By Sherryl Stalinski and Mary Ann Downey
We heard about the research multiple times before: Our brains don’t know the difference between a physical threat and an emotional threat. The limbic system takes over; the prefrontal cortex shuts down; reason and rational thinking become impossible. Our “a-ha” moment came when neuroscientist Dr. David Rock (2009) was specifically talking about performance feedback: “Giving feedback often creates an intense threat response that doesn’t help people improve performance” (p. 219). It was one of those forehead-slapping, “Duh!” moments.
What do we often hear HR and OD evangelize about? Employees need — no, want — more feedback! It’s not bad enough we’ve been subjecting employees and managers alike to the painful discomfort of annual performance reviews; now we strive to make them endure this agony all year round, or at least quarterly as part of the performance management process. What are we thinking?!
The terms “feedback” and “performance appraisal” are often used interchangeably (albeit erroneously), so here is where we need to make the distinction between regular, ongoing performance feedback and the annual ritual of documenting performance in an annual appraisal. The appraisal is not the problem with performance management — it’s just the obvious scapegoat for a process that often yields marginal results. The formal appraisal assures HR and senior management that supervisors are talking to their employees at least once a year (even though we preach and hope they do it more frequently) and institute a minimum level of accountability.
Research by the Institute for Corporate Productivity (i4cp) (2010) shows a definite correlation between certain performance management practices and business market performance, and the highest performing companies emphasize the value of performance management significantly more than lower performing companies. Research by i4cp has shown the business case for performance management.
So if feedback itself is not effective in improving individual performance, what are these high-performing organizations doing that is generating better financial results? Hint: It’s not the performance management software system; it’s not the rating scale, the labels used to describe performance (“solid performer” versus “meets expectations”) or some sort of forced ranking or distribution.
None of those show any correlation to market performance. Performance management training for managers helps. But the highest impact comes from the conversations between managers and employees beyond the annual appraisal: establishing goals aligned with organizational objectives, development plans, ongoing review of accomplishments and, yes, feedback.
It is clear that getting rid of performance management is not a good idea. It may not be palatable or enjoyable but, like eating your broccoli, exercising regularly or doing your tax returns, it’s just one of those things that is good for you and has to be done.
Every year, business magazines and professional journals publish articles about the need to throw away and eliminate the annual performance appraisal. Every year, HR managers have these articles forwarded to their inbox by frustrated but well-intentioned managers and even their senior leadership. In many companies, if you ask a manager what performance management is, they will describe the annual performance review form. And if asked why they have to do annual performance reviews, the response is often a shrug of the shoulder and/or “HR makes us do them.” Meanwhile, HR managers are dreading the annual ritual of goading the completion of this industrialage artifact. Without a better alternative, we know that getting rid of what we don’t want is not the path to get us what we do want.
Even in high-performing companies that have instilled year-round performance protocols from setting goals and ongoing feedback, the end-of-year review and meeting is the single most hated part of the process, which is likely why it seems to also get the most disdain and attention. That brings us back to the feedback issue we started with. David Rock sums up the problem perfectly:
Performance review training manuals tell managers to give “constructive performance feedback.” The problem with “constructive performance feedback” is that, like a wolf sniffing a meal across a field, even a subtle status threat is picked up unconsciously by our deeply social brain, no matter how nicely it’s couched. (p. 206).
Regardless of the emotional roadblocks, the practice of delivering routine, on-the-spot feedback on how an employee is doing their work is an important part of managing performance. Ongoing feedback ensures that expectations are clear and addresses minor performance detours before they become major derailments. But think about it: The minute those awful words are uttered — “I want to give you some feedback” — the receiver goes on the defensive and not much in the way of improvement recommendations is going to get through to the rational mind. This is exactly the same reason end-of-year performance reviews by themselves do very little to actually improve performance.
If Not Performance Management, Then What?
Bela Banathy (1996), one of the leading scholars in the area of social systems design, wrote, “It’s impossible to restructure a horse and buggy into a spacecraft no matter how much energy and resources are put into the effort.” Focusing on fixing problems “limits perception to adjusting or modifying the old design in which our systems are still rooted. A design rooted in an outdated image is useless” (p. 45). And yet, that seems to be exactly what we’ve been attempting to do with performance management. With that said, we didn’t get rid of the horse and buggy and then invent the automobile. It was the innovative creation of a new model that eventually made the old model obsolete.
