SHRMingham

You Get What You Pay For!

Have you ever had a conversation like this with a manager?

“I need for you HR people to come train my employees!  If I have another month like last month, I won’t be able to BUY a customer!”

I had a conversation that sounded a lot like that.  Let me tell you the (only slightly embellished) story.

I got a call from a guy named Bill who owned a restaurant in a business district in Atlanta.  His restaurant did a lot of business at lunchtime, catering to the businesspeople working nearby. Bill had recently gotten so many complaints from angry customers that he was very concerned that he was about to lose his restaurant.  He decided he’d better do something, so he called up an HR consultant to come out and do customer service training for his wait-staff.

(Have you noticed how, when things aren’t going well with employees, managers call up the HR professionals and want you to either 1. “Come train them,” or 2. “Come help me get rid of them!”)

To make a long story short, a little digging revealed some very interesting facts. Two months ago, the servers were doing a pretty good job.  Customers didn’t have to wait very long for a table, service was pretty good and the food was great.  The same wait-staff still work for the restaurant. The restaurant is using the same order-entry system they used 2 months ago, and testing showed the system to be working properly.  The kitchen staff is also the same as two months prior.  But customers are complaining that they are not getting what they ordered, they are not being offered drink refills, etc., and their bill payment is taking too long. Bill has been “comping” meals and trying to do damage control with his customers, but he is going broke and getting desperate. 

After a little more drilling down, the problem surfaced.  The only difference between operations now and operations 2 months ago is the boss’s new incentive plan.  His intentions were good, but Bill was paying his servers for bad behavior!

Bill decided about a month ago that the only way to boost his small business was to get more customers in and out at lunchtime.  If he was able to speed up the process, customers would not have to wait for tables, they could get in and out faster, and he could serve more people.  So Bill developed an Express Menu to give to every lunch customer, and the streamlined menu helped the kitchen run much more efficiently.  (The customer could ask for the full menu, but it was not routinely offered.)  His other idea was to get the servers to pick up the pace a little, too.  He came up with a $50 bonus paid each day to the server who took orders the fastest!  Customers were given a card when they were seated, and when the server keyed their orders into the order entry system, he keyed in the time they were seated and the time the order was entered.  The server who took the most orders in the least amount of time got the $50. Let me tell you it worked!  The servers were really fast getting those orders taken and entered!

But there were problems.  Customers complained that the food was not being served the way it was ordered.  For example, they might ask for no mustard, sauce on the side, or well done, but they were not getting the food that way.  Also, they complained that once their order was taken, they didn’t see much of their server.  The food sometimes sat in the window and was not served to the customer until it was cold.  Customers’ beverages were not being refilled. They also complained about having to wait too long to get their checks and to get their bill settled.  Bill found himself paying the bonus every day and dealing with very angry customers.  Rather than training Bill’s servers, I trained Bill.  The lesson was “You Get What You Pay For.”  Bill’s intentions were good, but his reward system only addressed a portion of the overall goal, and created more problems than solutions. 

How many managers are guilty of rewarding bad behavior? Here are 3 examples I have run up against in my career.

 

1.  I once put a Safety Football Game into place at the company where I worked. Employee teams were rewarded for working safely, and for identifying and correcting unsafe conditions and unsafe acts. The way it was initially structured was not well thought out.  The problem - there was a pretty substantial game “penalty” for an injury.  And the result - employees were pressured by their teams not to report! Reducing the number of reported incidents and covering up injuries was not my goal, but that is what I was paying them to do. I learn fast, however, and the rules of the game were modified so that the penalty for an injury was only the loss of a few yards, and those yards could be quickly regained through good behavior!  At that point the safety game took off and in the right direction!  

 

2.  When you have a dependable worker with good skills and a reliable work ethic, how is he rewarded?  Often he is rewarded with more work!   A manager needs someone he can trust to handle the project so he puts the responsibility onto his best workers, again and again and again.  Do the poorly performing employees ever get any better? Of course not!  Why should they take on more responsibility and work harder when you are rewarding them for doing just enough to get by?  Better address this quick before you lose or burn out your good performers!

 

3.  I recently had a long conversation with a manager about an hourly employee who often reported to work late, and came back late from lunch breaks.  How was the manager handing the situation?  She was letting the employee stay at work, on the clock, until he got in his 8 hours every day.  The bottom line here was that she was rewarding the bad behavior and allowing this guy to set his own schedule.  He was coming and going whenever he wanted.  Yep, as Deputy Barney Fife would say, we had to “nip it in the bud! Just nip it in the bud!”

     

In summary, a good rule of thumb when dealing with substandard performance issues is to first see what behaviors you are rewarding, because you get what you pay for! 

Editors Note: Today's post is brought to you by Toni Braddy. Toni is a Human Resources Generalist, SPHR and OSHA certified, with extensive experience in training, development and performance imrpovement, safety and risk management, compensation and benefits and strategic planning. Since being displaced at UAB, she is serving as the Administrative Coordinator for the Radiology Body Imaging Fellowship Program for UA Health Services Foundation. 

Part two - Everything I Need To Know About Performance Feedback and Evaluations I Learned From Bear Bryant

Editors Note: Today's post is a continuation of the previous post.

Numbers 3 - 5 of some things I learned from Bear Bryant.

3.  Send in the plays! A good coach will not expect the players to read his mind, or to try to figure everything out on their own.  A good coach will have the players on the field, as well as people with other perspectives of the game, monitoring the action.  He will want to know what is working and what is not working.  A good coach expects players to bring to the huddle the problems they are struggling with, and they will together look for barriers to success and try to get those problems resolved.  But no coach worth his salt is going to sit on the sidelines and wait until the game is finished (or until the season is over) to start giving and receiving feedback from the players!  Why then do managers think they will be successful only doing performance reviews once a year?  If what your team is doing is not working, find out what is not working and why and make effective changes.  Get input from the players and the other members of your team and take action. Also, what would happen to a coach if he left a poorly performing player in the game for the entire game, knowing that the player was ineffective?  What affect would that have on the rest of the team?  Yep, managers can learn a lesson on this from a football coach, and if a member of the team is not pulling his weight, put him on the bench!  Pull him out and look for those barriers to success, and address them, and do it in a timely manner.  This sort of thing can’t be done just once a year.

4.  Communicate well! This means that the manager has to deliver the message in a manner such that the employee can hear what is truly being said.  In the earlier example, Cindy could not get past the manager’s use of the term “weakness.” She arched her back like a cat and started hissing and spitting. As HR professionals we understand what the manager was trying to get at.  Every employee can learn more and contribute more, and has the potential to accomplish greater things.  A good manager has the responsibility to help employees in their professional development by identifying experiences and opportunities that will challenge the employee to learn and grow. Donna’s willingness to help Cindy with professional development and career growth did not come across as such when Donna talked to Cindy about “her weaknesses.”  

