What every manager should know about performance
I’ve had the wonderful opportunity to work directly with senior leaders from more than forty Fortune 500 companies and several mid-sized companies over the last few years on enhancing their company’s performance, primarily by improving the performance of their people (individuals and teams). Along the way, I’ve seen all types of effective, not-so-effective, and downright crazy approaches to performance management. Let me share what I’ve learned to be the foundation for high-performance within the business environment.
Summary: The four keys for high-performance and effective performance management are:
- Our team members need to know what is expected of them – what outcomes they are expected to provide – along with how those outcomes will be measured.
- They must have what they need to succeed in producing those outcomes and delivering on those expectations.
- They should be positioned to leverage their strengths to achieve those outcomes.
- They should be working within a company/work environment intentionally designed for their success.
Notice that these four keys are more about the management of the employee than the individual employees themselves. This is a foundational truth of performance management. Creating the environment in which our employees can succeed is more important – that is, it plays a larger role in their performance – than the employee’s actual abilities. While this may sound odd or counter-intuitive to many (maybe even you), I’ve had the opportunity to see the inner workings of numerous companies each year and it’s what I’ve seen time and time again.
There are some companies that hire extremely talented people, then bury them under a ‘this is how we do things here’ culture, while other companies hire ‘regular’ people and have a work environment that allows them to consistently achieve amazing things.
On the importance of building a high-performance environment (versus selecting a great strategy), management expert Peter Drucker said, “Culture eats strategy for breakfast every time.” And a similar statement can be made about performance. Regarding performance, “the management system trumps the abilities of the individual every time.” If we make it difficult for our people to achieve within our environment, our (best) people will simply leave and go elsewhere. After all, their goal is to succeed. They don’t want to waste their time fighting against their work environment. But many management teams don’t seem to realize this.
#1: Our employees need to know what’s expected of (each of) them.
I have never met a productive, confused person. If our employees don’t really know what they are expected to achieve, how can we possibly expect them to achieve it? (And this is about outcomes, about results, not the details of how they get those results. Yes, the results should be achieved within cultural values, or our business’s norms. But, we can’t use that as an excuse to tell them exactly how they must get those results. That simply and needlessly ‘ties their hands’.)
It seems so obvious when written, but it is shocking to me how often I see that employees don’t really know what their boss expects them to produce. They may know ‘what they are supposed to do’, but not what results they are expected to produce. And, it’s amazing how often the goals or objectives that are created at the beginning of the year have almost nothing to do with what the team member ends up being evaluated on at the end of the year. This is called the ‘tension challenge’, where the team member is told to do one thing, but evaluated on something completely different.
As managers, we need to be clear to our employee(s). We need to communicate in a way that the employee understands – and is actionable by the employee – what we expect our team members to produce or achieve. By ‘actionable’, I mean communicate expectations within their control and their ability.
Whenever possible, we need to ensure these expectations align, or better yet, are integrated with, the goals of the team members. In other words, the sum of the expectations of the team members would equal the expectations of the team or department.
Our team members also need to know how these outcomes will be measured. For example, is a salesperson evaluated only on the sales revenue they generate? Or, on the profitability of those sales? Do they get more credit for opening new accounts, or selling new products or services? On what basis will their performance be evaluated?
On this point, I encourage managers to be fair to the employees and tell them at the beginning of the year – at the same time their objectives are being set – how they will be evaluated at the end of the year. This includes what it takes to achieve different performance levels. (For example, assuming the company uses a 5-point performance scale with 5 being ‘excellent’ and 1 being ‘poor’, what does it take to achieve a 1, 2, 3, 4 or 5?) And if things change during the year which impact what you expect from your team members, then change their goals and expectations accordingly.
The consistent push-back I get from managers is ‘how can I possibly know at the beginning of the year how the year will play out, and therefore, how I will rate the employee at the end of the year?’ Not meaning to be trite, and yet be honest, my answer is ‘that’s our job.’ And if we can’t do it, how can we possibly expect our employees to get it right? They have less information and more constraints on them than we do. And realize, we’re not eliminating the risk of the unknown. By delaying to set the standard of performance, we’re not improving the situation. We’re simply transferring all the risk and unknown onto the employee. Because without knowing how they will be evaluated, and what it takes to achieve each performance level, our employees are really working in the dark.
The unfortunate compromise that I see time and time again is that although the employee didn’t actually produce the results the company needed – because the manager didn’t make it clear – they get ‘points’ for effort. So the individual gets a good performance score, even while the company didn’t get what they needed. And this is when things start really going awry.
The most straight-forward way to do this is to look at the business expectations of the team (or department or whatever the relevant organization unit might be). The ‘meets expectations’ rating of the team members should add up to meeting the expectations of the unit.
#2: The team member must to have what they need to be successful.
