Does Performance Management System Really Improve Performance?

Most Performance Management practices turn out to damage the performance they are intended to improve. In the context of neuroscience research this is based on fundamentally flawed understanding of human responses, as revealed in recurring patterns of mental activity.

Failings of Traditional Performance Management system

Labelling people with any form of numerical rating automatically generates an overwhelming “fight or flight” response that impairs good judgment, and leads to disengagement. The employee then ignores the feedback, the push back against stretch goals and rejects the example of positive role models. In contrast to ‘the growth mind-set’ model which holds that people learn, grow, and improve all their lives most organizations promote the fixed mind-set of human growth and learning which is reinforced by Performance Management systems.

Performance Management in the Dynamic Environment

In the context of rapid change; where organizations become obsolete in no time; the pressure on the organizations is to re-innovate and re-invent to survive.  To cope with the external demand, organizations are focusing on creating internal flexibility; and strengthening agility of its internal processes.

To breed innovation, organizations are shifting from hierarchical to more networked cross functional work groups; where the individual is working on multiple projects within different teams. Millennials entering the workforce has further created complexed structures with multi-generational workforce. More than ever before, the organizations are facing a greater need to align individual goals with organization goals. With periodical goal and role changes, insufficient performance data availability to allow managers to compare them with each other and most importantly difficulty in identifying employee’s career development plans are few major challenges that arise within organizations.

Organizations have felt challenged with the inability of current performance management process to support the business objective. The Performance Management System has repeatedly failed to inspire performance with multiple causes like single year- end performance review, end of year rating, one time performance conversation and being goal centric versus development focused. All this has been evident through low engagement scores which has pushed the HR strategist to re-design the Performance Management System based upon the need of the customer (employees).

Dynamic Performance Management System for Dynamic Environment

What is the new and dynamic performance management system? Compared tothe traditional evaluation in which employees usually receive performance feedback about how well they did against their goals and peers, employees in the new system receive feedback beyond work performance. They also receive feedback about their expertise levels and potential for growth. That is, the feedback employees receive in the new system provides more insight into their strengths and opportunities for advancement.

Employees are assessed on both work performance and new dimensions of expertise and potential and are rated individually without comparison to other following an ‘absolute’ approach vs. ‘relative’ approach. In traditional relative rating, managers usually compared employee performance against others and sort all employees into pre-determined performance categories. In contrast, the new evaluation is based on an independent assessment of each employee’s performance.

In the new performance management system, there are frequent conversations with the line manager where 360 review feedback from multiple stakeholders including peer, team leaders, juniors is taken. The new performance management system complements the new dynamic and innovation cultures within the organisation which inspires performance to achieve business results.

Improving Performance through New Performance Management System

The success of the new Performance Management system depends upon its successful execution. The inability of line managers to hold great performance conversations coupled with lack of feedback, coaching behaviours and continuous communication in real time will need to be addressed for a seamless execution of the new performance management systems.A 2013 survey by the Society for Human Resource Management asked HR professionals about the quality of their own Performance Management systems; and only 23 percent said their company was above average in the way it conducted them.

Currently the owner of Performance Management within the organization is Human Resource. However, the new process needs to be led and owned by business to drive performance while Human Resource acting as a support instead of the owner. The success of the new Performance Management System lies in the ownership along with skills of the line managers to drive quality performance conversation. In the new system, managers are urged to use their judgment about a conversation frequency that best supports employee performance. Managers are required to display everyday leadership; ongoing conversations around goals to be achieved, review of past, feedback and coaching centered on development.

The conversations should allow employees to feel autonomy, mastery, and purpose. Due recognition of the work and alignment with employee career aspiration are other important element that conversations need to address. To build structure and objectivity in the performance conversations; many organizations are collecting real time data, making the check-in conversations more accurate than annual reviews.

To drive the new Performance Management System with success; organizations need to prepare their line managers with essential skills of conversations, feedback, coaching and more. Here is where InspireOne through its solutions support the organizations in the entire change initiative through well-developed global processes. InspireOne supports organizations with different interventions at different stages which considers the support around change process, performance and development to successfully implement the new Performance Management System and inspire Business Performance. Know more about our Performance Management Solutions.