5.  Be the coach at all times! You don’t like surprises and your employees don’t either.  Engage in two–way communications with your players on an on-going basis.  When you do written performance appraisals once a year, the evaluation will not be a surprise to the employee if you have been coaching him all along. What you hear from your employee during that performance evaluation meeting will not be a surprise to you.   Take every opportunity to develop talent and to bring in new talent to build up the team. Work your team hard and reward them well.

I have only one more thing to add. Roll tide! Roll!

Editors Note: Today's post is brought to you by Toni Braddy. Toni is a Human Resources Generalist, SPHR and OSHA certified, with extensive experience in training, development and performance imrpovement, safety and risk management, compensation and benefits and strategic planning. Since being displaced at UAB, she is serving as the Administrative Coordinator for the Radiology Body Imaging Fellowship Program for UA Health Services Foundation. 

Everything I Need To Know About Performance Feedback and Evaluations I Learned From Bear Bryant - Part 1

Editors Note: This is part 1 of a 2 part series.  Check back Wednesday for the exciting conclusion!

Have you ever had a conversation like this with a manager:

“Bill, I’m calling again about the annual performance appraisals for your department. They are now over 2 months late!  Is there a problem?”

“Yeah, there’s a problem!  I don’t want to do them!  These people are worthless.  I want to get rid of them all and start over again.”

Yep, I’ve had that conversation a time or two.  I’ve also found myself asking a manager, “If you don’t care about meeting the timelines for your work, what message are you sending to your employees?”

Here’s another one:

“So Donna, how did the review meeting with Cindy go?” 

“It was awful!  I don’t understand!  That was the best evaluation I have ever given an employee, but Cindy was angry.  When I started going over the section about ‘weaknesses’ and ‘areas for improvement,’ she hit the roof!"  

Performance evaluations and feedback, when used poorly, are ineffective and painful.  A lot of managers give annual evaluations as if they are daycare workers sending reports home to unsuspecting parents. Our managers, however, are not babysitters and our employees are not children.  They want (and need) to know how they are doing. So the question is - How do you give useful feedback to your employees?

Look to legendary Alabama coach Bear Bryantfor the answer! 

Long before I moved to Alabama and became a Crimson Tide fan, and long before I considered HR as a career, I was fortunate to see Bear Bryant coach in his last game at the Liberty Bowl in 1982. The influence he had over his team, the fans, and the game radiated from him. It was amazing just to watch. The image is still as fresh in my memory was it was almost 28 years ago.        

Okay, so I haven’t had much of a football career. The only football game I played in was a high school “powder puff” tournament, and some skinny girl on the other team scratched me and held me by the hair, and got us both tossed out of the game (I admit that I reacted somewhat poorly).  But I do watch a lot of football, and I can tell you, if managers see themselves as coaches rather than babysitters, they can actually get somewhere!

 Here are some things I learned from Bear Bryant.

 1.  Know your players! Who are these people? What are their roles? How long have they been with the team?  What training have they had?  How are they compensated?  What tasks do they like to do? What do they do well?  Who do they work well with and who do they have issues with?  Who are the leaders and who are the followers?  Who will take chances, and who does just enough to get by?  A good coach will know all these things about his players and will never assume that each one is the same as the next one!

2.  Teach them!  Most players, like most employees, come to you with some experience.  But it is not wise for you to assume that they know the game, or that they know your game, your plays, your strategies, and your goals.  For your players to be successful, each one has to know what is expected and why, and how to do their part. They need to know how doing their part affects other players as they do their jobs.  Obviously a blocker who is letting a tackle get around him is making it pretty difficult for the quarterback to throw the ball down the field.  The quarterback who overthrows the ball is going to make it pretty hard for the receivers to catch it. The workplace is identical in that every person doing his part contributes to the overall success of the team.

Editors Note: Today's post is brought to you by Toni Braddy. Toni is a Human Resources Generalist, SPHR and OSHA certified, with extensive experience in training, development and performance imrpovement, safety and risk management, compensation and benefits and strategic planning. Since being displaced at UAB, she is serving as the Administrative Coordinator for the Radiology Body Imaging Fellowship Program for UA Health Services Foundation. 

Discretionary Labor/Effort - Why Your Company Needs to Think Like a Yahoo Community...

Let's roll out a couple of organizational realities today to get into the topic at hand:

1. You've got employees.

2. The employees come to work each day.

3. The employees give you minimal effort without you asking.  That's what you get in exchange for salary, benefits, etc.

4. You can get more than minimal effort for your money in several ways. You can scare your employees through punitive measures (although the returns are short-lived), you can become best in class in measuring results and performance management, etc.

5. It's hard to get more than minimal effort.  Damn hard.

6. The easiest path to get more than minimal effort is to hire people who traditionally give more than the minimum.

7. There's only so many of those to go around.

8. For everyone else (those that migrate to giving the minimum), you've got to come up with a culture and strategy that engages employees to give more than the minimum (I'll call this DISCRETIONARY EFFORT), often with no financial rewards.

In short, you need to think like an online community.  You know the type of community - one like Yahoo Answers that engages readers to provide increasing amounts of time and labor with no direct path to increased rewards.  All because they LIKE AND ARE ENGAGED BY THE CONTENT/TOPICS and get a non-financial high from contributing.

Need an example?  How about ThisNext out of Santa Monica and how it corrals the sweat equity of volunteers.  More on getting free labor from the engaged user at BusinessWeek:

"It's dawn at a Los Angeles apartment overlooking the Hollywood Hills. Laura Sweet, an advertising creative director in her early 40s, begins to surf the Net. She searches intently, unearthing such bizarre treasures for sale as necklaces for trees and tattoo-covered pigs. As usual, she posts them on ThisNext, a social network where people exchange shopping leads. Why does she spend so many hours each week working for free? "It's sort of a cool feeling that you're influencing people," she says.

A half-hour's drive to the west, a serial entrepreneur named Gordon Gould strolls into the Santa Monica offices of ThisNext. Gould has managed to entice an army of volunteers, including Sweet, to labor on his site without pay. Traffic on ThisNext is soaring, with unique visits nearly tripling in a year, to 3.5 million monthly. Revenue comes from advertisers, who pay to display their wares amid so many shoppers. What's in it for the volunteer workers? "They can build their brands," Gould says. "In their niches, they can become mini-Oprahs."

Here's how it works: Entrepreneurs like Gould build meeting places that provide visitors with tools to express themselves, mingle with friends and strangers, and establish their personal "brands." The result, when all goes well, is an outpouring of creativity. These bottom-up efforts have produced not only ThisNext but also YouTube (GOOG) and even American Idol.

