but not least you spoke at The HR Congress in Amsterdam last year. The main theme of our congress was Designing and building people-centric organizations. What does people centric or been more human mean to you in terms of work place?
Tamra: That’s a great question for me and as my company is called People Firm. The first thought that comes to me, really to my mind really is authentic. I think of we’re going to have a more human, a more people-centric workplace, it really needs to be authentic, it needs to allow people to show up as who they are and frankly it means it’s a little bit messy because each of us are unique, we all have strengths, we all have weaknesses, we need to be okay sort of managing that and being true to it. I also think it means we have to step away from these ideas that came out of the industrial era which you know we really have been starting to pull away from and I think that’s so great because it creates much more human, much less formal and structured processes or methods or thinking. It’s funny because when people come into our office and see our Seattle, Washington and the locker on the office and they’re often saying wow, it look like a living room in here, this doesn’t look like a work office. And it always makes me laugh a little bit because I think you know why shouldn’t it be comfortable, why can’t it look a little bit more like a living room? And to me, that’s like one little tiny way at people Firm that we’re trying to make it a more human workplace and I think that the more that we can do that around the world the happier we’ll all be