Employee engagement in a VUCA environment

The business world has always been a challenging place. This is especially true today, when we are operating in what is known as the VUCA environment- volatile, uncertain, complex & ambiguous.

In such an environment, an organization relies heavily on its workforce to stay engaged, and give in their best to ensure that the organization reaches its desired results. Accordingly, many organizations invest in periodic surveys to gage the engagement levels of their employees.

However, what happens when an organization is undergoing even more changes than normal, and is in turmoil? If the organization is struggling with these changes, so would be the employees as well. Hence, organizations would ideally be spending more of their energies in understanding the pulse of their workforce, right?

Wrong!

Unfortunately, it is a general perception that organizations should only check the pulse of their employees when business is doing well, and/or organization has some growth plan. Most organizations shy away from conducting employee surveys when the company is in a turmoil- say if there have been mergers, change in leadership, or business plans have not been met. In any of these aforementioned situations, and any other similar situation, the likely approach to employee surveys is to cancel them.

There are two primary reasons for this. Firstly, organizations want to focus the funds on ‘things that truly matter’. And secondly, organizations expect dismal results as employees are likely to voice their displeasure in such situations.

However, canceling engagement surveys for either of these reasons is not the approach that organizations ought to take. In times when the organizations are in a flux for various reasons, employees tend to be uncomfortable as well. In this situation, management approaching them for their feedback will be reassuring for them. The management can also understand the specifics of their employees’ discomfort, and accordingly take measures to ease it. Failing in doing so, would lead to high attrition, and low productivity, which would only further aggravate the organization’s already difficult condition. Hence, investing in understanding the pulse of employees becomes even more critical during difficult times.

The other important point to note is how the results of an employee survey is perceived by the management. Surveys are essentially diagnostics to understand the state of employees. In case, the results are negative, then that is actually a success for the management because they now have an opportunity to address the issues, before they catapult. This is a much better situation to be in, than if they remained unaware of their employees’ opinion while it continued to silently hurt the organization.

In a VUCA environment, it is an organization’s workforce that determines if it is going to sail through, or sink. In such a situation, it is prudent for any management to invest in understanding the sentiment of its employees, and take measures to engage them, as this is what would ‘truly matter’ in the organization’s journey to reach its goals.

Understanding Employee Engagement - Inspireone

Employee engagement has been the buzz word for some time now as is evident in its ranking as the top 2 focus areas in Deloitte’s HCM Study in 2015 and 2016. Organizations are increasingly understanding its importance in driving business performance and continuously look at ways to boost the engagement levels in their organization. While the connection between employee engagement and business performance is getting highlighted, it’s important to first fully comprehend what employee engagement means. For instance, a common misconception is to view employee engagement as another word for employee satisfaction.

That, of course, is not completely true. While yes, employee satisfaction is crucial to drive employee engagement, the latter is more holistic, encompassing a few other factors. According to the IBM Kenexa High Performance Engagement model, employee engagement includes four components, namely, Satisfaction, Advocacy, Commitment, & Pride.

Let’s deep dive into each of these 4 elements to understand employee engagement understanding-employee-engagement better.

Satisfaction: In order to be engaged, an employee must be satisfied with the job they do, and the company that they work for. This often happens when the job that an employee is doing is aligned to his/her both interest & aptitude. Moreover, employee satisfaction is also determined by an organization’s efforts to make its employees happy. This is a critical component for employee engagement because unless the employees are satisfied and content with their professional life, it is unlikely for them to put in any discretionary efforts.

Advocacy: The employees of an organization are the greatest & most effective brand ambassadors of that organization.  It is important that employees like to advocate the organization they work for. If this is an aspect which is well taken care of, then all employees, and not just those in sales & recruitment, could be the champions to build confidence in both potential clients & talent for the organization. Employee advocacy is instrumental for the organization to develop its brand. Also, it is quite distinct from employee satisfaction. For example, an employee working with an internet service provider might be very content with his/her job because they can come in late and leave early and that nobody critics his/her output. However, if the same individual were asked to suggest an internet provider for his/her friend, it is unlikely that he/she will recommend his/her own company. This would be because he/she doesn’t have faith in the company’s focus on quality. Hence, it is crucial that employees are not just satisfied, but also are advocates of their company.

