Transforming Performance Reviews

Peter Bregman wrote another great article that I just came across, Stop Worrying about Your Weaknesses, which prompted me to think about performance reviews. So often, especially in small to mid-size businesses, performance reviews are treated as a necessary evil. Many businesses don’t invest in a formal review process. The owner/manager knows they need to be handled, but they resist them because they take both preparation time, and time out of their days. Employees often consider them a waste of time, or worse. As Peter points out in his excellent post, the conversations that take place in a performance review often focus on the employee’s perceived weaknesses. Peter states, “you won’t fix his weakness. You’ll just reinforce it.”

Performance reviews done poorly are costing companies their talent. The focus on weaknesses leads to  “The Vicious Circle of Turnover,” wherein a  manager focuses on fixing what they perceive is wrong with their people, until that is all they can see. Turnover is costly, and smart managers know the value of retaining their top talent.

A great manager recognizes the strengths of their people, and then puts them in position to win. A performance review serves the company better if it is less a report card, and more of a coaching session. The manager should focus on providing the necessary resources to the employee, and removing the obstacles so that the employee can win. Given that the employee is in the right position, it is often the manager that is the obstacle to success. An analogy I like to use centers on the Arizona Cardinals. In 2001, the Cardinals selected offensive lineman Leonard Davis, nicknamed “Bigg”, with the second overall pick in the NFL draft. Davis was moved around on the line during the course of his career with Arizona, settling in as the left tackle his last three years. When he became a free agent after his 6th season, he was picked up by Dallas and Coach Bill Parcells, noted for being a great judge of talent. Parcells moved Davis back to his “natural” position at right guard, where he promptly became a Pro Bowl selection.

How do you transform the performance review process, so that it is an enriching experience designed to, dare I say, capitalize on their strengths? I recommend that our clients use the ProScan at least annually with all of their employees, as part of the review process. When properly utilized, the ProScan report provides a structured conversation that reveals the employee’s strengths and natural talents, along with the obstacles that are in their way. The manager has a timely snapshot of the behavioral adjustments the employee is making in response to the stresses they are experiencing, enabling an action plan to address those circumstances. Finally, the Motivation Worksheet provides for a rich conversation about what is most important to that individual, now. A great manager will use that conversation to empower and support their people in fulfilling on their dreams.

The typical performance review today focuses far too much on what is wrong with the employee. Attempts at fixing and changing others rarely succeed. Most of us struggle when we try to change our own behavior, let alone that of someone else. Today’s great managers understand this, and know their success is dependent on putting their employees in position to win. If you are interested in transforming your performance review process from one you and your people resist, to one you can relish, the ProScan provides a great path to performance review enlightenment.

The Vicious Circle of Turnover

“Square pegs don’t fit into round holes, but managers keep pounding away at their people, until something breaks. Then they hire someone new, and start all over again.”

Does this sound familiar to you? Most of us have been that square peg at some point in our careers. Some of us have also been the manager in this scenario. However you relate to it, it is a scenario that plays out all too often in businesses both large and small. Someone is hired who isn’t a fit for the position. All the manager can see is what’s wrong with this employee, and proceeds to try to fix and change them. Eventually, the employee leaves, either voluntarily or involuntarily, because they weren’t a fit for the position to begin with. Over time, this takes a toll on the organization. As the poor hiring continues, the manager already knows that the chances of the new hire sticking around and being successful are nil, so why bother investing your blood sweat and tears in developing someone who won’t make it anyway?

This is the Vicious Circle of Turnover. It is more extreme in some industries and businesses than in others, but the signs are obvious: high turnover and resignation about solving the problem. Why would a business resign itself to operate in this manner? There are three reasons I’ll explore here. The first two are related. Number one is that the business doesn’t understand the true cost of their turnover. The second, which follows naturally from the first, is that they simply don’t value their people. For these businesses, people are disposable, a dime a dozen, so to speak. If it only costs $400 to replace that salesperson, why not just hire them en masse, provide a couple days of training, and see who sticks to the wall? Hard to believe? I’ve actually worked for a company who operates in this exact manner. The salespeople who have been around resent the new people, and treat them as though they won’t last. The new salespeople don’t like the working environment, and move on if they aren’t finding sufficient fulfillment in other aspects of the job. The management makes it clear that if you don’t like it, you’re free to move on.

So what is the true cost of turnover? Others have covered that ground in depth. If you want a full and detailed picture of the actual costs, just do a search of “employee turnover costs” on Google, and you will be stunned by the information and statistics available. I usually quote that a bad hire in a $10/hour position will cost a business around $5000.  Suffice it to say, it is far more costly than most businesses estimate, in both dollars and morale.

