In my last LinkedIn article, “Despite the flaws, don’t just stop your annual review”, I shared 5 articles and 3 books that explain why “everyone” hates the annual review process, BUT I cautioned just dropping this all together.
When companies stopped their performance review process, managers gave less feedback and employee performance dropped 10%! (Wharton article)
So how can you give your team feedback in a positive way, that they enjoy, and that will ultimately achieve the intended goal to improve performance and engagement?
I am glad you asked!
Let me introduce you to “ongoing performance management.”
This process takes the best aspects of the annual review (yes there are some beneficial aspects), and combines it with weekly coaching and feedback, with a dose of training and development planning thrown in for good measure.
Such a hot topic – as I was writing this I received an email quoting a study by the Brandon Hall Group that showed that “organizations that made ongoing performance management a collaborative, strategic priority had better business results than those who didn’t.”
Companies who adopted ongoing performance management saw these improvements:
- 70% reported an increase in revenue
- 72% noticed a decrease in voluntary turnover
- 54% experienced an increase in customer satisfaction
How did they do it?
Organizations are adoping three new methods:
- ongoing feedback- usually weekly or monthly “one on ones” between managers and each employee individually
- “ratingless reviews” – without the focus on employee rating on a scale from 1 to 5
- “crowd-sourced feedback”- input and feedback from peers and direct reports (if a manager) are included, not just an employee’s boss
Companies who saw the best results didn’t stop the annual performance discussion, they shifted the focus to more of an overview of key learnings and jointly created development goals for the next year.
This is what employees want to know– “how can I learn, grow, and perform better next year?”
When companies ADDED these three methods (together) to the annual discussion between an employee and manager, they saw improvements in strategic alignment, developing a performance culture, support of company values and strategy, and yes, increased company performance.
This combination of “cutting edge” practices provided more focused and useful feedback, while increasing both manager and employee experience with the performance management process. [See graph]
Said another way, people like this process better and feel it is more effective on the things that matter– improving employee and company performance.
For more information on how this process works, visit our website page for more resources:
It’s that time of year- yeah! The annual performance review season…when managers scramble to track, measure and discuss performance with employees, in an attempt to focused employees on key priorities and improve performance, attitude, commitment, trust and engagement, all in one hour.
Oh right, you also squeeze in a quick chat about this year’s “raise” as you wrap up the meeting [perhaps awkwardly].
I usually joke that performance reviews are “universally” hated, but this is close to the truth.
Employees and managers dread doing them and question the value of the traditional annual review process. Even the largest employers struggle with improving employee performance and engagement based on this time-consuming process. More than half admit there is limited alignment of “pay for performance” in their process.
“Performance management is often a source of great frustration for employees who do not clearly understand their goals or what is expected of them at work. For these employees, annual reviews and developmental conversations feel forced and superficial, and it is impossible for them to think about next year’s goals when they are not even sure what tomorrow will throw at them.”
(Source: State of the American Manager: Analytics and Advice for Leaders, Gallup 2015)
In fact, by 2015 12% of the Fortune 100 decided to eliminate them.
Since large employers are abandoning this very corporate practice, you may think you should do the same at your business.
The question to ask is: “was the new system any better at linking performance to rewards and enhancing a culture of engagement?”
A new study by advisory firm CEB found that measures of employee engagement and performance dropped by 10% when they stopped conducting annual reviews!
According to a Wharton article that summarizes this research paper, “Managers actually spent less time on conversations, and the quality of those conversations declined. Without a scoring system to motivate and give structure, performance management withered. As one manager told CEB: “When I gave someone a low score in the past, I felt responsible for helping them out, now I just don’t feel that I have to spend time doing that anymore.”
Wow, scary stuff! When managers don’t “have” to conduct annual review meetings, they actually might have less interaction with their team. Even the imperfect process is holding managers partly accountable to coach their team.
Here are several articles and books that explain the flaws with this universal practice, and some solutions that have been tried:
Tom Coens and Mary Jenkins, Abolishing Performance Appraisals: Why They Backfire and What To Do Instead
Garold Markle, Catalytic Coaching: The End of The Performance Review
Charles Jacobs, Management Rewired: Why Feedback Doesn’t Work and Other Supervisory Lessons from Brain Science
Now that you see the challenges with traditional performance review, read my article to learn about the “cutting edge” practices that are replacing it: “Replace Your Broken Annual Review with “Ongoing Performance Management”
The (busy) life of a small business owner
When you started (or joined) your business, you did a lot of work yourself. As the business grew, you added staff to take care of the daily “work” yet you never seem able to get yourself out of everyday responsibilities.
Your days are busy but progress is slow, and you go home feeling like you didn’t accomplish anything. A 40-hour week seems like a luxury.
You would like more free time, but you are afraid to leave since problems surface and you “pay for it” when you come back.
You have a big list of ideas to improve your business, but these never seem to get started [much less finished].
The cycle repeats
You might even have hired someone new to take some of your workload, or started “delegating” some of your work to others.
