Don’t (automatically) blame the performance appraisal

“We’re thinking about ditching performance appraisals” said Bill.  He was the CEO, I was sitting down with him and Theo his GM of HR.  “Or at least revamping the whole thing.”

“Run me through it” I prompted.  “What are you seeing that makes you think they aren’t working?”

Theo answered; “Formal feedback and anecdotal evidence.  We put out some simple questions, namely, to each employee; ‘I find the performance appraisal process to be useful to me in my work’, and to each manager ‘I find the performance appraisal process helps me to make my people more valuable’.  Both with the usual 5-point system between ‘not at all’ and ‘absolutely’.”

“What did you get?”

Bill jumped in; “We struggled to get to 3….which meant ‘somewhat’.  Mostly got 1s and 2s which means ‘not at all’ or ‘barely’ some value.”

“So as you can see…” Theo continued…”the system that my area leads isn’t too flash!”

“Maybe not” I answered. “But there’s a fair chance you’re looking at a symptom here, not a cause.”

“How can perform appraisals not working be a symptom?” asked Theo.  “A symptom of what?”

“Ineffective organisational design.” Read more…

Are you doing real OD work?

Maria was GM People & Culture and we were discussing the organisational development work her area was delivering over the next three years.

“OK, I’ll bite.  So what is ‘the organisation’ Maria asked.

“Try this on for size” I answered.  “The organisation is made up of the principles and practices in play that determine who gets to work here, and how they are expected to work together'”.

Maria was silent for some time.  After a while she looked up:

“I’m not sure what you mean”.

“Another angle” I replied.  “The organisation is the internal rules of the game on how people are supposed to work together, whether explicit or otherwise.”

“What sort of rules” Maria asked.

“Things like how you determine how many organisational layers are needed, who gets to make decisions about what, how processes are run, what minimal practices are expected from every manager and/or team, how people are expected to work out issues of priority, and so on.  But what we’re talking about fundamentally is your concept of what needs to be in place in a healthy organisation such that anyone who has the capability, is willing to learn and can get along with others will be able to deliver results.”

“My concept?”

“Yep, your concept, your underlying theory of your organisation, your basis for comparison should any organisational issues arise.” I said.

“And not the people themselves?”

“The organisation that the people are effectively dropped into”.

“Sounds impersonal to me.  Taking the ‘H’ out of ‘HR'”

“You’re seeing ‘impersonal’ and ‘caring’ as opposites, but that’s not the case.  Adjusting the temperature of a room to make it comfortable is not a ‘personal’ act, but it looks after people.  The same applies to working on the internal ‘rules of the game’ to make sure that they are allowing people use their capability in the direction of the organisation.   OD needs to stop doing the equivalent of teaching people how to not shiver in a cold room, when the real issue is a broken heater”.

Ultimately who is accountable for each of your areas being efficient?

Danni was General Manager Operations in a 1400-person organisation with about 600 people under her umbrella.   The new Board had made it clear they required a renewed focussed on ‘efficiency and effectiveness’.

“OK” Danni continued, “so I’m accountable that the work of my various areas is effective, meaning creates value for the organisation, and my Senior Managers are accountable that it’s done efficiently”.

“Nearly” I replied.

“Only nearly?” Danni laughed.  “I thought I was getting somewhere!”

“We are” I continued.  “But remember from the workshop last week, what is each manager accountable for?”

“The results of their people”.

“Which means ultimately who is accountable for each of your areas being efficient?”

“Well I guess that means me.  But now I’m confused”.

“Fair enough!” I agreed.  “But hang with me.  The work of each of your Senior Managers is to make their areas run more efficiently.  As in achieve a better outputs to inputs ratio.  And work is about making decisions to reach an outcome.  So your Senior Managers are paid to identify then choose a pathway that will see the outcome of a more efficient operation achieved”.

“Go on…..” Danni said, nodding slowly.

“But…..how much of an improvement in efficiency is considered to be a good job…..the result they are expected to achieve…..that’s your call”.

“Why my call?”

“Because you are…..” I began.  Danni smiled and joined in….”accountable for the results of my people“.

Which ‘e’ word are General Managers accountable for?

