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Dr. Jim Kauffman Consultant and Product Manager DDI
Reinvent Performance Management into a Leadership Process
Diane Bock Senior Consultant DDI
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Reinvent Performance Management into a Leadership Process
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Who We Are
Global execution excellence across 91 countries
59% of revenue from repeat customers
Industry’s top instructional designers, technologists & consultants
Talent management consultants + Talent Acquisition, + Leadership Development, + Succession Management
45 years of research and innovation in assessment & learning
Principles behind our services transform lives in and out of the workplace
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Talking about Performance Management
© Development Dimensions Int’l, Inc., 2016. All rights reserved. © Development Dimensions Int’l, Inc., 2016. All rights reserved.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Poll—Rationale for changing performance management—Choose all that apply q People hate performance management.
q Executive leadership has mandated a change in Performance Management.
q PM has been damaging to employee engagement, collaboration, or performance.
q Backward-looking evaluation is no longer as important to company success as forward-looking growth, learning, and development.
q Feedback and coaching needs to occur more frequently.
q The current annual system is too static for our environment of changing priorities.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Change to:
• Simpler • Consider science of human motivation• Less evaluation • More emphasis on development and growth• More focus on fewer objectives & behaviors• Separate from compensation decision• Focus on the future not the past• MORE CONVERSATION
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Five Performance Management Pitfalls
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Pitfall 1: No Clear Purpose for Performance Management
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Purposes of Performance Management for Organizations that have Changed PM
• To inspire people to do their best work.• To inspire and retain 100% of solid performers.• To drive execution through ongoing feedback that aligns
to agile and innovative business.• To empower and engage employees through more
meaningful discussions between managers and their reports.
• To reinforce our organizational values and support our mission to maximize the customer experience.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Pitfall 2: Stretching Performance Management in Too Many Directions
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Discussing Pay Raises Separately
• HR may still have guidelines on percentages allowed for meets, exceeds, does not meet.
• Manager considers performance, where the person is in their pay range, the HR guidelines.
• Have the pay discussion at a separate time…for example on employee anniversary.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Pitfall 3: Over-focus on Complicated Process
“Simple clear purpose and principles give rise to complex intelligent behavior.
Complex rules and regulations give rise to simple stupid behavior.”
- Dee Hock, founder of Visa
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Example: Complicated process— proficiency levels
• What’s the difference between “awareness” and familiarity?”
• What’s the difference between “difficult” “considerably difficult” and “exceptionally difficult?”
• What if 50% of situations encountered were “difficult,” and 50% were “considerably difficult,” what rating do I get?
RATING SCALE STRUCTURE Proficiency level Behavioral competencies Func6onal competencies
Expert (level-‐5) Excep6onally difficult situa6on Key resources Advises other
Demonstrates Comprehensive Expert understanding of concept and process
Advance (level-‐4) Considerably difficult situa6on Broad understanding of concept and process
Immediate (level-‐3) Difficult situa6on Require occasional guidance
Understanding of concept and process
Basic (level-‐2) Somewhat difficult situa6on Familiarity with concept and process
Awareness (level-‐1) Simplest situa6on Require regular guidance
Awareness of concept and process
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Simple Templates to Enable Performance Conversations
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Simple Templates to Enable Performance Conversations
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Pitfall 4: Under-focus on Leadership Skills
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Skills by Years Needed to Become an Expert
Coaching skills don’t blossom on their own, interven7on is needed.
“High Resolu.on Leadership: A Synthesis of 15,000 Assessments into How Leaders Shape the Business Landscape” DDI 2016
Mastery Never Occurs for Coaching and Development
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Percent Rating the Same Performance Management System as “VERY GOOD”
Gallup April 4, 2013
My Manager is THE BEST!
70% My
Manager is Below Average.
2%
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Coaching Problems
• Happens too rarely• Poor skill • Lack of clear expectations/
agreements for performance
• Waiting until the performance shortfall is chronic or critical
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
People who receive assessments in the bottom 10% have a 36% chance of making it into the top half
within a year.
‘‘ ‘‘
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Coaching Problems
• Happens too rarely• Poor skill • Lack of clear expectations/
agreements for performance • Waiting until the
performance shortfall is chronic or critical
• A fundamental misunderstanding of coaching
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
The Misunderstanding: A Focus on Reactive Coaching
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Proactive Coaching is the Missing Piece
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Assessment Data
10,000+ Assessment Center Par.cipants, DDI
COACHING AND DEVELOPING OTHERS Clarify the Situa?on
Provide Feedback
Convey Expecta?ons
Assess Gaps / Opportuni?es
Guide Collabora?ve Development
Foster Confidence
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
32
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
33
1. You are an expert. 2. You remember
what it was like to learn to ride a bike.
