Improving the Performance of Performance Management – Why Changes Are Needed Terry L. Poling July 2016 Good afternoon. I think many of you know me, but for those of you who don’t, I’m Terry Poling, also a member of WNCHRA and Co-Chair for Programming for this year’s state conference here in Asheville. When I was first asked to facilitate a session on Performance Management, I was a bit reluctant to do so. After 30 years in organizational development, t’s not a topic that lights a lot of fires for me. Nor is it a practice that I’ve found to be very effective in most organizations. Let me conduct a quick survey here in the room. Based on your experience, how many of you would vote: 1) thumbs up, 2) thumbs neutral, or 3) thumbs down? Exactly, but the more I thought about it and studied current trends, the more inspired I became. It’s a topic that needs to be discussed. With current challenges to attract and retain quality talent, we need every tool available to manage talent appropriately.

Today’s Agenda What’s Changing: Latest Trends Our Assessment Experiences Common Assessment Errors What’s Needed: 3 Essential Elements Improving Engagement & Feedback Using the SARS Model By way of agenda, I want to cover at least six major topics over the next hour. Latest trends – why changes and improvements are necessary. Our own visceral experiences with being judged or evaluated. To show the reasons why our assessment of others is far more subjective than objective. Explain the 3 essential elements or components of an effective performance management process based on recent research. Ideas that you can use in strengthening the system within your own organization. I want to contrast the new rules of engagement and guidelines for feedback in today’s talent marketplace. Lastly, I’ll introduce you to tool you and your organization might use for performance planning, performance management and performance assessments. You’ll have an opportunity to use the tool in your own situation or scenario.

“Performance reviews are a curse on corporate America.” Samuel Culbert, UCLA Researcher While many of you may not be as harsh or critical as Samuel Culbert, the pace and volume of change has steadily increased over the past 3 – 5 years.

What’s Changing: Latest Trends Does anyone know what these corporations have in common, besides being well know? All of them have eliminated or are in the process of replacing their traditional performance review processes. I’ll show you how in a few minutes.

What’s Changing: Latest Trends 90% of companies surveyed by SHRM reported using annual reviews, but only 30% believed they did it well. (Fast Company, 2015). Only 46% of millennials believe their managers delivered on their expectations for feedback. (Workforce 2020 Research). According to 2015 Wakefield Research on 1,000 full-time millennial-age employees: 74% feel “in the dark” in terms of their performance. 62% report that they are frequently “blind-sided” by their managers. 59% believe their managers are unprepared to give feedback at the time of their reviews. 50% say annual reviews focus mostly on “gaps” and make them feel they can’t do anything right. Only 32% of review conversations encourage or allow employees to share their own thoughts on performance. 69% see their company’s performance appraisal system as flawed. 90% of companies surveyed by SHRM reported using annual reviews, but only 30% believed they did it well. (Fast Company, 2015). Only 46% of millennials believe their managers delivered on their expectations for feedback. (Workforce 2020 Research). According to 2015 Wakefield Research on 1,000 full-time millennial-age employees: 74% feel “in the dark” in terms of their performance. 62% report that they are frequently “blind-sided” by their managers. 59% believe their managers are unprepared to give feedback at the time of their reviews. 50% say annual reviews focus mostly on “gaps” and make them feel they can’t do anything right. Only 32% of review conversations encourage or allow employees to share their own thoughts on performance. 69% see their company’s performance appraisal system as flawed. What does this tell us? Current practices may be doing far more harm than good for all the participants: employees are disappointed/demoralized, managers are losing credibility and influence on the perceptions/performance of employees, organizations are experiencing challenges with attracting and keeping high-quality talent. Lynn Ryan wrote an article for Forbes Magazine (March 2015), titled, “Ten Unmistakable Signs of Bad Places to Work” Number #6 was the use of formal performance reviews.

Assessment Experience Recall a memorable time or situation in your life when you were assessed, judged, or evaluated. It could have occurred when you were in school, at home, at work, on stage, in the gym, or elsewhere. Identify the family member, teacher, coach, colleague, boss, or other person who was involved. What happened? What message did you receive? How did it effect or impact you?

Assessment Errors Common Biases “Halo” or “Horns” Effect “Same As Me” Syndrome Recency Effect “Super Human” Strictness Leniency “Middle-of-the-Road” Effect Third Party Influences Study published in Journal of Applied Pshychology a few years ago, including over 4,490 manages, that only 29% of the variance in ratings by multiple perormance raters was due to actual performance. 69% of the actual variiance in ratings was directly accounted for by the individual perceptions and biases of the raters. In other words, ratings often reveal more about the rater than the ratee. “Halo” or “Horns” Effect Effective Presenter Poor Penmanship “Same As Me” Syndrome We value in others what we value in ourselves DISC or MBTI Recency Effect Remember and impressed by the latest “What have you done for me lately?” Academy Awards “Super Human” Strictness Must leap buildings in a single bound “I don’t give 5’s!” Leniency Laise faire Don’t want to be bad-guy Path of least resistance “Middle-of-the-Road” Effect Safe Third Party Influences Exercise: Identify which of these or others you might be subject to Pair up. Share and identify ways to mitigate these biases. Conduct call out for each one. Summary: “I’ll believe it when I see it.” is really, “I’ll see iit when I believe it/”

What’s Needed: Three Most Critical Elements Active Two-Way Engagement Shared Expectations Frequent and Developmental Feedback

Frequent & Developmental Feedback Two primary functions of feedback To reinforce behaviors To correct behaviors Two ways to house-break a puppy Most powerful and least utilized management tool

Missed High-Leverage Opportunities Reinforcement Feedback Corrective Feedback Explain how people perform. Ask where folks normally receive feedback, crests or troughs? Adult ratio of positive to negative feedback. Most important, reinforement feedback effects behavior and sustains behavior far more than corrective feedback. Adolescents at home verses peers.

Engagement & Feedback Guidelines More Effective Specific Descriptive Behavioral Timely Usable Direct Supportive Future-Oriented Two Way Less Effective General Evaluative Personal Delayed Available Indirect Threatening Past-Oriented One-Way Review and explain the contrasts. GE’s new performance app: Near-term goals – called “Priorities” Frequent engagement – called “Touchpoints” Self-initiated giving/requesting feedback – Called “Insights” GAP has replaced annual performance reviews with monthly coaching sessions. Think about this: If research shows that many millennials leave after 2 years (“lack of loyalty”), why would you continue to use an antiquated performance system that encourages only two major touchpoints during the year: Front-end goal setting Tail-end reviews What if you had 8 performance cycles instead of two??

SARS Model Actions Situation Results

SARS Model As a Planning Tool: Co-Creating Shared Expectations Objectives/Outcomes Opportunity/Problem Projects/Communication/Tasks

Rationale/Motivation Behaviors/Decisions/Messages SARS Model As an Assessment Tool: Engaging for Frequent & Developmental Feedback Impact/Consequences Rationale/Motivation Behaviors/Decisions/Messages

SARS Model Actions Situation Results

Applying the SARS Model Use the cards provided on your table. Decide if you’ll use SARS to: 1) co-create shared expectations with someone, or 2) engage someone in a feedback conversation. Make notes on Situation, Actions, Results. Share your plan with a partner and seek feedback and suggestions.

Be Sure To Include In Your Performance Management Process Active Two-Way Engagement Shared Expectations Frequent and Developmental Feedback Some form of the SARS Model

QUESTIONS? COMMENTS?