The challenge for managers all across the economy is to harness as much of this free labor and brainpower as possible to their own enterprises. From universities to the computer labs of Internet giants, researchers are working to decode motivations and perfect the art of enlisting volunteers. Prabhakar Raghavan, chief of Yahoo! Research, estimates that 4% to 6% of Yahoo's (YHOO) users are drawn to contribute their energies for free, whether it's reviewing films or handling questions at Yahoo! Answers. If his team could devise incentives to draw in an additional 5%, it would enhance Yahoo's pages, bringing more traffic and advertisers to the site. Incentives might range from contests to thank-you notes."

Now think about your company, specifically our exempt/salaried ranks.  They've got a choice if you aren't really focused on what they are doing.  They can do the socially acceptable norm (40 hours) and go home.  Or, you can figure out what makes them tick, maybe give them tools to work remotely so they can find work/life balance, and watch the hour count go up as they become more engaged in their role and the mission of the company.

It's the holy grail of engagement, and it's part hiring for motivation, and part motivating and engaging once they're in the door.  I suspect much like the woman featured in the BW clip above, the secret sauce to this type of engagement is part praise, part visible scoreboard, and part future career promise for the individual moving forward if they put in the time.

Kind of like why I blog each day, right?  Think about it and figure out what you can do to create that type of "discretionary effort" in your employees.  Remember, they don't have to give you the last ten hours of a 55 hour workweek - the key is to make the value proposition better than Xbox or TV... without money...

Let's roll out a couple of organizational realities today to get into the topic at hand:

1. You've got employees.

2. The employees come to work each day.

3. The employees give you minimal effort without you asking.  That's what you get in exchange for salary, benefits, etc.

4. You can get more than minimal effort for your money in several ways. You can scare your employees through punitive measures (although the returns are short-lived), you can become best in class in measuring results and performance management, etc.

5. It's hard to get more than minimal effort.  Damn hard.

6. The easiest path to get more than minimal effort is to hire people who traditionally give more than the minimum.

7. There's only so many of those to go around.

8. For everyone else (those that migrate to giving the minimum), you've got to come up with a culture and strategy that engages employees to give more than the minimum (I'll call this DISCRETIONARY EFFORT), often with no financial rewards.

In short, you need to think like an online community.  You know the type of community - one like Yahoo Answers that engages readers to provide increasing amounts of time and labor with no direct path to increased rewards.  All because they LIKE AND ARE ENGAGED BY THE CONTENT/TOPICS and get a non-financial high from contributing.

Need an example?  How about ThisNext out of Santa Monica and how it corrals the sweat equity of volunteers.  More on getting free labor from the engaged user at BusinessWeek:

"It's dawn at a Los Angeles apartment overlooking the Hollywood Hills. Laura Sweet, an advertising creative director in her early 40s, begins to surf the Net. She searches intently, unearthing such bizarre treasures for sale as necklaces for trees and tattoo-covered pigs. As usual, she posts them on ThisNext, a social network where people exchange shopping leads. Why does she spend so many hours each week working for free? "It's sort of a cool feeling that you're influencing people," she says.

A half-hour's drive to the west, a serial entrepreneur named Gordon Gould strolls into the Santa Monica offices of ThisNext. Gould has managed to entice an army of volunteers, including Sweet, to labor on his site without pay. Traffic on ThisNext is soaring, with unique visits nearly tripling in a year, to 3.5 million monthly. Revenue comes from advertisers, who pay to display their wares amid so many shoppers. What's in it for the volunteer workers? "They can build their brands," Gould says. "In their niches, they can become mini-Oprahs."

Here's how it works: Entrepreneurs like Gould build meeting places that provide visitors with tools to express themselves, mingle with friends and strangers, and establish their personal "brands." The result, when all goes well, is an outpouring of creativity. These bottom-up efforts have produced not only ThisNext but also YouTube (GOOG) and even American Idol.

The challenge for managers all across the economy is to harness as much of this free labor and brainpower as possible to their own enterprises. From universities to the computer labs of Internet giants, researchers are working to decode motivations and perfect the art of enlisting volunteers. Prabhakar Raghavan, chief of Yahoo! Research, estimates that 4% to 6% of Yahoo's (YHOO) users are drawn to contribute their energies for free, whether it's reviewing films or handling questions at Yahoo! Answers. If his team could devise incentives to draw in an additional 5%, it would enhance Yahoo's pages, bringing more traffic and advertisers to the site. Incentives might range from contests to thank-you notes."

Now think about your company, specifically our exempt/salaried ranks.  They've got a choice if you aren't really focused on what they are doing.  They can do the socially acceptable norm (40 hours) and go home.  Or, you can figure out what makes them tick, maybe give them tools to work remotely so they can find work/life balance, and watch the hour count go up as they become more engaged in their role and the mission of the company.

It's the holy grail of engagement, and it's part hiring for motivation, and part motivating and engaging once they're in the door.  I suspect much like the woman featured in the BW clip above, the secret sauce to this type of engagement is part praise, part visible scoreboard, and part future career promise for the individual moving forward if they put in the time.

Kind of like why I blog each day, right?  Think about it and figure out what you can do to create that type of "discretionary effort" in your employees.  Remember, they don't have to give you the last ten hours of a 55 hour workweek - the key is to make the value proposition better than Xbox or TV... without money...

Expensive Trips for High Performers in a Recession - Ditch Them Even if Someone Else Is Paying?

Most folks agree that in the middle of a recession and with the stinky reputation investment banks have garnered for all-expense junkets lately, incentive trips costing a company hundreds of thousand of dollars are a bad idea.  After all, how could you spend all that money while so many people are hurting in today's economy?

Of course, it's never that simple.  If it were simple, everyone could agree.

For example, here's the toughest question regarding travel rewards from my perspective as a VP of HR.  What do you do with "somewhat extravagant" reward trips for high performers when someone else is paying? (a company whose products you sell and needs access to your sales force, etc.)

Paul Hebert weighs in with his view, and remember, he's a rewards and incentive expert:

"The biggest misconception that is being propagated in the news is that these "junkets" are only for the top executives within a company.  I'm guessing the public has visions of fat, half-naked old men, sitting on pillows with young ladies dropping grapes in their mouths.  Nothing could be further from the truth. 

Most incentive participants are:

• The rank and file sales person whose job depends on ever-increasing levels of performance and contains risk most of us desk-jockeys couldn't imagine.  (Do you want your continued employment predicated on your prospect being in a bad mood after spilling hot coffee on his/her lap in the Starbucks drive-thru?)
• Employees who have exceeded, by a wide margin, the constraints of their job description and have increased the competitiveness of their company
• Members of a company's distribution channel who have stuck with the company to become top producers and advocates for the product, service, brand or company - people the company needs to remain competitive and innovative.
• The spouses, children, significant others, who attend with the person who earned the trip - providing much needed reward for the sacrifices they have made to allow the earner the time and attention being one of the best requires.