While I can go really deep in this area, for now I’ll stay at a high level. Here we can simply begin with the question, ‘how can we possibly expect our employees to achieve their goals, if we don’t give what they need to do so?’ Yet, you’d be surprised how many managers seem to think their job is to give their employees as little as possible and still expect them to hit their objectives. It’s as if they are forcing them to make it through an obstacle course filled with challenges and delays. It’s as if they are thinking, ‘if you’re good enough, you won’t need much from me or the company to achieve your objectives’. What they fail to realize is how much more that person would be able to accomplish if truly given what they need. I see it over and over again. As managers, our objective is/should be to help our team – each team member – achieve as much as possible, and at the very least hit their individual objectives so the team achieves its overall objectives.
Here is where most managers make their mistakes. They assume goal-setting, and performance management overall, is a one-way conversation where they tell the employee what’s expected and leave it at that. But this is where we need to ‘turn the tables’ and ask our employees what they need to achieve, or even surpass, their goals. What resources, tools, authority, etc. do they need to be successful?
Once our employee has been able to say, “okay, well if that’s what you what me to achieve then this is what I need to make it happen…” That’s when we can expect to have our employees truly buy-in to their goals because they have had their chance to say what they need to succeed. They are now part of the planning process. (By the way, this is also a great way to realize if the goals we set are actually reasonable and attainable. And if they aren’t, it’s much better that we understand that at the beginning of the year – when we have time to adjust – than at the end of the year.)
#3: Allow the employee to leverage their strengths in the achievement of their goals.
(I’ve written several articles that go into much more detail in this area. So here I’ll just cover the major point.)
It has been proven time and time again that the number one driver of team performance is how often the members of that team are allowed to play to their strengths. Yet, disappointingly, the percentage of people that say they are able to leverage their personal strengths in their daily work is actually dropping. The latest research tells us that the number is down to just 12%. Barely one in ten people actually get to play to their strengths. It’s the number one driver of team performance, and as managers, we’re terrible at it!
Here, many managers fail to have the right perspective to optimize the performance of their team. They seem to focus on ‘fairness’ or better stated ‘equality’ amongst their team members, rather than allowing them to do their work however works best for the individual team members. Our goal as managers of a team is to optimize the performance of the team, not ensure that everyone does everything exactly the same way, or does (and is evaluated on) exactly the same things.
Many managers seem to believe that all employees should be required to perform their jobs in the same way, be equipped the same way, positioned the same way, and evaluated in the same way. Yet, when you think about it, actually that is what’s called ‘treating people like a number’, which almost everyone will admit is a bad idea. Telling the employee how they must, or should, perform their work is also called ‘micro-managing’. No one likes it, and study after study proves it to be ineffective. Yet, manager after manager still does it.
‘Allowing people to leverage their strengths to achieve their objectives…’ at a basic level this means allowing the person to achieve their objectives in the way that works best for them. And, it is the best way to increase the performance of the team. Of course, we need to ensure that they don’t violate the values or core principles/beliefs of the company while achieving those results. And, yes, this does put more work on the manager to manage their teams, but that is our job after all.
To create the highest performing teams, we need to treat and position each employee uniquely (which requires us to actually know the strengths of each member of our team). Consistently, results have shown time and time again to far outweigh the ‘cost’ of additional management time invested.
Simply stated, positioning employees so that they can leverage their strengths on a daily basis in the achievement of their goals and objectives is the closest thing to a ‘silver bullet’ for performance improvement that I have seen in all my years of being a student, practitioner, and consultant in the area of business and personal performance management.
#4: Provide a work environment intentionally designed for the success of the team/employee
When working with Brad Anderson, the former CEO of Best Buy, he said it this way, “Most management systems are created for the convenience of the manager, not the performance of the team. And that needs to change.” When we analyze them, most companies’ management systems are still designed around making the manager’s job easier.
Few organizations truly intentionally design their work environment to help their employees be more productive, and have more success. Instead, management systems have layers of decision-making authority, standard policies & procedures, and required administrative activities that really have nothing to do with the performance of the organization. And, new layers continue to be added. Many companies seem to set up ‘organizational obstacle courses’ for their employees to navigate, as if the intent is to challenge the employees to see if they can survive, rather than thrive, working there. They seem to think the measure of management success is providing their employees as little as possible while hitting minimum levels of performance. They seem to miss the point completely that the better you prepare, equip and support your employees the better they will perform and the more profits will climb.
Now, providing a detailed analysis of your company’s work environment is beyond the limited space here, but let me suggest a simple, yet eye-opening, exercise in understanding how to intentionally design or adjust your work environment. Take four or five roles across your organization (from multiple levels and departments) and pretend the results of the business are completely dependent upon the success of the people in those roles. Ask people in those roles what could be done to improve their success, what obstacles hinder them, and/or how could their performance be better equipped or supported. What most organizations find, is that 60-70% of the responses include the same items. These are the obstacles within your company’s work environment that should be changed to improve overall performance.
Another idea is to question the true intent and impact of any changes or additions in your environment. Does the change or addition make it easier for your employees to perform?
So there you have it, the four primary keys to performance management. When you apply them with the members of your team, you should see performance quickly and significantly improve.
Question: Which one of these is the most difficult for you to implement on a consistent basis within your environment? Why do you think that is?