Commitment: At times employees are happy in the job that they are in. However, they still look out for other options. This brings in an element of instability in the workforce because the organization can never be sure if one of their key resources will quit, say, in the middle of a project. This is likely to happen when there is no strong motivator holding the employees back. For example, if pay is what is responsible for an employee’s satisfaction, another company can easily poach him/her by offering a higher salary. Hence, it is crucial to always be in sync with the commitment levels of your employees, and build your own employee value proposition for each employee.

Pride: It is important that employees take pride in working for the company that they do. This is critical because this links with & boosts all the other 3 aforementioned elements. When an employee feels proud to be associated with a company, they are likely to be satisfied, likely to advocate the same to others, and stick with the organization longer. Employee pride also leads the employees to be more driven towards achieving greater results for the organization. For example, suppose an organization is known for launching innovative solutions which are state of the art. Employees are likely to feel proud to be associated with such a brand. They are also likely to keep up the organization’s reputation of being innovative by directing their own efforts in that direction, thus, leading to discretionary efforts.

In conclusion, employee engagement is critical for performance. Numerous studies have listed down myriad ways in which employee engagement accelerates business results. However, whenever an organization is looking at improving their employee engagement level, it is important that they look at all these four components together. It is only then that organizations can translate employee engagement into business results.

5 Criteria to look for while choosing an Employee Engagement Survey provider

Conducting an employee engagement survey is like visiting a doctor in many ways. An individual consults a doctor when he/she wants to assess his/her health; it could be because they are currently experiencing some ailment, or because they wish to check their general health. Similarly, the leadership team of any organization would partner with employee engagement consultants to conduct an employee engagement survey when they want to understand the issues in their organization.

Given the criticality of such a survey initiative, it is imperative that your organization keeps certain points in mind while choosing their survey provider. We have listed 5 such key criteria to look out for while selecting an employee engagement partner.

1.       The science behind the survey

When visiting a doctor, an individual always checks if the practitioner is well qualified for the job. Similarly, it is critical for organizations to assess if the survey partner is qualified for the job of running their survey. One important parameter gauge this is to understand the framework or the science behind the partner’s survey solution. The framework usually forms the backbone of the survey, as both the design and the results will be based on the framework. Hence, while shortlisting your survey partner, look for someone who understands how to drive not just engagement, but even business performance.

2.        Credibility

An employee engagement survey requires employees to share their honest opinion on myriad facets about the organization. Some of these opinions might not be seen as ‘favourable’ to the senior leadership team. Consequently, employees would only be comfortable in sharing their honest opinion when they are confident that it would be completely anonymous and would have no repercussions on them. Hence, it is important that organizations partner with service providers who are established for their credibility, thus eliciting honest employee feedback. An important data point to ask the partner is the number of engagement projects they do annually and the data points / available benchmarks in your industry. 

Emplouee Engagement Survey

3.       Lead time to launch the survey

Let’s draw a parallel here with the time when an individual has a medical emergency. The said individual would like the doctor to diagnose the ailment at the earliest. Having to wait in a long queue might aggravate the condition, while almost certainly affecting the individual. Similarly, when an organization is looking to run an engagement survey, they want to get started as soon as possible. Having to wait for the survey provider to get all the requirements in place to launch the survey is not ideal. Hence, while looking for an employee engagement survey partner, check on their lead time to survey launch. Anytime up to 3 weeks is your benchmark.     

4.       Quick access & dynamic reports

Suppose the individual got all the tests done. How long would he/she be comfortable waiting before receiving the results? Not very long, clearly. Waiting for the survey results is equally uncomforable for organizations. With the best technology in place, partners should provide results the minute the survey concludes.  This immediate reporting helps the organization to study, understand and action on the survey results at the earliest, while the survey results are still relevant.

5.       Post survey consulting & support

Finally, the individual who had gone to the doctor and has received his/her report. Now what? The individual would obviously want the doctor to work with him to understand the reason behind the diagnosis, and what could be some of the medicines/therapy to get well. Similarly, the survey provider should also have the consulting capability to understand, interpret, and share the action plans for the survey. That would give the senior leadership team very specific issues to execute. Your organization may also want a longer term engagement with a survey provider who can not only conduct the survey and share the results, but also hand hold your organization to improve engagement in a sustainable manner and also impact business performance.