Incentive and meeting travel is a critical element in building relationships - especially in this predominately electronically connected world.  These relationships will help companies weather this economic storm, create new business ideas from collaborative conversations, foster innovations that will drive business, and reduce the costs of turnover within organizations.

Do not perpetuate the false information that is filling the airwaves, newsprint and electrons." 

Paul raises some good points related to travel rewards.  Travel rewards most commonly go to PRODUCERS - the sales pros who bring home the bacon, so the company can fry it up in the pan.  And if there's a group out there you want to keep motivated, it's the sales force.

So, why not continue rewards travel for that group, especially if someone else is buying, or the funding comes from the difference in revenue once a sales rep goes over 100% quota against an already aggressive plan?  The counter to this view is the employee relations cost.  After all, the regular folks don't get access to the quota spreadsheet, and they don't know if an affiliate/channel partner is paying for the outing.

They just see the trip, the cost and the brand of the hotel, which decidedly did not find your top sales performers staying at a Holiday Inn Express during the last junket.  With that in mind, my call would be to shelf the extravagant trips for 2009 company-wide, regardless of who pays or how critical the trip is said to be to sales force morale. 

After all, like the saying goes - salespeople can give themselves a raise by selling more.  Most of our employees who see the extravagant trip can't perform their way into being included on the junket, and it stings to see the trip going off as planned when they lost 2 people from their 8 person department last Friday.

Lose the junket for 2009.  I'm betting you won't lose your top sales performers. 

4 Common Sense Ways to turn BAD Engagement into GOOD Engagement...

Fay Hansen's article in Workforce Recruiting is worth your time to read.  Who can argue with the value of engagement?  The primary issue, as Fay undoubtedly experienced in her research, is that while lots of people talk about engagement, they have a hard time defining what they do to improve engagement in their organizations.

Which begs the question - can your front line managers really drive employee engagement in your organization?

The easy answer is yes, but as with many obvious easy answers.... the question is how? or what next?

The dilemma is especially true if you have a wide range of talents and capabilities among your most entry-level supervisors, which most of us do.  Some managers naturally have the gift that comes with instincts and experience, while others struggle.  In other words, they might be in over their heads a little bit initially, which means you get that cute "deer in the headlights" look when you try and talk about "employee engagement."

That's OK - check yourself and understand that every time you say "employee engagement" to an entry level manager, you sound like a consultant who's never managed people....

Square Peg, Round Hole - Can The Traditional Organization Afford to Focus on Strengths?

Is performance management upside down in Corporate America?  Here are a couple of quick observations:

1.  Jobs are structured for the company, not the employee.  I'm not saying that's wrong, just outlining the facts.

2.  90% of the time we spend talking about performance is about how to manage negative variance.

3.  We don't spend a lot of the time evaluating how we can continue to maximize a person's strengths.  We'll tell them they are doing great, give them an "exceeds", then move on to how they can improve their "areas of opportunity". 

4.  The combination of those competencies that create "jobs", are pretty inflexible in corporate America.

With that in mind, it should come as no shock that while we love to read books like "Now Discover Your Strengths" and nod accordingly when discussing, we pretty much go back to the coal mine and expect people to fit in the traditional spaces we've defined.

Scott McArthur recently talked about the power of positive, strength-based psychology in the workplace.  From the sweet rundown at McArthur's Rant:

"Positive psychology suggests that by focusing on people’s strengths rather than on their development needs we can transform wellness at work and as a consequence improve organizational performance.

The notion behind the work that is being done under the banner of Positive Psychology is to enhance our experiences of love, work and play and by doing so encourage wellbeing. This is in contrast to the traditional ways of thinking in both psychology and business where the focus is on finding what isn't working and trying to fix it.

Techniques such as Appreciative Enquiry and Strength finders (Gallup) as well as writers such as Csikszentmihalyi in Flow: The Psychology of Optimal Experience have been extolling the value of adopting this approach for some time. In Gallup’s case they have produced some strong statistical evidence that it works.."

Scott acknowledges in his post that while focusing on employee strengths is a powerful tool, it's problematic for the traditional organization to figure out how to do it.

Here's my take.  The power of focusing on strengths in corporate America is probably best used in a combination of performance management and engagement.  The smart managers know that they can't adjust a role to fit the employee's strengths with a 100% match.  But with the right amount of praise, coaching and organizational flexibility, they can create an environment where the employee understands that the more efficient they are in their formal job, the more they can chase what they really love to do, and maybe even innovate and create stuff on the way.

And that would be a pretty cool thing... 

Is performance management upside down in Corporate America?  Here are a couple of quick observations:

1.  Jobs are structured for the company, not the employee.  I'm not saying that's wrong, just outlining the facts.

2.  90% of the time we spend talking about performance is about how to manage negative variance.

3.  We don't spend a lot of the time evaluating how we can continue to maximize a person's strengths.  We'll tell them they are doing great, give them an "exceeds", then move on to how they can improve their "areas of opportunity". 

4.  The combination of those competencies that create "jobs", are pretty inflexible in corporate America.

With that in mind, it should come as no shock that while we love to read books like "Now Discover Your Strengths" and nod accordingly when discussing, we pretty much go back to the coal mine and expect people to fit in the traditional spaces we've defined.

Scott McArthur recently talked about the power of positive, strength-based psychology in the workplace.  From the sweet rundown at McArthur's Rant:

"Positive psychology suggests that by focusing on people’s strengths rather than on their development needs we can transform wellness at work and as a consequence improve organizational performance.

The notion behind the work that is being done under the banner of Positive Psychology is to enhance our experiences of love, work and play and by doing so encourage wellbeing. This is in contrast to the traditional ways of thinking in both psychology and business where the focus is on finding what isn't working and trying to fix it.

Techniques such as Appreciative Enquiry and Strength finders (Gallup) as well as writers such as Csikszentmihalyi in Flow: The Psychology of Optimal Experience have been extolling the value of adopting this approach for some time. In Gallup’s case they have produced some strong statistical evidence that it works.."

Scott acknowledges in his post that while focusing on employee strengths is a powerful tool, it's problematic for the traditional organization to figure out how to do it.

Here's my take.  The power of focusing on strengths in corporate America is probably best used in a combination of performance management and engagement.  The smart managers know that they can't adjust a role to fit the employee's strengths with a 100% match.  But with the right amount of praise, coaching and organizational flexibility, they can create an environment where the employee understands that the more efficient they are in their formal job, the more they can chase what they really love to do, and maybe even innovate and create stuff on the way.

