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2013 20 Jun

Performance Reviews: Where We Went Wrong and How to Get Back on Track

Recognize This! – The failures of the traditional annual review process can be solved through the crowdsourced performance review.

During the last decade, the clamour to end the traditional approach to the performance review has risen to deafening levels. There are many reasons for this, not least of which is Gen Y employees demanding better. Thanks to them, employees of all generations can benefit.

I like particularly how succinctly Eric Mosley, the CEO of Globoforce, makes the argument in his new McGraw-Hill book, The Crowdsourced Performance Review. The traditional, paper-based, annual approach as the sole means of providing detailed feedback to employees served a purpose decades ago. Indeed, it still does serve a valid purpose today. But the many failures of the traditional performance review must be solved through the input of crowdsourced reviews.

Just a few of the failings of the traditional appraisal process and the solutions of the crowdsourced review are:

Failing: The opinion of one person drives the annual review.

Solution: Supplement manager feedback and observation with the wisdom of the crowd – recognition received throughout the year from other employees, peers and colleagues.

Failing: Because the review is given annually, it is too infrequent and pegged to one point in time.

Solution: Give informal, regular ongoing feedback throughout the year that’s referenced during the annual review process. This timely feedback from multiple sources is far more effective at reinforcing desired behaviors and actions so that employees are encouraged to repeat actions and behaviors that  you need again and again.

Failing: Most traditional, annual reviews give feedback on goals achieved, with little focus on behaviors demonstrated.

Solution: Incorporate how results were achieved, based on your core values, as part of the review. To truly crowdsource the review, encourage all employees to recognize each other throughout the year when they see someone living your values in their daily work.

The cumulative effect of this information gathered throughout the year from multiple sources balances out the single source of more goal-based information from the manager at the annual review.

I’ve only scratched the surface of the failings of the annual performance review. I encourage you to check out The Crowdsourced Performance Review  for more.

What’s your typical experience with the performance review process in your workplace.

2013 19 Jun

Not All Employee Turnover Is Bad

Recognize This! – Some turnover is needed to ensure the best are able to excel in a strong, positive company culture and work environment.

Two of the most direct, measurable people metrics affected by strategic, social employee recognition are employee engagement and employee retention. Nearly all organizations I consult with cite improving retention as a primary ambition for creating a culture of appreciation through strategic recognition. But not all employee turnover is bad.

Jack Welch became somewhat infamous as “Neutron Jack” for his practices around removing low performers. But when you consider his focus, the perspective changes. In his own words:

“My main job was developing talent.  I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.”

As in nearly all things in life, a careful balance must be struck between employee engagement initiatives and employee retention goals. Some people simply need to move on from your organizations. Bullies should be fired outright. Some have grown as much as they can in the position you have available and can no longer contribute at the needed level. Others deserve to be fired for misconduct or other actions out of line with your company’s stated values.

In these cases, removing such employees can actually contribute to increased employee engagement as your team members see you will take the actions necessary to reinforce organizational priorities while strengthening a strong, positive culture in which all can thrive.

How does your organization treat retention goals?

2013 18 Jun

There Are No Fad Diet Quick Fixes for Strategic Employee Recognition

Recognize This! – Building and strengthening a culture of recognition requires consistent, daily effort and action.

Over cake with colleagues at a recent company celebration, I had an epiphany. Well, perhaps not an epiphany as this is a truth I’ve long known, but definitely an analogy worth sharing.

As we enjoyed cake and petits fours (they’re smaller, so fewer calories, right?), my colleagues shared their plans to “get into shape for swimsuit season,” as they called it. New Year’s resolutions for losing weight and getting fit were long passed, so now it was time to focus on the latest quick weight loss scheme – the newest pill, the craziest fad diet.

As we all joked together, I realized – this is what many companies do with employee recognition, motivation and engagement. They try the “quick fixes” – Pizza Party Wednesdays, Bagel Fridays, Employee of the Month, and my personal favorite: some form of peer nomination with a “winner” drawn from a hat.

Like the infamous grapefruit diet, these are all quick fixes. Just as no one can eat grapefruit every day for months on end, no strong company culture of recognition can survive on the infrequent and untimely Employee of the Month program and similar. A healthy lifestyle and long-term weight-loss maintenance come from one approach – diet and exercise. The same is true for your company culture. A healthy culture and long-term employee engagement and motivation come from one approach – truly strategic employee recognition.