The more the two of us discussed this dilemma, the clearer it became to us that the problem of managing performance itself is systemic. We’re talking about complex, adaptive, open systems — not technology/software systems. A complex, open system is comprised of elements in optimum interrelation, creating an emergent property that is more than the sum of its parts. Higher performance is the emergent quality we are trying to realize with an interrelationship of performance management components and processes.
The good news is we already have most of the elements of a truly effective system to manage performance, but we’ve either failed to integrate them or have put them in the wrong interrelation with each other, overemphasizing the least critical components.
So what are these components and what are the interrelations that will create this emergent property of high performance? Marc Effron, author of “One Page Talent Management” (2010), suggests starting with the science. We know what works, but we haven’t yet integrated a lot of the new science in the area of brain research or motivation into performance management. We haven’t yet fully integrated the understanding of complex, adaptive and even evolutionary systems (which include our human systems and organizations). Rather, we’ve focused on the results of benchmarking surveys that look at the current state but haven’t included new scientific understanding that can bring us to a more effective solution.
The challenge with improving performance in people is, well, we’re people. As much as we like to maintain that we are a rational species, the fact is that most of our behavior is driven by the subconscious, as David Brooks explains in “The Social Animal” (2011). If things go well — if we’re rewarded with appreciation and recognition — our brain gives us a nice shot of dopamine and we feel good. If the opposite happens, our brains go into survival mode, and, as Seth Godin (2010) describes, the “lizard brain” takes over and all bets are off. Failure to understand and include this knowledge in designing our performance management processes is among the main reasons HR has failed to deliver business results through performance management.
In addition to Brooks and Godin, motivation and performance are topics written about recently by Daniel Pink (2009) in “Drive!” and David Rock (2009) in “Your Brain at Work,” among others. Additionally, Robert Kegan’s work on the ability of adults to continue developing mentally and emotionally is summarized well in one of his later works, “Immunity to Change” (2009). All these authors talk about the impact of emotion on performance at work and how our continued insistence on dealing only with the rational side of our minds is ultimately futile. At the same time, ignoring the capacity for reason and the critical element of effective and efficient process is just as incomplete. This is not an “either/or” debate, but we believe it leads to a “both/and” solution.
Continuing to try to re-engineer the horse and buggy of industrial age annual reviews won’t work. Based on new understandings in science, including neuroscience, systems science and psychology, we propose designing an entirely new approach to managing performance. The three key principles of our approach are:
- Managing performance starts before an employee is hired
- Creating and valuing a trust-based relationship between employee and supervisor
- Developing customized role-based HR processes
Managing Performance Before an Employee is Hired
Mission and Goal Alignment. While some companies work hard to cascade top-level business goals through the ranks, these are typically financial and production goals and rarely reflect a “balanced scorecard” approach to goal setting. This approach is both time consuming and unrealistic in a fast moving global economy. Pulakos and O’Leary (2011) question whether the complexity and challenge of fully cascading organizational goals is a useful or effective practice. Ideally, organizations should select employees who feel committed to the purpose (mission) of the organization. This means the hiring manager must be able to articulate the organizational mission and how the employee’s role supports it. The evidence is clear: Employees who are emotionally invested in their roles perform better. It takes less effort to select the right person than to convert an incumbent whose performance may be impacted because of a lack of emotional alignment with the organization’s or even work group’s purpose and objectives.
Autonomy. Both Pink and Rock identify autonomy as a critical element of motivation and emotional engagement. The more employees initiate and drive the process, the more they maintain autonomy of their performance. If a manager cannot give this type of autonomy, then the company either has the wrong employees or the wrong manager.
Creating a Genuine Trust Relationship
Year round, genuine communication between manager and employee. Specifically, managers should have two-way conversations about a lot more than just performance. Both managers and employees can demonstrate and hold each other accountable for this relationship building. These conversations would be focused on topics such as engagement (“What do you like best about your work? What frustrates you?”); development (“Which skills and competencies do you need to achieve your goals? What do you need to develop in order to master your current role and prepare for future positions?”); career aspirations and recent accomplishments; and how the manager is doing manager (“What roadblocks can I try to remove?”). These conversations build engagement, and they can’t be achieved by filling out a form. Additionally, these types of dialogues support relatedness, trust and emotional safety. Without those conditions present, corrective feedback, even if focusing on future objectives versus past “wrongs,” won’t work.