And that would be a pretty cool thing... 

Square Peg, Round Hole - Can The Traditional Organization Afford to Focus on Strengths?

Is performance management upside down in Corporate America?  Here are a couple of quick observations:

1.  Jobs are structured for the company, not the employee.  I'm not saying that's wrong, just outlining the facts.

2.  90% of the time we spend talking about performance is about how to manage negative variance.

3.  We don't spend a lot of the time evaluating how we can continue to maximize a person's strengths.  We'll tell them they are doing great, give them an "exceeds", then move on to how they can improve their "areas of opportunity". 

4.  The combination of those competencies that create "jobs", are pretty inflexible in corporate America.

With that in mind, it should come as no shock that while we love to read books like "Now Discover Your Strengths" and nod accordingly when discussing, we pretty much go back to the coal mine and expect people to fit in the traditional spaces we've defined.

Scott McArthur recently talked about the power of positive, strength-based psychology in the workplace.  From the sweet rundown at McArthur's Rant:

"Positive psychology suggests that by focusing on people’s strengths rather than on their development needs we can transform wellness at work and as a consequence improve organizational performance.

The notion behind the work that is being done under the banner of Positive Psychology is to enhance our experiences of love, work and play and by doing so encourage wellbeing. This is in contrast to the traditional ways of thinking in both psychology and business where the focus is on finding what isn't working and trying to fix it.

Techniques such as Appreciative Enquiry and Strength finders (Gallup) as well as writers such as Csikszentmihalyi in Flow: The Psychology of Optimal Experience have been extolling the value of adopting this approach for some time. In Gallup’s case they have produced some strong statistical evidence that it works.."

Scott acknowledges in his post that while focusing on employee strengths is a powerful tool, it's problematic for the traditional organization to figure out how to do it.

Here's my take.  The power of focusing on strengths in corporate America is probably best used in a combination of performance management and engagement.  The smart managers know that they can't adjust a role to fit the employee's strengths with a 100% match.  But with the right amount of praise, coaching and organizational flexibility, they can create an environment where the employee understands that the more efficient they are in their formal job, the more they can chase what they really love to do, and maybe even innovate and create stuff on the way.

And that would be a pretty cool thing... 

Is performance management upside down in Corporate America?  Here are a couple of quick observations:

1.  Jobs are structured for the company, not the employee.  I'm not saying that's wrong, just outlining the facts.

2.  90% of the time we spend talking about performance is about how to manage negative variance.

3.  We don't spend a lot of the time evaluating how we can continue to maximize a person's strengths.  We'll tell them they are doing great, give them an "exceeds", then move on to how they can improve their "areas of opportunity". 

4.  The combination of those competencies that create "jobs", are pretty inflexible in corporate America.

With that in mind, it should come as no shock that while we love to read books like "Now Discover Your Strengths" and nod accordingly when discussing, we pretty much go back to the coal mine and expect people to fit in the traditional spaces we've defined.

Scott McArthur recently talked about the power of positive, strength-based psychology in the workplace.  From the sweet rundown at McArthur's Rant:

"Positive psychology suggests that by focusing on people’s strengths rather than on their development needs we can transform wellness at work and as a consequence improve organizational performance.

The notion behind the work that is being done under the banner of Positive Psychology is to enhance our experiences of love, work and play and by doing so encourage wellbeing. This is in contrast to the traditional ways of thinking in both psychology and business where the focus is on finding what isn't working and trying to fix it.

Techniques such as Appreciative Enquiry and Strength finders (Gallup) as well as writers such as Csikszentmihalyi in Flow: The Psychology of Optimal Experience have been extolling the value of adopting this approach for some time. In Gallup’s case they have produced some strong statistical evidence that it works.."

Scott acknowledges in his post that while focusing on employee strengths is a powerful tool, it's problematic for the traditional organization to figure out how to do it.

Here's my take.  The power of focusing on strengths in corporate America is probably best used in a combination of performance management and engagement.  The smart managers know that they can't adjust a role to fit the employee's strengths with a 100% match.  But with the right amount of praise, coaching and organizational flexibility, they can create an environment where the employee understands that the more efficient they are in their formal job, the more they can chase what they really love to do, and maybe even innovate and create stuff on the way.

And that would be a pretty cool thing... 

Confused About Who's Engaged? Try This Handy Engagement Test to Sort It All Out...

My posts last week regarding the concept of engagement and subsequent research on the topic clarified a couple of things to me. 

-First, trying to get everyone to agree on a definition of engagment is harder than trying to get Britney Spears to settle down and work it all out with K-Fed.   

-Second, my take on the best way to have an engaged workforce is to a) ensure you hire talent that is already predisposed to be engaged, and b) figure out the best way to create an environment where "engagement fence straddlers" (those who might be engaged if placed in the right type of environment) elect to become engaged...

Of course, being the scientific, progressive manager you are, you want a way to baseline the current engagement level of your team before you start tinkering with the environment.   WOW - you are an achiever, and if I might add, an engaged one at that...

At the risk of being savagely attacked by the engagement community, here's my back of the napkin, "let's wing it" test to determine the engagment level of your current team:

1.  Tell your team that if they can find a way to get their current workload complete in less time, you would like to support the use of 4 hours per week at work to pursue any work-related, professional development project that interests them.  The only rules are that the project has to be work-related and potentially have a payoff to the business - but if the process leads to them developing new skills that adds value to them as professionals, so be it.

2.  Answer your team's questions about what is appropriate related to the project.  You might also get questions about how you will measure whether their current workload is being maintained.  Answer all questions to the best of your ability, without telling them how to do it.

3.  Once you've answered all the questions, don't do anything for 3 weeks.

4.  At the 3 week mark, check back in with everyone on your team in brief 1-on-1 sessions.  Have they started the project time?  What are they working on?

Here's how to score your findings:

-Associates who have taken advantage of your offer and are aggresively moving forward with a project - ENGAGED

-Associates who have developed some thoughts about what they might do, but have not taken action yet - NOT ENGAGED, BUT POSSIBLY COULD BECOME ENGAGED WITH THE RIGHT ENVIRONMENTAL TWEAKS FROM YOU

-Associates who have done nothing, or have excuses for why they didn't take advantage of the offer - NOT ENGAGED AND NOT PROBABLE TO BECOME ENGAGED, regardless of your efforts.

Remember, this is only a test, and an informal one at that.  You might actually have to start being engaged yourself to create the environment where your direct reports are engaged.  One of the things I learned from the engagement community is that according to Gallup, on average, 29% of employees are engaged and 71% are either unengaged (neutral) or disengaged (opposed).

PS - my take on this as a nice informal test of engagement is based on the engagement traits listed in this post...

