Key problem: the annual review and forced rankings kill performance and motivation
In this post I am sharing a key insight and key formula one can use to motivate and increase performance. I describe the great practices which companies use since they abandoned 2 of the most detrimental performance management practices we know: the annual performance review and forced rankings.
Who wouldn’t want to use techniques that work, instead of tools that have a demotivating effect? In Part 1 of this post I described a performance management tool which is proven to work. It motivates, changes behavior, is fun and provides real-time feedback. Strictly speaking it is not used in business but it is transferable into business practice. Now, let’s look at the cold reality of everyday work life.
So, what’s the problem here? Engagement!
No engagement = no motivation = no performance.
Gallup suggests that only 3 in 10 American workers are engaged.
For a business culture which is thriving on positive attitude that’s a low score. I dread to think what the score would be in a German study because here “praise = not being yelled at” (I am allowed to say that because I am German! We don’t say things like “well done, good work, thank you”).
Key problem: in business we do not use the right incentives to motivate people
15 Mio people watched Dan Pink’s excellent TED talk on motivation. I did not know that traditional rewards (money) aren’t always as effective as we think. In fact, Dan explains what incentives work for what type of work – it is a must watch! Surprise: Dan’s experiments showed that
How can people be engaged (and therefore motivated to perform well) if they get feedback only 1x a year where they are told what they do wrong?
How can people be engaged if a company uses forced rankings, i.e. rates 80% of its employees as average performers or below, even if their actual performance is much better?
IBM, Microsoft, GE, Adobe, Deloitte and Accenture are major companies that completely changed their approach to performance management. Getting rid of annual reviews and forced rankings is one of them.
Key insight: To improve performance and motivation, companies switch to tools that are more visual, simple, real-time, increase feedback frequency and are forward-looking.
Here is a list of things they do:
- Ask forward looking questions at the end of each project (Deloitte)
- Would I always want him or her on my team?
- Is this person at risk for low performance?
- Is this person ready for promotion today?
- If it were my money, would I award this person the highest possible compensation increase?
- “pulse surveys” include measures of how well each manager sets expectations, gives and receives feedback, and helps people with their growth and development (Adobe)
- “check-in” systems where managers and direct reports have regular conversations about performance and other issues (Adobe)
- frequently discuss priorities and expectations with their supervisors (Accenture)
- feedback via an app on series of near-term goals, or “priorities.” Managers are expected to have frequent discussions, called “touchpoints,” on progress toward those goals (GE)
- at IBM shorter-term goals, feedback at least every quarter and employees will be reviewed based on five general topics: business results, impact on client success, innovation, personal responsibility to others, and skills
Key insight: you need to be a helper! You only get high performance from people when you help them achieve high performance.
Key formula: Help by talking often, about expectations, priorities and what (doesn’t) work.
I love being around high performers because I can learn from them! I am a rower and recommend watching this 3 min video in which rowing coach Mike Spracklen shares his approach to motivate people (since 1976 he led teams from GB, USA, Canada to 40+ medals at Olympic Games and World Championships).
He says something along the lines of “an environment is created where we all have a goal! All the time I am helping…different people need different forms of help…some need a kick up the pants, some an arm round the shoulder, some encouragement, some motivation….if I don’t push you, then I am not helping, then I don’t do my job.”
What does this inspire you to do?