Address poor performance in a distinct and separate process apart from the year-round process. Some lawyers maintain that documented performance reviews help the plaintiff (employees) more than the defendant (companies) in wrongful-termination complaints (Janove, 2011). Poor performance should be handled with more rigorous documentation of counseling, corrective action and followup, yet some managers use the annual appraisal as their singular method of addressing poor performance. If a separate performance improvement or corrective action process is not in place, it should be implemented, and managers and employees alike should be made aware of the separation and different purposes of the two processes.
Developing a Customized Role-Based HR Processes
Simplify procedural requirements. Marc Effron advises to “eliminate complexity” when he discusses the overengineered paperwork and documentation typically involved in performance management. However, it is still important to realize that managing performance itself is a complex process with many interrelated variables.
The “job requirements” of documentation, we agree, should be as simple as possible for both manager and employee to complete, while still generating enough information to uphold accountability. The easiest way to create this simplicity is to recognize that different roles have different requirements. This does not mean that if you have 1,000 employees, you will have 980 unique performance management forms, nor does it mean getting stuck in the political mire of role hierarchy. It does mean determining the three to five different roles that exist in your organization. It may also mean abandoning the heavily invested, over-programmed and complicated software systems, which will bring joy to some and dread for others.
Make the rewards match the type of work. Daniel Pink’s work clearly proves that typical “carrots and sticks” rewards, including financial reward, only work in certain limited situations, typically where work is routine, linear and repetitive. Creative work, problem solving and knowledge work are best achieved when the employee feels a sense of competence, autonomy and relatedness (Kindle Locations pp. 948-949). He describes the difference: “An algorithmic task is one in which you follow a set of established instructions down a single pathway to one conclusion. That is, there’s an algorithm for solving it. A heuristic task is the opposite. Precisely because no algorithm exists for it, you have to experiment with possibilities and devise a novel solution” (Kindle Locations pp. 390-392). Most employees, even knowledge workers, have certain aspects of both algorithmic and heuristic tasks within their work; making the rewards match the work may be a very individual endeavor.
Having all the right “parts” is no guarantee that a system will work. A system is an interrelationship of parts that catalyzes the emergence of a new property. Imagine a flashlight with the case, the bulb, batteries, wiring and switches. On the table, they are just a heap of parts. Only after all the parts are put together in just the right way will the flashlight create light. Performance is the emergent property of a complex system, and discovering just the right relationship of components for any given organization is the challenge facing HR and OD leaders.
After two years of reading everything we could find on individual and organizational performance, we have concluded there is a genuine desire and need to manage performance. We also realize that many of the current authors, HR professionals and individuals have realized a piece of the solution, but no one has been able to let go of the proverbial horse-and-buggy model and truly describe something altogether new. While the first prototype model may not be an eloquent sports car, we believe we have the blueprint for something new: hiring for alignment and engagement, developing trust-based employee-manager relationships and simplifying while customizing role-based talent processes.
Banathy, B. H. (1996). Designing social systems in a changing world. New York: Plenum.
Effron, Marc and Ort, Miriam. (2010) One Page Talent Management. Boston: Harvard Business Press.
Hallowell, Edward M. Overloaded Circuits: Why Smart People Underperform. Harvard Business Review, January 2005.
I4cp.com (2010) A Business Case for Performance Management., Performance Management Playbook. Available at www.i4cp.com.
Janove, J. Reviews—Good for Anything? HR Magazine, June 2011.
Kegan, Robert (2009). Immunity to Change: How to Overcome It and Unlock the Potential in Yourself and Your Organization. Harvard Business Press. Kindle Edition.
Pink, Daniel H. (2009). Drive: The Surprising Truth About What Motivates Us. Riverhead. Kindle Edition.
Pulakos, Elaine and O’Leary, Ryan (2011) Industrial and Organizational Psychology, 4 (2011), 146–164. Society for Industrial and Organizational Psychology. 1754-9426/11.
Rock, David (2009). Your Brain at Work. HarperCollins e-books. Kindle Edition.
Godin, Seth (2010). Linchpin. NY: Penguin.
Brooks, David (2011). The Social Animal. NY: Random House.