How many members of your team would you expect to take the offer and run with it? 

Just as important - Would you? 

My posts last week regarding the concept of engagement and subsequent research on the topic clarified a couple of things to me. 

-First, trying to get everyone to agree on a definition of engagment is harder than trying to get Britney Spears to settle down and work it all out with K-Fed.   

-Second, my take on the best way to have an engaged workforce is to a) ensure you hire talent that is already predisposed to be engaged, and b) figure out the best way to create an environment where "engagement fence straddlers" (those who might be engaged if placed in the right type of environment) elect to become engaged...

Of course, being the scientific, progressive manager you are, you want a way to baseline the current engagement level of your team before you start tinkering with the environment.   WOW - you are an achiever, and if I might add, an engaged one at that...

At the risk of being savagely attacked by the engagement community, here's my back of the napkin, "let's wing it" test to determine the engagment level of your current team:

1.  Tell your team that if they can find a way to get their current workload complete in less time, you would like to support the use of 4 hours per week at work to pursue any work-related, professional development project that interests them.  The only rules are that the project has to be work-related and potentially have a payoff to the business - but if the process leads to them developing new skills that adds value to them as professionals, so be it.

2.  Answer your team's questions about what is appropriate related to the project.  You might also get questions about how you will measure whether their current workload is being maintained.  Answer all questions to the best of your ability, without telling them how to do it.

3.  Once you've answered all the questions, don't do anything for 3 weeks.

4.  At the 3 week mark, check back in with everyone on your team in brief 1-on-1 sessions.  Have they started the project time?  What are they working on?

Here's how to score your findings:

-Associates who have taken advantage of your offer and are aggresively moving forward with a project - ENGAGED

-Associates who have developed some thoughts about what they might do, but have not taken action yet - NOT ENGAGED, BUT POSSIBLY COULD BECOME ENGAGED WITH THE RIGHT ENVIRONMENTAL TWEAKS FROM YOU

-Associates who have done nothing, or have excuses for why they didn't take advantage of the offer - NOT ENGAGED AND NOT PROBABLE TO BECOME ENGAGED, regardless of your efforts.

Remember, this is only a test, and an informal one at that.  You might actually have to start being engaged yourself to create the environment where your direct reports are engaged.  One of the things I learned from the engagement community is that according to Gallup, on average, 29% of employees are engaged and 71% are either unengaged (neutral) or disengaged (opposed).

PS - my take on this as a nice informal test of engagement is based on the engagement traits listed in this post...

How many members of your team would you expect to take the offer and run with it? 

Just as important - Would you? 

I Just Tried to Define Employee Engagement - Now I Need a Nap...

I thought a follow-up post was needed regarding "The Key to Employee Engagement - Don't Hire Clock Watchers". 

Point #1 - I obviously stirred up a hornet's nest by talking about engagement without trying to define it for the syndicated audience (note - you can have one reader on feedburner and call it syndicated - cool!); 

Point #2 - I browsed around looking to define employee engagement, and as a result;

Point #3 - I now need a nap. 

WOW!  Was that some painful reading.  Not since a Fortune 500 corporate team I was on in the 90's came together to deal with the OFCCP required, "Definition of an Applicant", have so many said so much, yet so little.

zzzzzzz....zzzzzzzz.....zzzzzzz

OK, I'm back.   Lucky for me, one of the emails I received was from a guy who actually understands the different definitions.  His name is Tim Wright, of Wright Results (aptly named).  Tim's spent enough time thinking about engagement that he can actually compare and contrast engagement theories.   Spend 10 minutes googling "employee engagement" and you'll understand why that's significant.

For a great rundown of employee engagement theories, hit Tim's blog here.

I had two favorite definitions from Tim's post.  The Gallup G12, and Tim's own definition of engagement. 

Here's the Gallup G12, which lists traits of engaged employees:

• Consistent levels of high performance.
• Natural innovation and drive for efficiency.
• Intentional building of supportive relationships.
• Clear about the desired outcomes of their role.
• Emotionally committed to what they do.
• Challenge purpose to achieve goals.
• High energy and enthusiasm.
• Never run out of things to do, create positive things to act on.
• Broaden what they do and build on it.
• Commitment to company, work group, and role.

Here's Tim Wright's definition:

The individual’s investment of energy, skill, ability, and eagerness in the work performed. Engagement includes “involvement” and “commitment” yet goes beyond to include observable behaviors such as:

• Attention to task detail
• Commitment to assignment completion
• Involvement in special projects
• Communication willingly, effectively with others
• Demonstration of personal/professional improvement
• Initiation of problem-solving and/or conflict resolution
• Innovation regarding processes and procedures

I bolded the characteristics that closely matched my (cough) unscientific definition.  In any event, these two trait-based definitions were, by far, better than anything else I found.

Hit Tim's web site to learn more.  He's apparently pursuing a practice revolving around employee engagement, which makes him a) brilliant, b) a masochist, or c) both.

Check it out and answer that question for yourself....

I thought a follow-up post was needed regarding "The Key to Employee Engagement - Don't Hire Clock Watchers". 

Point #1 - I obviously stirred up a hornet's nest by talking about engagement without trying to define it for the syndicated audience (note - you can have one reader on feedburner and call it syndicated - cool!); 

Point #2 - I browsed around looking to define employee engagement, and as a result;

Point #3 - I now need a nap. 

WOW!  Was that some painful reading.  Not since a Fortune 500 corporate team I was on in the 90's came together to deal with the OFCCP required, "Definition of an Applicant", have so many said so much, yet so little.

zzzzzzz....zzzzzzzz.....zzzzzzz

OK, I'm back.   Lucky for me, one of the emails I received was from a guy who actually understands the different definitions.  His name is Tim Wright, of Wright Results (aptly named).  Tim's spent enough time thinking about engagement that he can actually compare and contrast engagement theories.   Spend 10 minutes googling "employee engagement" and you'll understand why that's significant.

For a great rundown of employee engagement theories, hit Tim's blog here.

I had two favorite definitions from Tim's post.  The Gallup G12, and Tim's own definition of engagement. 

Here's the Gallup G12, which lists traits of engaged employees:

• Consistent levels of high performance.
• Natural innovation and drive for efficiency.
• Intentional building of supportive relationships.
• Clear about the desired outcomes of their role.
• Emotionally committed to what they do.
• Challenge purpose to achieve goals.
• High energy and enthusiasm.
• Never run out of things to do, create positive things to act on.
• Broaden what they do and build on it.
• Commitment to company, work group, and role.