3. You know very well what can go wrong.
4. You can go online and find good advice.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Common Barriers to Proactive Coaching
• Manager not familiar with employee work, tasks, work partners, or pending challenges.
• Employees need coaching in areas where his/her direct manager lacks experience or expertise.
• Manager can’t imagine what could go wrong or be challenging.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Telling Wow, that’s his good advice? Make sure you are
well prepared.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Seeking is the Key to Proactive Coaching
Let’s touch base on your new assignment. What’s
your biggest challenge right
now?
I’ve just been working on
that… I have a customer with an unusual request.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Pitfall 5: Disconnected from the Science of Human Motivation
• Stacked or forced ranking on a bell curve
• Single overall ratings• Brain-wired with bias for
negative
Our brain’s response to lack of acceptance, uncertainty, or loss of
control
• Stressed • Social pain • Fight or Flight • Diminished cogni?ve ability
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Leader Skills that Consider Science of Human Motivation
Brain-‐Friendly (trust-‐building) Leadership Techniques
Praise Delega6on
Transparency Empathy Autonomy Authen6city
“Neuroeconomics and the Firm”*
*by Paul J. Zak, American neuroeconomist
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Five Pitfalls
1. No clear purpose declared for Performance Management
2. Stretching Performance Management in too many directions
3. Over-focus on complicated process4. Under-focus on leadership skills5. Disconnected from the science of
motivation
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Advice • Clear/specific goals alone can increase performance 36% (CEB).
• Coach on operational targets (i.e. SMART objectives), behavioral expectations also called “competencies,” and people relationships.
• Decrease time spent looking backward and creating documentation.
• Increase percentage of time spent in PROACTIVE coaching.
• Discontinue a single overall rating, do not use forced ranking or a bell curve.
• Separate compensation discussion.
• Simplify—and define a clear purpose for performance management.
• Meet personal needs for esteem, empathy, involvement, trust, and support.���(i.e. align with science of motivation)
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Questions?
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Contact us…
Diane Bock [email protected]
Jim Kauffman [email protected]
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Additional Slides
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Does human performance follow the bell curve? Research says NO.
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
In over 93% of cases, a Paretian distribution
more closely represented the distribution of
performance than a bell curve (Gaussian
distribution).
THE BEST AND THE REST: REVISITING THE NORM OF NORMALITY OF INDIVIDUAL PERFORMANCE
ERNEST O’BOYLE JR. and HERMAN AGUINIS
A Normal Distribu6on (black) Overlaying a Pare6an Distribu6on (grey)
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
“Let us make a special effort to stop communicating with each other, so we can have some conversation.”
- Mark Twain
Conversations Matter
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
So Many Connections, So Many Questions
• Should we drop Performance Management?
• Should we drop performance ratings and/or rankings?
• How can we set pay raises without performance ratings?
• Do we need documentation? Document what?
• What are the legal ramifications of changing?
• How can we ensure managers will be good coaches? About what should���they be having regular conversations?
• What software/technology do we need to support the process?
• How do we get management support for changing?
• What kind of change management effort is needed?
• How will we make sure star performers continue to get visibility?
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Simpler Competency Rating Approach
COLLABORATING
Working coopera.vely with others to help a team or work group achieve its goals.
• Contributes to goal accomplishment—Makes sugges?ons, volunteers assistance, offers resources, or removes obstacles to help the group achieve its goals.
• Asks for help and encourages involvement—Leverages others’ skills and gains their support by asking for their ideas, opinions, and par?cipa?on when solving problems, making decisions, and carrying out plans.
• Informs others on team—Shares important or relevant informa?on and ra?onale with others; summarizes to check understanding.
• Models commitment—Adheres to the work group’s expecta?ons and guidelines; fulfills team or work group responsibili?es; demonstrates personal commitment to group goals.
- Met expectations - Performed above expectations - Did not meet expectations
© Development Dimensions Int’l, Inc., 2016. All rights reserved.
Focus on the CONVERSATION
2015 Research on “Performance Management” by Nick Holley, The Henley Centre for HR Excellence, and Aksshay Malaviya
2015 Research on “Performance Management” The Henley Centre for HR Excellence
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