Danni was General Manager Operations in a 1400-person organisation with about 600 people under her umbrella.   The new Board had made it clear they required a renewed focussed on ‘efficiency and effectiveness’.

“So which one do you hold your Senior Managers accountable for?” I asked.  “Efficiency or effectiveness?”

“Well both!” she answered.  “It’s not enough that they just do things right, they need to make sure they are doing the right things”.

“And who decides what the right things are?”

“What do you mean?” Danni asked, her brow furrowing.

“Well….let say one of your Senior Managers asks to invest $150k in improvement consultants for a six month project that will deliver a three-year payback of $1.5 million.”

“Sounds good to me.  Approved!” she smiled.

“Hang on a tick….what if the service that is being improved is one that we would call, using Drucker’s words, ‘yesterday’s breadwinner’.”

“Well, $1.35 million over three years sounds pretty good”.  Danni was fast with numbers.

“True” I agreed. “But what if those improvements required most of the people who are involved in that  series of projects you were telling me about to find tomorrow’s breadwinners?”

“Well….that would be a genuine strategic decision.  Classic resource allocation.  What’s  savings of $500k each year compared to the value of new products?”

“Would you let your Senior Managers make this decision?” I asked.

“Nope.   I’d get their inputs, hear their disagreements.  But the final call – that’s what I’m paid for.”

“And which ‘e’ word are we talking about now”.

“Effectiveness”  said Danni with a confident nod.  “General Managers make decisions about what are the right things to do.”

“Which means….”

Danni had it:  “Senior Managers make decisions that make sure we do it right”.

Which one do you hold your Senior Managers accountable for?

Danni was General Manager Operations in a 1400-person organisation with about 600 people under her umbrella.   The new Board had made it clear they required a renewed focussed on ‘efficiency and effectiveness’.

“What does that mean” I asked.

“You know, do more with less, headcount, that sort of thing” she answered.

“So what sort of stuff will you be doing”?

“Well everyone is talking the usual suspects.  LEAN, Six Sigma, process maps….I can see a lot of boxes and arrows in my future”.

“That sounds like efficiency to me” I continued.  Where’s the effectiveness?”.

“Well I like the traditional definitions.  Efficiency is doing things right, and effectiveness is doing the right things”.

“So which one do you hold your Senior Managers accountable for?”

Why is HR advice optional but the system isn’t?

“What’s the difference between advice your HR person David offers your managers on raising staff engagement compared to the systems and practices he has set up to help them with it”?  We were getting close, I needed to press Jason on this.

He frowned with concentration.

“Well…lets start with what they have in common” he began.  “Both are designed to help them in doing their natural role as managers, which is to build a team that’s engaged”

“Yep.”

“But while I don’t expect them to follow every bit of advice David gives them, I do expect them to follow the systems and practices David set up”.

“Yep.  So what’s the difference? Why is one optional, and the other one isn’t”

“I actually don’t know!” he said with surprise.

“Let me ask you this.  When David set up the systems and processes to help raise engagement….did you look at them?”

“Of course I did.  David was new at the time.  He didn’t know our industry yet, he didn’t know us.  He did a great job with what he was able to learn, then we all provided input.”

“Who signed off that that it would be a good system  for your business to raise engagement?”

“In the end, I did.  I’m the one on the hook for the engagement levels in the whole business.”

I stayed silent.  Jason looked up.

“The staff engagement practices…. it’s not David’s expectation that they’re followed.  It’s mine.  That’s the difference”.

So what happens if your managers don’t want to follow the staff engagement system?

Jason had decided that it was  his managers that were accountable for lifting the level of staff engagement, not David his HR guy.  He had also decided that if his managers didn’t want to take David’s advice (David being an expert in this area), then that was fine with him.  David was still accountable for offering his advice, or giving it if asked, just not for whether his advice was followed.

Sounded nice.  But I had a couple more questions.

“When we were talking about what leads to staff engagement last week” I began, “we agreed it wasn’t just individual actions of managers, it was also related to the systems and processes your managers work in”.

“Mmm hmmm” Jason offered, a smile starting.

“And you said it was David who put together these systems and processes”.

“Mmm hmmm”.  The smile continued.

“And you just said that if your managers don’t listen to David’s advice on staff engagement, then that’s fine with you because it’s not him that’s ultimately accountable, it’s the managers”.