Here's Tim Wright's definition:

The individual’s investment of energy, skill, ability, and eagerness in the work performed. Engagement includes “involvement” and “commitment” yet goes beyond to include observable behaviors such as:

• Attention to task detail
• Commitment to assignment completion
• Involvement in special projects
• Communication willingly, effectively with others
• Demonstration of personal/professional improvement
• Initiation of problem-solving and/or conflict resolution
• Innovation regarding processes and procedures

I bolded the characteristics that closely matched my (cough) unscientific definition.  In any event, these two trait-based definitions were, by far, better than anything else I found.

Hit Tim's web site to learn more.  He's apparently pursuing a practice revolving around employee engagement, which makes him a) brilliant, b) a masochist, or c) both.

Check it out and answer that question for yourself....

The Key to Employee Engagement - Don't Hire Clock Watchers

I've been accused by others of being a workaholic.  Need proof?  Check out the comments to my past post on the wisdom of using an Out-Of-Office reply, where I was taken to task by those appalled that I dared to work on my blackberry while standing in a 60-minute line at Disney.   Trust me, peeps, standing in line at Disney isn't quality time with the nuclear family.  It's a taxing whinefest we would all be well advised to ignore through advanced technology.

More important to the question of my work habits, and yours, is the question of engagment.  Seth Godin penned a piece a few days ago that I thought was brilliant.   The thesis is that being a workaholic isn't defined by hours, but rather by attitude:

"A workaholic lives on fear. It's fear that drives him to show up all the time. The best defense, apparently, is a good attendance record.

A new class of jobs (and workers) is creating a different sort of worker, though. This is the person who works out of passion and curiosity, not fear.

The passionate worker doesn't show up because she's afraid of getting in trouble, she shows up because it's a hobby that pays. The passionate worker is busy blogging on vacation... because posting that thought and seeing the feedback it generates is actually more fun than sitting on the beach for another hour. The passionate worker tweaks a site design after dinner because, hey, it's a lot more fun than watching TV.

It was hard to imagine someone being passionate about mining coal or scrubbing dishes. But the new face of work, at least for some people, opens up the possibility that work is the thing (much of the time) that you'd most like to do. Designing jobs like that is obviously smart. Finding one is brilliant."

We should all be fortunate enough to be so engaged in our jobs/careers that we actively seek opportunties to learn, regardless of time/location. 

This blog is a good example of working with curiosity.  Do I have to do it?  Nope.  Do I want to do it?  Absolutely, especially when I get reactions and thoughts from others I can learn from as a result.  That's where the power of engagement really comes into play.  It makes you want to work on the craft, and go back for more.

I know people who naturally bring that passion to their work.  I know another group of people who are rigid about the hours they work.  The interesting thing is that few of the individuals who are rigid about their hours are passionate about their work. 

Can people who watch the clock be engaged employees?  Or is engagement an intrinsic quality that some people have and others don't?

My take?  The naturally curious are always more apt to dream and be engaged, regardless of the job.  The rest of the crowd better work OT to find a job that matches their strengths, because if not placed in a perfect situation, they'll become clock watchers.

And once that happens, there's little that the employer can do to change engagement levels.

Look inward, clock watchers of America. 

I've been accused by others of being a workaholic.  Need proof?  Check out the comments to my past post on the wisdom of using an Out-Of-Office reply, where I was taken to task by those appalled that I dared to work on my blackberry while standing in a 60-minute line at Disney.   Trust me, peeps, standing in line at Disney isn't quality time with the nuclear family.  It's a taxing whinefest we would all be well advised to ignore through advanced technology.

More important to the question of my work habits, and yours, is the question of engagment.  Seth Godin penned a piece a few days ago that I thought was brilliant.   The thesis is that being a workaholic isn't defined by hours, but rather by attitude:

"A workaholic lives on fear. It's fear that drives him to show up all the time. The best defense, apparently, is a good attendance record.

A new class of jobs (and workers) is creating a different sort of worker, though. This is the person who works out of passion and curiosity, not fear.

The passionate worker doesn't show up because she's afraid of getting in trouble, she shows up because it's a hobby that pays. The passionate worker is busy blogging on vacation... because posting that thought and seeing the feedback it generates is actually more fun than sitting on the beach for another hour. The passionate worker tweaks a site design after dinner because, hey, it's a lot more fun than watching TV.

It was hard to imagine someone being passionate about mining coal or scrubbing dishes. But the new face of work, at least for some people, opens up the possibility that work is the thing (much of the time) that you'd most like to do. Designing jobs like that is obviously smart. Finding one is brilliant."

We should all be fortunate enough to be so engaged in our jobs/careers that we actively seek opportunties to learn, regardless of time/location. 

This blog is a good example of working with curiosity.  Do I have to do it?  Nope.  Do I want to do it?  Absolutely, especially when I get reactions and thoughts from others I can learn from as a result.  That's where the power of engagement really comes into play.  It makes you want to work on the craft, and go back for more.

I know people who naturally bring that passion to their work.  I know another group of people who are rigid about the hours they work.  The interesting thing is that few of the individuals who are rigid about their hours are passionate about their work. 

Can people who watch the clock be engaged employees?  Or is engagement an intrinsic quality that some people have and others don't?

My take?  The naturally curious are always more apt to dream and be engaged, regardless of the job.  The rest of the crowd better work OT to find a job that matches their strengths, because if not placed in a perfect situation, they'll become clock watchers.

And once that happens, there's little that the employer can do to change engagement levels.

Look inward, clock watchers of America. 

"A workaholic lives on fear. It's fear that drives him to show up all the time. The best defense, apparently, is a good attendance record.

A new class of jobs (and workers) is creating a different sort of worker, though. This is the person who works out of passion and curiosity, not fear.

The passionate worker doesn't show up because she's afraid of getting in trouble, she shows up because it's a hobby that pays. The passionate worker is busy blogging on vacation... because posting that thought and seeing the feedback it generates is actually more fun than sitting on the beach for another hour. The passionate worker tweaks a site design after dinner because, hey, it's a lot more fun than watching TV.

It was hard to imagine someone being passionate about mining coal or scrubbing dishes. But the new face of work, at least for some people, opens up the possibility that work is the thing (much of the time) that you'd most like to do. Designing jobs like that is obviously smart. Finding one is brilliant."

Comparison of 100K Jobs in Organizations.....

Budget season is pretty much past us at this point, which means headcount budgets are set for 2008.  Of course, that doesn't mean the need for staffing justification is final.  Some organizations cut new headcount to zero as part of the budget process, and some organizations allow business units to layer in additional headcount, then vigorously track revenue to determine if the new headcount will be hired in the upcoming year.

Make your revenue early in the year, and maybe you'll get to hire the additional headcount.  Struggle and chances are the new talent isn't going to be joining the organization.

One additional exercise used, when needed in headcount discussions, is the creation of staffing metrics.  Customers per Customer Service Rep, Revenue per FTE - you name it, there's a staffing metric that can be created.  Some are useful, some aren't - it's all in the context.