The hallmark of strategic employee recognition is consistent, timely, frequent and specific recognition of all individuals when they demonstrate your core values in contribution to achieving your strategic objectives. Not just one guy once a month – but any employee who deserves that praise and positive reinforcement. And not just from managers, but from peers, too. That’s how you build a true culture of recognition – give everyone responsibility for contributing to and maintaining that culture over the long term.

(I must also give a hat-tip to Lance Haun whose recent post “Fad Diets and Facing Reality” cemented my thoughts on this analogy.)

Is your company on a fad diet for employee recognition or committed to a wellness routine for strategic company recognition?

2013 17 Jun

Today on Compensation Café * More Themes from WorldatWork “Trends in Employee Recognition” Report

Recognize This! – Old-school approaches to employee recognition do not deliver the business results companies need.

Today on Compensation Café, I shared additional insight into the 2013 WorldatWork “Trends In Employee Recognition Report.” In this space last week, I discussed the overarching theme of companies moving to recognition programs that drive desired behaviors. In Compensation Café, I dig more deeply into four more themes running through the research:

  • Theme 1: Companies are moving away from traditional approaches to recognition to new forms that drive business results.
  • Theme 2: Strategy is still lacking in many programs, limiting the real results that can be achieved.
  • Theme 3: Global recognition programs are making strides, but too many companies still treat international employees as second-class citizens.
  • Theme 4: Just as senior management buys into the importance of strategic recognition, training efforts for managers are falling.

Click over to Compensation Café to read more.

On a separate note, I proudly share with you launch of Globoforce’s latest book, The Crowdsourced Performance Review, by the CEO of Globoforce, Eric Mosley. If you happen to be reading this post in your spare time while at the annual SHRM conference in Chicago, be sure to swing by the SHRMStore for your own copy, and stop in on Eric’s speaking session where he will discuss this more fully:

 The Crowdsourced Performance Review: The New Social Era in HR?

06/19/2013 10:00 AM – 11:15 AM | N228

Track: Talent Management

Learn of ways to leverage crowdsourcing tools & social techniques to redefine performance management and find out who & what is driving your business.

Crowdsourcing is much more than idea generation and problem solving — it has the power to transform the entire HR industry and the traditional ways employee performance is evaluated. With real-time, authentic feedback from employees’ peers, you can get a social yet unbiased view into what and who is driving your business. You will learn why you must crowdsource in order to foster a unified employee environment, increase performance and engagement levels and get unbiased, foolproof insight of your employees. Gain the knowledge necessary to successfully implement a social recognition program that will have all your employees inspired to aid in a new crowdsourced approach.

2013 13 Jun

Top 5 Employee Recognition Goals from the Latest WorldatWork Trends in Recognition Report

Image Credit: WorldatWork “Trends in Employee Recognition 2013 Report”

Recognize This! – More and more companies are realizing the power of strategic employee recognition to reinforce and drive desired behaviors in the daily work of employees.

WorldatWork just released its 2013 Trends in Employee Recognition report. The timing is ideal, as earlier this week I blogged about the importance of behavior-based recognition and WorldatWork’s press release about the new report proclaims: “For the first time in the survey’s 11-year history, programs to motivate specific behavior jumped to a top-tier goal, cited by 41% of organizations in 2013 vs. 25% in 2008.”

Indeed, four of the top five recognition goals for organizations across industries are the focus of strategic, social employee recognition programs. The outlier (and still most popular program) is recognizing years of service. I believe this old standby remains at the top of the list because, even when companies find themselves in the toughest financial straits, leadership believes they must honor the loyalty of employees shown for years of service.

I, too, believe this to be important, but traditional years of service recognition alone will not and cannot drive achievement of the other four goals of recognition as stated by respondents to the WorldatWork survey. It is truly an outlier. Let’s look at the others:

Create a Positive Work Environment – This is foundational to employee engagement. I often comment that leaders cannot engage employees. You can, however, create an environment and culture in which employees choose to engage. Which leads directly into the next goal.

Create a Culture of Recognition – A culture of recognition is very different from a recognition program. A strategic program that encourages all the right recognition behaviors and actions helps to create this culture by giving everyone the means and ability to easily recognize others for their excellence in a meaningful way (including in their local language for global organizations). Deep insight into the culture in action through detailed, actionable real-time measurement and reporting also helps management keep the culture on track while empowering all employees at every level to own the culture.

Motivate High Performance – Done correctly – meaning timely, specifically and frequently – recognition reinforces for employees why and how their efforts are meaningful and necessary in helping to achieve a bigger vision or strategic objective. Multiple research sources show this is the most motivating factor for employees to continue to achieve at high level – making progress in meaningful work.

