“One big thing that’s gone? Stack ranking. No longer am I judged against Charles and Adam and Tina and Jeff. Now, either I’m doing a good job for Microsoft or I’m not and my review will now reflect that.”

I know Dick Grote think that forced ranking is great (I just saw him discuss the topic at World at Work in Anaheim) – at least for a period of time – so perhaps Microsoft’s forced ranking simply outlived it’s usefulness. Perhaps they culled enough low performers to start demotivating the people that were left.

Thoughts?

Everyone thinks they’re above average.

This tidbit found via the Damn Interesting blog where they deconstructed a report by some Cornell researchers on the topic. What they found was that the worst performers in a variety of tested categories often rated themselves on par with the best performers and in most cases far above average. Top performers are of no help either. Even they weren’t able to accurately assess themselves, rating themselves lower than their performance merited.

The reasoning for these behaviors is fascinating. Poor performers lack the skills to perform – which are the same skills required to evaluate their performance. They don’t understand that they don’t understand, and so believe their abilities compare positively to their peers.

On the other hand, Top performers incorrectly assume that their competence is shared among their peers – leading them to rank themselves lower than they deserve.

You can see what this looks like in the chart above. People that fall into the lower three quartiles believe they performed better than they actually did. The highest performers underestimate themselves.

There’s relevance here to self-assessments as the HR world understands them. When asked to evaluate themselves on a variety of competencies, it would seem that people can be expected to incorrectly rate themselves most of the time. Poor and average performers will overestimate their abilities, and top performers will underestimate them.

So what to do? I think that the importance of gap analysis makes itself evident here. It’s only through external feedback that people can understand the difference between what they believe to be true and others’ perceptions of the reality. There’s nothing clearer than a competency gap:

 When you can see what you think about yourself right next to what others think about you – there’s simply nothing more compelling to a change in perceptions and ultimately, in behavior.

We asked, “What is your most pressing HR issue?” 

We had 50 people respond to the poll, and the results are interesting. Despite all the talk about succession and compensation, the core issue (28%) for our respondents was Performance Reviews followed followed closely by Goal Alignment (24%).

To me, it indicates that Performance Management and Goal Alignment are still the biggest pain points for HR practitioners. They represent the heart of talent management initiatives, and Succession and Comp. are just further down in the hierarchy of HR needs.

I’d be curious to hear what you guys have to say about the results. Do you think they’re generally representative, or are they skewed for some reason?

The solutions are not the “end-all-be-all” and will not solve all of the issues in the performance review process.  They are though a huge enabler to level the playing field, eliminate (or at least minimize) the emotional factors involved during the difficult review process, and have the ability to build in the necessary flexible required to accommodate the changing demands of an increasingly dynamic workforce. 

The first bit: don’t be defensive. It’s everyone’s first instinct to try to prove why what we’ve done was the right thing, but often that response leads to a spiral of negativity. It’s a difficult response to control, but you’re better off seeing it as an opportunity to find out what you can do to improve.

1. What the heck is my job again?
Being just one piece of a bigger entity like a company is not an easy thing. It’s sometimes hard to know what part I need to play to add the most value. I want to add as much value as possible because I want to advance my own career, make more money and do something important with my life. Our performance management system lets me understand what I can be doing to support the company’s larger goals, know what’s expected of me and find opportunities to do bigger and better things.

2. Why is THAT guy driving a free Touareg?
At our company meeting this past January, four VW Touaregs were given out to top performers -people who add a lot of value to the company and our customers. Two went to salespeople. They bring in the bucks, so fine. But two went to regular employees. Why are they driving brand new, free cars (or getting watches, vacations, bonuses – you get my drift)? If I know why, I can work at those qualities and results and get myself a brand new ride next year. But what are those qualities, what is the measure of success? Without performance management, it’s anecdotal, arbitrary and simply unfair.

3. What is this company doing, anyway?
I now know what it is I’m meant to be doing (see #1), but what is everyone else doing? Why does any of this matter? What is this company striving at? What are the strategies and tactics that will make us all (and me, particularly) successful? Our performance management system lets me understand that. How what I’m doing aligns to what my boss and his boss are working on. Why what I’m doing matters. And I want it to matter.

4.  What’s wrong with me?
I admit it – I’m not perfect. I’m close, dammit, but I’m just not there – yet! What can I do to get better? What areas do I need to work on to perform at the next level? Without performance management maybe I’ll figure it out and maybe I won’t. With performance management, my development needs are outlined and I can know where I need… (ahem) work. Even better, I can get my boss to agree so when I nail those things, he has no choice but to admit it.

5.  What’s great about me?
Like I said, I’m pretty close to perfect – now tell me about it! It makes me feel good and lets me know I’m on the right track. Performance management forces my peers and my boss to tell me what I’m good at so I can lord it over everyone and do my special victory dance. Ok, no dancing, but you get the idea. People, myself included, like to know what we’ve done well so we can keep doing it.

6. Pay me more money. And a bonus, too.
What’s that, I achieved every goal we set out? Nice. Pay me. When I know what I’m being measured on, I can work against those goals. When I achieve them, there is no choice but to recognize my performance. If the company doesn’t, I can take my clear track record of success elsewhere.

What do you all think? What are the reasons you like (or dislike) the results of your performance management system or process?

It reminds me of all the times I’ve encountered such things in my own professional career. I once had a boss who was so generally offensive for lack of emotional intelligence that her staff was a constantly shifting grouping of people who rotated into her department hesitantly and out of her group as quickly as possible. Vendors would refuse the company’s business once they understood who they’d be required to work with. But this company had no formal performance management or 360 process that would have enabled the feedback that may have had a chance to fix things. The result was a largely ineffective group.

Changing people’s behavior is one of the most difficult challenges there is, but without an infrastructure for providing feedback, it’s virtually impossible. Hank Paulson, the CEO of investment bank Goldman Sachs delivered a memorable quote that I picked up somewhere:

“One of the things we have done for years is 360-degree reviews.  It’s amazing when you go to a leader and say, “There are 30 people who reviewed you, and 30 of them trust you.  But all 30 say you don’t listen well.”  It has an impact.”

 

This one should have made it into our worstreview contest.

Via Regina comes a performance review that perhaps many employees would love to give, but don’t. There are probably a few lessons to be derived from this, but at least one is – companies of all types are better off creating a proactive review process that invites feedback than having their management reviewed in public after an entire shop  of employees quits simultaneously.

Another take-away from Phil is that people don’t quit jobs, they quit managers.

If you feel like a general commanding an army of direct reports, SuccessFactors has the right on-demand artillery to help you align, develop, motivate, and maintain your high-performance workforce.

Follow the trail at Dubs’ blog, at our blog, at Regina’s Blog, and this guy’s blog. 

If you’ll read into the comments at Regina’s blog, you’ll see I promised a demo of the automated content support functionality for the bloggers and blog readers out there. I wasn’t kidding. I’m working on putting it together right now – more info to come.