Here one you may or may have not seen - comparison of the raw number of 100K jobs in your organization compared to similar organizations.  Organizations routinely take a look at this simple metric to determine if they're top heavy or not.   Of course, the number itself really doesn't tell you a lot - you've got to have some type of comparison with other organizations (or divisions in the same company) to make it mean anything.

Here's an example.  In my hometown, a new mayor is comparing the Birmingham School Systems to other school systems regarding this metric.  From a Birmingham news editorial on the results of the analysis:

"Look around the area, and it's plain to see that Birmingham taxpayers pay a premium for the top administrators in their school system.

That's especially true when you have an assistant principal making more than the principal at the same school. Also, when the school system has 22 employees, most of those in the central office, making more than $100,000 a year while at Jefferson County, which has 8,000 more students, only half that many administrators make $100,000-plus. Mobile County, the state's largest school system with 65,000 students (almost 2X as many as the Birmingham City District), has just 12 administrators making more than $100,000 a year."

When you see this type of analysis, it's clear which side you want to be on - the lean side. 

Just like analysis of CEO pay, the raw number of highly compensated individuals in an organization is an emotional topic.  More importantly, since it deals with multiple positions, it's a barometer of how efficient an organization is compared to its peers.

Of course, the time to control what the Birmingham school system is experiencing is before the additonal group of highly compensated indviduals is hired.  At that point, it's voluntary.   Later, it usually becomes involuntary.

Budget season is pretty much past us at this point, which means headcount budgets are set for 2008.  Of course, that doesn't mean the need for staffing justification is final.  Some organizations cut new headcount to zero as part of the budget process, and some organizations allow business units to layer in additional headcount, then vigorously track revenue to determine if the new headcount will be hired in the upcoming year.

Make your revenue early in the year, and maybe you'll get to hire the additional headcount.  Struggle and chances are the new talent isn't going to be joining the organization.

One additional exercise used, when needed in headcount discussions, is the creation of staffing metrics.  Customers per Customer Service Rep, Revenue per FTE - you name it, there's a staffing metric that can be created.  Some are useful, some aren't - it's all in the context.

Here one you may or may have not seen - comparison of the raw number of 100K jobs in your organization compared to similar organizations.  Organizations routinely take a look at this simple metric to determine if they're top heavy or not.   Of course, the number itself really doesn't tell you a lot - you've got to have some type of comparison with other organizations (or divisions in the same company) to make it mean anything.

Here's an example.  In my hometown, a new mayor is comparing the Birmingham School Systems to other school systems regarding this metric.  From a Birmingham news editorial on the results of the analysis:

"Look around the area, and it's plain to see that Birmingham taxpayers pay a premium for the top administrators in their school system.

That's especially true when you have an assistant principal making more than the principal at the same school. Also, when the school system has 22 employees, most of those in the central office, making more than $100,000 a year while at Jefferson County, which has 8,000 more students, only half that many administrators make $100,000-plus. Mobile County, the state's largest school system with 65,000 students (almost 2X as many as the Birmingham City District), has just 12 administrators making more than $100,000 a year."

When you see this type of analysis, it's clear which side you want to be on - the lean side. 

Just like analysis of CEO pay, the raw number of highly compensated individuals in an organization is an emotional topic.  More importantly, since it deals with multiple positions, it's a barometer of how efficient an organization is compared to its peers.

Of course, the time to control what the Birmingham school system is experiencing is before the additonal group of highly compensated indviduals is hired.  At that point, it's voluntary.   Later, it usually becomes involuntary.

Performance Management at Microsoft - Moving from 5-point to 3-point Rating Scale

It's been awhile since I waxed about the limitations of the performance management systems most of us use in our companies.  Probably my biggest pet peeve is the 5 point rating scale, where managers invariably use a combination of 3's and 4's to bail themselves out of tough conversations with average employees (click through on the link to get my take). 

I like the 3-point scale better.  With that in mind, it was good to see Microsoft featured in the most recent print edition of Workforce Managment as having ripped out their 5-point rating scale and installed a 3-point scale.  From the article:

"Under that old system, Microsoft managers assigned current performance ratings of 0 to 5 in half-point increments based on a forced distribution.  Because current performance ratings not only determine annual salary increases but also come in to play when employees apply for another position with the company, the forced distribution approach was a sore spot.

"We also discovered the old system was not fully effective", Ritchie (Microsoft GM for Performance Management) notes.  Consequently, Microsoft trashed its 0 to 5 rating scale and adopted a three point "commitment" scale of "exceeded", "achieved" and "underperformed" with no forced distribution.

"Distribution under the new system is about what we expected," Richie reports.  In the last full cycle, 37 percent of employees received a rating of "exceeded", 58% received a rating of "achieved" and 5 percent were rated "underperformed".  The general rule is that the top group receives a merit increase that is 50% higher than average performers."

Of course, your problems don't end just because you move from a 5-point to 3-point scale.  You still have to have managers that can communicate the difference between a "meets" and an "exceeds", and the distribution of overall ratings can still be an issue. 

But you are taking the "Sometimes Exceeds" crutch away by moving to a 3-point scale, and that's worth the effort alone.

It's been awhile since I waxed about the limitations of the performance management systems most of us use in our companies.  Probably my biggest pet peeve is the 5 point rating scale, where managers invariably use a combination of 3's and 4's to bail themselves out of tough conversations with average employees (click through on the link to get my take). 

I like the 3-point scale better.  With that in mind, it was good to see Microsoft featured in the most recent print edition of Workforce Managment as having ripped out their 5-point rating scale and installed a 3-point scale.  From the article:

"Under that old system, Microsoft managers assigned current performance ratings of 0 to 5 in half-point increments based on a forced distribution.  Because current performance ratings not only determine annual salary increases but also come in to play when employees apply for another position with the company, the forced distribution approach was a sore spot.

"We also discovered the old system was not fully effective", Ritchie (Microsoft GM for Performance Management) notes.  Consequently, Microsoft trashed its 0 to 5 rating scale and adopted a three point "commitment" scale of "exceeded", "achieved" and "underperformed" with no forced distribution.

"Distribution under the new system is about what we expected," Richie reports.  In the last full cycle, 37 percent of employees received a rating of "exceeded", 58% received a rating of "achieved" and 5 percent were rated "underperformed".  The general rule is that the top group receives a merit increase that is 50% higher than average performers."

Of course, your problems don't end just because you move from a 5-point to 3-point scale.  You still have to have managers that can communicate the difference between a "meets" and an "exceeds", and the distribution of overall ratings can still be an issue. 

But you are taking the "Sometimes Exceeds" crutch away by moving to a 3-point scale, and that's worth the effort alone.