This leads to the third reason why businesses continue to operate in this manner. They don’t know how to break the cycle. Many businesses with enlightened leadership who truly value their people as human capital still suffer from the Vicious Circle of Turnover. It’s likely a nicer version than the one I described above, but it is no less costly. It only takes one or two bad hires to get the cycle going, and once you’re in it, it isn’t easy to see the way out, because we already know how employees are.

There is a way out, though. Change the context of how you perceive your employees. Invest in your human capital, starting with the hiring process. Read the Dale Dauten book I referenced in my earlier post, “Great Employees Only: How Gifted Bosses Hire and De-Hire Their Way to Success”. Start hiring for behavior, rather than skills. Skills are teachable and trainable, most adults’ behavior is fixed. You can hardly impact your own behaviors (the things you try to fix and change about yourself), much less the behavior of others.  Find a behavioral assessment tool you like, learn it and use it, or delegate that task to someone in your organization who would be better suited to implementing it. Those square pegs won’t fit into the round holes no matter how much you pound, so why not hire some round pegs, and free your business from the Vicious Circle of Turnover.

Capitalizing On Your Strengths

Capitalizing On Your Strengths, the tagline/mantra of my company, Benchmark Performance Strategies, is the fundamental perspective I draw from when I work with organizations to optimize their performance. At its heart, it is based on a simple two part premise: 1) All people have natural talents and strong suits that impact their performance, and 2) We are most productive when we’re in a position that allows us to draw on our natural strengths and gives us the freedom to be ourselves. Imagine a workplace filled with happy, productive people doing what they love to do, aligned with the organization’s vision and values. It is possible!

While much of what we will focus on are the strengths of individuals within an organization, it is important for the leadership within an organization to understand the organization’s strengths as well. Growing businesses may not have all of the talents they need in-house, so knowing when and how to strategically outsource competencies is crucial. Staying focused on core competencies can be a challenge, but doing so pays off in productivity and profitability.

Human Capital

People are key to the success of any organization, and the number one challenge that most business owners and managers face. How do you hire the right people, and how do you keep your good people in a competitive marketplace? Behavior is the key, learning what makes your top performers tick, and then hiring people who have those traits. Simple, but not necessarily that easy to do. In his book “Great Employees Only: How Gifted Bosses Hire and De-Hire Their Way to Success”, Dale Dauten outlines the difference this strategy can make for organizations. What he doesn’t tell you, is how these “Gifted Bosses” do it. How do you determine what the strengths are of your top people? With a behavioral assessment tool. There are hundreds of tools available, some great, some not so great. Find a tool you like, and use it. Make understanding each others’ behavior part of the culture of your organization.

I use a tool called PDP, developed by Professional Dyanmetrics Programs. I absolutlely love this tool. The individual report it creates is called a ProScan, you can look at mine here. There are several reasons I love this tool. First, it takes only five minutes to complete the online survey that generates this report. Second, the report is incredibly accurate, and it doesn’t put you in a box. Finally, it becomes the framework for an uncommon conversation between a boss and an employeee, a conversation that is structured to make a difference. PDP also includes component tools that allow you to create behaviorally based Job Models (JobScan), and to view your team members from a number of different perspectives (TeamScan). An all around great tool that I recommend for both hiring right the first time, and for retaining your good people. It’s also a great tool for understanding which employees are candidates for “De-Hiring”.

Coaching a Winning Team

A while back I was listening to a radio interview with a former NFL player who’s name escapes me. He was talking about Bill Parcells, one of the NFL’s great coaches. When asked what made Coach Parcells so great, this player said that, in his opinion, it was Parcell’s ability to evaluate a player’s talent, and then put him in a position to win. We see examples of this all the time in sports, where players who were failing on one team suddenly blossom under a different coach/system. The reverse is true as well. A superstar gets traded, and then his performance declines because he is not being utilized in a way that makes the best use of his talents. It doesn’t just apply to individuals, it applies to teams and organizations as well. Just look at how the Phoenix Suns have played recently since Alvin Gentry took over as their coach. This is in spite of the loss of two stars, Amare Stoudamire and Leandro Barbosa.

In business, the principals are the same. Evaluate your talent, understand what makes them tick, and put them in a position to win. Provide them the resources they need, and remove the obstacles to their success (that may be you blocking the road, by the way). Let your people be who they truly are, and they will blossom. You will find there is a lot less to manage with this approach. You may find that it allows you to truly blossom as well.