“Mmm Hmmm”.  The smile dropped a little.

“So what happens if your managers don’t follow David’s system?”

The smile disappeared.

What happens if they ask for help and then don’t do what HR suggests?

“So where are we at?” I asked Jason.

“Well, first, I’m going to make my line managers accountable for lifting the level of staff engagement rather than David my HR guy”.

“Makes sense” I replied.  “So what’s David going to be accountable for?”

Jason smiled.  “I think I’ve figured this one out.  David’s accountable for helping them lift their staff engagement.  I want him to be their expert, their consultant, their coach.”

“That makes sense too” I nodded.  “Now let me ask you this…what happens if they ask for help and then don’t do what David suggests?”

Jason frowned.  “Well, they have to.  David’s an expert”.

“But he’s not an expert in what they’re trying to produce.  He can’t be expected to be aware of all the issues in the area that are being dealt with.  There might be a perfectly good reason why they might not listen to him.  What do you do then?”

Jason rubbed his forehead.  “Give me a minute”.  I waited patiently.  Twenty seconds passed, then he suddenly  looked up with a smile.  “Nothing!”, he exclaimed.

“Nothing?”

“Nothing!” repeated Jason.  “If the managers don’t want or aren’t able to take David’s advice on staff engagement, then that’s their issue.  They know it’s their job to get the level up. I’ve given them the resource in David, but in the end, if they don’t need him, then there’s other things David can do that will be valuable.”

“Sounds like you’ve got a clear idea of how you want this cross-functional relationship to work.  Who’s accountable for what, and who can ask who for help”.

“Yep” said Jason.  “And I know what you’re going to say next.  I need to get them together and explain how I see it, get any input, then unless I hear something that changes my mind….implement it”.

“Nearly.  Just a couple more questions”

So if David my HR guy isn’t accountable for the engagement of my people….

“OK….”  Jason was thinking this through.  “So if David my HR guy isn’t accountable for the engagement of my people because their managers are…..”

I raised my eyebrows and nodded to keep the thoughts coming.

“….then what do I need David for?”.

“Good question” I replied.  “Not as in ‘good rhetorical question’, but genuinely….good question.  So what’s the answer…why do you need David?”.

“Well like I said, I want David to create an environment where staff are engaged.  But we’ve just said he can’t do that because he’s not accountable for the people he needs to get engaged.”

I nodded.  “True.  So answer this for me….are your managers in their jobs because they are specialists in staff engagement?”

“Well maybe Max”  Jason responded.  “He’s always been able to get a group of people switched on.  But as for Jenny and Kristy, Jenny’s there because she knows exactly how to set up a sales team and drive performance, and Kristy has always been great at the technical knowledge which works because her team is about quality and resolution”.

“So tell me this….if you inform Jenny and Kristy that you’re expecting a 15% bump in engagement next time the staff survey is run….how are they going to react”.

“I’ve chatted to them before about this.  They both feel that they’ve maxed out given the nature of their teams and their other goals.”

“So if you’re serious about raising staff engagement, and if they’re the ones accountable for it…..they’re going to need some help?”  I nodded along with Jason…”Would you happen to know anyone?”

Jason smiled.  “I think it’s about time I reintroduced them to their new best friend….David”.

So if a given person isn’t engaged…..who’s problem is it really?

“I’m getting concerned about my HR guy, he’s just not getting any movement on our staff engagement no matter how hard he’s trying”.  Jason was worried.

“What are you not seeing?” I asked.

“Engagement!”  He replied.  “Interested people.   People actually wanting to work here.  Work harder.  You know, just be into it”.

“And who do you hold accountable for that?”

Jason didn’t appreciate the circle.  “David” he said.  Slowly.  “My. H. R. guy.  Because the ‘H’ stands for ‘human'”.

“Got it.” I replied.  “So these people who are not engaged the way you want them to be…who are their managers”?

Jason didn’t hesitate: “There’s three managers.  Jenny, Max and Kristy”.

“And what were we saying is the accountability of each manager?”

I could see a change starting.  “We said managers are accountable for the results of their people and how well they work together”.

“So if a given person isn’t engaged…..who’s problem is it really?”