Reinforce Desired Behaviors – The newest member of the “top five recognition goals” list is gratifying to me as I’ve spent the last 11 years of my career consulting with organizations of all sizes and industries on the importance of exactly this point. It’s a key tenet of strategic recognition as outlined in Winning with a Culture of Recognition. Your organization has already likely defined desired behaviors in the form of your core values or guiding principles. Those should be the factors every recognition moment reinforces across your organization.

I’ll be blogging again on additional findings in report, including consistency in budget for recognition (still 1-2% of payroll), international programs, and most desired rewards.

What are your top five goals for your employee recognition program?

2013 12 Jun

Tattoo Your Culture on Your Employees’ Hearts, Not Hands or Heads

Recognize This! – While few employees will choose to permanently ink their skin with your logo, far more will indelibly tattoo your values and ambitions on their hearts and minds when recognized for their efforts, contributions and achievements.

I’ve heard a lot of tremendous stories of employee engagement over the years – both at a corporate wide level and the very personal, individual level. And then I hear stories like this one in which a real estate agency gives employees a 15% pay increase for getting tattooed with the company’s logo. (Forty out of 1100 employees actually did it so far.)

To me, that’s not so much engagement as bribery, but even for a 15% pay rise, you must have some level of loyalty to the organization to permanently etch the logo on your body. Then I read this story of tech employees in Bangalore, India, who work for some of the best known brands in the technology industry (IBM, Apple, Microsoft) and are voluntarily, and with no incentive, tattooing the company logo on their bodies.

Think what this says about employee loyalty and commitment to the company. But beyond that, even if the employee were to separate from the organization, think of the pride they must carry forth for their time with the company. That’s an employee value proposition most employers only wish for, especially in high attrition industries like technology and energy.

Of course, this is an extremely limited pool of people who are willing to permanently ink themselves with the company logo. But we as leaders in our organizations must be focused on tattooing our culture and values on the hearts of our employees. How do we do that? By making the foundational elements of our culture – our core values and strategic ambitions – meaningful and personal in their daily work. The most effective way to accomplish this is by recognizing individuals in a very specific and timely way when they demonstrate the values and contribute to achieving the ambitions. Even better, entrust them to do the same with their peers and colleagues.

Would you get a tattoo of your company’s logo? Would you do so for a 15% pay rise or simply because of the enduring pride you have in being associated with the company brand? Do you want your employees to smile when asked where they work?

2013 11 Jun

The Importance of Behavior-Based Recognition and Reward – A Goldman Sachs Illustration

Recognize This! – Deeply embedding your core values in how employees are rewarded is critical to overcome too much emphasis on results achievement to the detriment of company reputation.

A foundational tenet of strategic employee recognition is recognizing the “how” as well as the “what” – in other words, acknowledging and praising the manner in which results are achieved as much as recognizing the results themselves. This is a critical point as simply recognizing the “what” (the results) without recognizing the “how” (the values demonstrated in achieving the results) can quickly lead a company down the Enron path. After all, one of Enron’s core values was “integrity” but that surely wasn’t apparent in how their employees were encouraged to achieve end results.

Another company in the news during the recession for too much focus on the “what” was Goldman Sachs. Now, I’m pleased to see the investment bank in the news for promoting a new reward approach based on demonstrating “cultural” behaviors in line with their company mission and reputational goals. From their Business Standards Committee Impact Report:

“We also changed our annual employee performance review and rewards processes to include an assessment of reputational excellence, linking “cultural” behavior to how our people are recognized and rewarded…

“Now, as part of the review questionnaire for all professionals, reviewers are asked to rate the reviewee with regard to their focus on trust, transparency and long-term orientation in connection with client relationships. These changes have reinforced four key messages to all of our employees regarding (1) the importance of serving our clients, (2) the importance of protecting the firm’s reputation and upholding our culture and values, (3) the link between  ‘cultural’ behavior and how people are recognized and  rewarded  in our organization and (4) individual and collective accountability…

“These changes have impacted our decisions about compensation and who we reward. Moreover, our review and reward processes more powerfully communicate and reinforce to our professionals the need to focus on our clients and our reputation and to always act in accordance with the highest standards of the firm.”

Incorporating your core values into the formal performance review process directly is certainly one way of effectively driving home the importance of the “how.” Doing so more informally and frequently through timely, specific recognition throughout the year is also necessary to make living these “cultural behaviors” become second nature in how the work gets done every day.

How does your organization reinforce your core values in how employees are measured, recognized and rewarded?

2013 10 Jun

Creating a Culture of Recognition: It’s Simple, But Not Easy

Recognize This! – Balancing business goals and heartfelt recognition is the goal of strategic recognition and culture management.