In summary, conducting an employee engagement survey should be considered as a strategic imperative which should highlight insights shared by your workforce that can help you leapfrog your business and retain your talent. It’s also a strong signal to your workforce on your commitment to their success in your organization. Hence, while selecting the best consulting firm with whom to partner, carefully weigh in the five parameters above and thereafter choose on the basis of the firm which provides you the best fitment – in terms of understanding your organization’s context.

How does communication impact employee engagement?

Just the other day, we presented the findings from the engagement survey for one of the world’s leading bathroom fittings company.

At first glance, their numbers and accompanying qualitative feedback on employee engagement were extremely positive. Particularly, a 100% response rate and over 3 comments per employee on average went to show just how important every employee believed the survey was and how much they expected would improve as a result of this survey.

The organization had also pegged itself against other high performing organizations in the same industry and comparable industries to benchmark its performance and engagement scores relative to others

While all the scores checked out per the CEO’s expectations, he began to realize a common trend across all areas of improvement:

• The company had not scored as favorably in it’s Performance Management process owing to low scores in HR and Managerial effectiveness
• Despite being a global leader with dominant market share in countries like India, employees did not give a thumbs up to how the company went about resolving customer related issues, especially after-sales queries from dealers and end customers
• Employees voted down the ability of their managers to engage in 1:1 conversations with them relating to their career goals, development and felt the overall ability to relate to and trust managers was inherently missing
• Even though the organization’s goals and long term vision was a source of pride for employees, they felt directionless on the progress they and their company were making towards these goals. Many employees cited that despite clear goals set at the start of the year, many changes were introduced without enough firsthand knowledge about why those changes to the organization’s goals were important.
• Lastly, despite several areas of improvement, there were genuine high performing areas that the organization excelled at such as safety, quality assurance and brand name in the market. However, employees believed that successes in these areas (and others) were not highlighted nor were they rewarded in the local markets where such milestones were being achieved. In the absence of such R&R, it became harder for best practices to be highlighted and shared across the organization.

As you might have guessed, ineffective communication or a lack of enough communication emerged as a stark gap across the organization, emanating perhaps from the senior leadership’s inability to constantly communicate the shifting priorities of the organization. This communication gap further trickled down to local managers not being able to have proper discussions with their team members.

Many other smaller but equally telling incidents were tabled by the CEO and his HR Director relating to how employees feared speaking out their minds and avoided confrontations that later would flare up to become much larger issues. For example, for a local manager at one of their largest plants, the idea of discussing HR policies seemed trivial enough to Whatsapp it to his team members. Little wonder then that members of his team either suffered from a misinterpretation of the policies or worse an equivalent way of responding to the manager on matters such as taking leaves, working from home, etc.

Quick to grasp on the seriousness of the matter, the CEO resolved to put together a quick action plan to arrest this communication issue within his immediate team and thereafter ensure it cascaded down all the way to the local managers at the plant and branch offices.

This incident might not be as isolated of a case as you may expect. In fact, 60% or more annual employee engagement survey results point to effective communication as a key lever to improve important business issues – from sales and customer service to manufacturing and managerial effectiveness.

By getting it right, organizations can create an internal momentum that catalyzes employees to provide discretionary efforts, which ultimately improves employee engagement results and in turn business performance.

Let the Project Management Begin!!

The account is closed and the monies start rolling in.  We’ve bagged the client and it’s a brand name that is worth bragging of for the years to come.  The account manager has earned his incentives for a job well done.

Then begins the interesting albeit overwhelming phase of project management.

The question that most project managers grapple with is this: Is Project Management the SCIENCE OF MANAGING THE PROJECT OR THE ART OF MANAGING THE CLIENT? There are some sticky situations that we, as project managers tend to get into. I’ve touched upon a few key ones below:

Sticky Situation 1: Creepy Crawlies

The client asks for additional deliverables that were not accounted for in the project scope. These requests creep in subtly but may soon snowball into a large-ish scope extension which impacts the project financially

What can we do? Ask the right questions initially which will define the scope of the project more tightly. Also evaluate the client request to see whether it can be accommodated with minimal cost and resource implication

Sticky Situation 2: Pass the Parcel

Your internal delivery team members are not on the same page as you when it comes to what needs to get delivered for the client. This is a sticky situation which presents itself more often when there are multiple delivery consultants working on the same project.

What can we do? Communication is the key! Always keeps the communication flowing between client and delivery consultants. You need to make sure that any recent information is passed on to the other party with the suitable context so that there is no room for misinterpretation

Sticky Situation 3: You just missed the bus

How often does it happen that you’ve communicated the deadline for a client delivery internally to the project team and delivery team right at the beginning of the project and they still miss the date?  You had prepared a detailed project plan and even marked a reminder on your calendar.  But you end up losing credibility with the client.

What can we do? It’s a good idea to have in-process steps within your project plan. For example, if a communication mail needs to be sent out on 15th September, it’s not merely enough to have the 15th September highlighted in your project plan. Plan for the interim steps and work backward so that you have a deadline of 10th September to create the draft invite, 12th September for internal approval, and so on. Also, have a reminder in your calendar to remind your project team of the approaching deadline!

Sticky Situation 4: Oh oh! Didn’t see this coming

The faster you learn that you are not God, the better! Not everything is in your hands and unexpected circumstances at the client end can change the scope in a project sometimes.  You haven’t accounted for this change and now your entire plan around costing and resourcing flies out the window

What can we do? Ever heard of a ‘Plan B’? At the inkling of an unexpected scenario, sit with the client and discuss the potential risks to the project. Then, do the same with your internal project and delivery team. Pick on each other’s brains to come up with contingency plans around the given cost and resources. You’d be surprised to find out that the dumb-looking guy on the project team is actually the brightest bulb!

Building Human Capital and Emotional Intelligence - By the Numbers

The valuation of companies is driven significantly by their intangible assets. In the last decade, competition has become so fierce that any edge gained by the introduction of new processes or technology is short- lived. Companies can no longer rely on investment in capital or physical assets to provide a competitive advantage. People have taken the centre stage in achieving sustainable economic growth. Given the significant financial impact of people in organizations we often refer to them as ‘human capital’.

A survey conducted by TMI across the world and organizations threw up alarming results pertaining to employee engagement at a given point in time in most organizations:

One out of 10 employees was on the lookout for a new job

4 out of 10 employees were not proud of their organization and spoke negatively about it

8 out of 10 were indifferent towards their organization – did not feel responsible for achieving its goals and were at best committed with their minds

Only 2 out of 10 employees were proud of their organization, they were committed both with their minds and their hearts.

80% of decisions are made emotionally. And today’s business winners will be those who best connect emotionally and empathetically. » K. Roberts, CEO, Saatchi & Saatchi

The Need to Develop Emotional Intelligence

At the heart of Building Human Capital, is the leadership of the organization. Research today is attributing almost 40 % of business results in organizations to its leadership.

70% of all change initiatives fail due to people issues – inability to lead, inability to deal with change.

A survey of US employers reveals that:

More than 50% of employees lack the motivation to keep learning and improving

4 in 10 people cannot work cooperatively

Only 19% of entry level applicants have adequate self-discipline for their jobs

Leadership development programs yield disappointing results, wasting billions of dollars

70% of all change initiatives fail due to people

issues—inability to lead, lack of teamwork, unwillingness to take initiative, inability to deal with change, etc.

Primary derailer of top executives: a lack of impulse control

Given below are a few examples of how Emotional Intelligence is a key success factor in organizations across industries:

US Air Force –

Used a EQ module to select recruiters for the Air Force’s front-line HR personnel

The Air Force found that by using emotional intelligence to select recruiters, they increased their ability to predict successful recruiters by nearly three-fold

Savings of $3 million annually

At Loreal –

Sales agents selected on the basis of certain emotional competencies significantly outsold salespeople selected using the company’s old selection procedure

On an annual basis, salespeople selected on the basis of emotional competence sold $91,370 more than other salespeople did, for a net revenue increase of $2,558,360

At Infosys –

Infosys's 2010 annual report also includes a "comprehensive intangible assets score sheet" that can be used as a decision-making tool to determine how successful the firm has been at investing in its people from year to year.

Research estimates that while companies could easily add 10-20% to their operating income by better utilizing human capital management, only a small number even reached the 0.5% mark. Suffice it to say, companies are leaving a wealth of value in their intellectual assets unrealized.