I have the honour of doing what I love for my job – I help company leaders energize their cultures into ones of appreciation and recognition. Creating these cultures is simple – empowering everyone to “catch someone doing something good” – but that doesn’t mean it’s easy. Strengthening culture rarely is.

Recently, I read this story from Terri Robberson on the blog The HR Difference:

“One of the most mind-numbing meetings that I have ever attended was a presentation by a Director of HR at one of my former employers. She had been leading a task force comprised of managers, HR Business Partners and employee representatives throughout the company to create a new Employee Recognition Program. While I don’t remember the details of the program, I vividly remember the two-hour meeting in which the team talked about their proposal. I sat there as they reviewed detailed categories of the types of things employees could do to merit recognition and how the various contributions aligned to certain levels of recognition in the program. This was followed by pages of guidelines that defined who was qualified to be recognized and how often; the specific categories of allowable recognition; and how it was all going to be managed and monitored to ensure the program wasn’t abused. I remember thinking, ‘Geez, employee recognition should be a lot more fun! It should be a heart felt “thank you” to the person receiving the recognition. Recognition should create a buzz that inspires others, not be one big blob of bureaucratic red tape!’ My mind drifted to the words, ‘Encouraging the Heart,’ which is how Kouzes and Posner describe employee recognition in their book, The Leadership Challenge. This program had no heart! I left the meeting depressed.”

This story illustrates perfectly the challenge of simple, but not easy. Best practice for successful strategic employee recognition requires a commitment of 1-2% of payroll to fund appropriate recognition activities across the organization. When committing that level of investment, there must be some level of control for the program, measurement and reporting mechanisms to prove the business value and ROI being achieved.

But you must also never lose the “heart-felt thanks” value of the program, too. After all, that’s the reason for your investment. Make it easy for employees at all levels to share their appreciation for their colleagues’ efforts.

How do you balance business goals with heartfelt appreciation?

2013 7 Jun

The Confluence of Happiness and Performance = Engagement

Recognize This! – Balancing employee happiness and performance is critical to long-term, sustainable employee engagement and impact.

Earlier this week, I shared insight from Eventbrite Co-Founder and President Julia Hartz on the importance of helping employees understand how they personally and individually contribute to achieving the company vision. In the same interview, Ms. Hartz also tackled a subject I’ve seen more and more in the last few months – should happy employees be our goal? Shouldn’t we, as a business, be focused on performance and results?

I like how Eventbrite arrived at the answer. In Ms. Hartz’s words:

“We’ve discovered that the common denominator of performance and happiness is impact and so that’s what we’re going to focus on. I realized this was the question that had been plaguing me. I wondered if I had sacrificed productivity at the expense of happiness. I then went back to the drawing board and thought about how you elegantly, subtly and thoughtfully introduce this notion of performance into a culture where people are happy and really enjoy their day-to-day. Granted it wasn’t that we weren’t performing as a whole. Rather it was how do we think about the future and setting the bar even higher? How do we think about velocity, quality and happiness?

“The entire last year we’ve kind of germinated through this notion of performance. We’ve discovered that the common denominator of performance and happiness is impact – and so that’s what we’re going to focus on. That’s where we’re going to put our cards and how we’re going to drive the team.”

This is driving to the balance of recognizing the “what” as well as the “how” – understanding that achieving results isn’t enough. We must balance that with the manner in which those results were achieved. In the case of Eventbrite, it’s balancing performance and happiness to arrive at impact.

Impact, to me, is another way of expressing engagement. Employees need to know their daily efforts are contributing to achieving a greater objective or purpose – they are having an impact. This is foundational to employee engagement – understanding what I do has value and, therefore, choosing to give more discretionary effort to achieve desired goals.

You can have a slew of happy employees but no relevant business results. You can also have tremendous results, but nothing but miserable employees. Both models are clearly unsustainable. Find the balance, achieve engagement, and see results sore.

2013 6 Jun

Today on Compensation Cafe – Employee Retention: How to Combat Wandering Eyes

Recognize This! – A salary increase should never be your immediate default solution for employee turnover challenges.

More than half a dozen clients I’m consulting with currently tell me retention is a top priority for them. Indeed, they feel like they are constantly trading employees among their competitors, usually over a few dollars extra in pay. Yet, when an employee’s decision to stay or go comes down to a small difference in the amount of money in their paycheck, you know you’re in trouble as an organization…

For the rest of the story, check out my post today on Compensation Cafe and learn why your actively disengaged employees shouldn’t be your biggest concern (especially in regards to retention).