But despite your best efforts and good intentions, your to-do list is long and your days are filled with endless calls, meetings, and requests that eat up your time.
Or someone recently quit, leaving you and the team hanging. Now you spend your precious time interviewing and training the new person (which you hate), and then catch up for the lost time.
Frustrating, isn’t it?
It’s an endless cycle. Every Monday you start out with big plans for the week, only to leave Friday with not much progress to show for all your hard work. Some days you feel so burnt out and overwhelmed, you think about exiting the business.
And deep down you know this can’t be the way to grow your business.
What could be the cause? Why are you doing so much in your business?
Because you don’t have the team you need to support you—a trusted, reliable team.
If you did, you would be comfortable letting them handle the daily activities.
You would be confident that they are doing a great job: growing sales, caring for your customers, making great decisions, while keep you updated on progress and achieving your ambitious business goals.
So let’s explore some possible reasons you don’t have a reliable team.
Reason 1: You are under-staffed
Sometimes you truly don’t have enough staff to cover the work to care for your current client base. People are spread thin and are just trying to keep their heads above the water. Obviously if everyone is handling a high workload, it’s hard for you to be confident everything is being done well.
Perhaps you just added a burst of new customers, or you have a seasonal bump in demand, or you are in the process of training a newbie.
Teams under pressure, overworked, and stressed are notorious unreliable.
You may think hiring is the answer, but it isn’t always the best solution to start.
When you address the other reasons (below), this usually increase the effectiveness, capacity, and therefore the reliability of your current team.
Reason 2: You have low performers
You likely have at least one person who is not performing well.
It might be someone whose job changed but their skills didn’t keep up, or they are struggling with the workload or an aspect of the job, or they are slow in taking on new responsibility. They might have inconsistent output, working hard some weeks and slacking off others.
You tried feedback, coaching, or training with short-lived improvement.
When someone on the team has sub-par performance, of course you don’t feel you can rely on him or her.
Reason 3: You have people with attitude issues
Sometimes you have people who do an adequate job, but it comes at a price. They give you or co-workers a hard time, grumbling and complaining when you assign work or ask for a status update. They might be toxic to peers, openly difficult to their supervisor, or continually resist change.
Just like the low performers, Debbie Downer and Toxic Theo aren’t your go-to people either. They may do the work (if you are willing to put up with the negativity), but it’s a good possibility they may not do the work well.
When you avoid performance correcting conversations with low performers or those with attitude issues you are not building a reliable team.
What most managers do is “reward” unreliable people by taking work and giving it to a more competent high performer. A great solution? No, but you would rather give work to the reliable. So you are stuck in this “catch-22.”
Both these types of employees drag down the reliability of your team, lower your confidence that everything is under control. Because it isn’t under control.
Even more importantly, “unreliable co-workers” is a main reason top performers quit, so ignoring these issues can force out your reliable ones!
Reason 4: Your “open door” has a line of people asking for help
When you let people pop on by to run things by you, you are enabling “problem bringers” instead of developing “problem solvers.”
“Hey boss, what do you want me to do about this? Mr Z called and wants to know what is happening with the new thing” These continual interruptions fill up your day, and distract your ability to focus on anything else.
Remember the biblical parable about “teach a man to fish, and he eats for a lifetime”? It’s the same for decision making.
When you are the source of problem solving you also become responsible for the decision, and enables a co-dependence on your input and guidance.
If you can’t rely on your staff to make good decisions without you, you will be chained to the office, worry when you are not there and be called 10 times on your vacation.
Reason 5: Your process is broken
Sometimes it’s not the people who are unreliable, it’s the process itself that causes problems, delays and customer issues.
If there are 5 people who are involved in the process to convert a proposal to delivery of a new sale, there are at least 5 places where the handoff can be incomplete or inaccurate or dropped entirely.
Sometimes your people are doing their best struggling through the convoluted and flawed process. To improve the human-side of reliability, check the underlying system.
If your good performers sometimes have issues with reliability, it might make sense to look at the work flow for effectiveness and efficiency.
Reason 6: You resist delegating
Hey, I get it. You need to trust first before you delegate.
If you can’t be sure the work will be done timely and accurately, you keep control of that task yourself. Even if it is boring or you hate the task.
I find that owners I work with have two main reason they don’t delegate.
One reason is the “it’s easier to do it myself” syndrome. Yes, it will take 20 minutes to show someone once to do this 10 minute task, but remember it’s 10 minutes every week (=500 minutes a year, 8+ hours.) So consider your time investment choices carefully.
The other reason is that a prior delegation was a disaster or just a big pain. You had to chase the person down for an update, nag them to finish it, they did it wrong, or worst of all created a big problem. Painful conclusion: brings you back to reason one- it’s easier to do it myself.
If you want to build a reliable team, you must improve your skills in coaching and training to achieve a successful transfer of work that doesn’t belong on the to-do list for a CEO or manager.
Reason 7: Desired Results are not clear (or rewarded)
You may not realize it, but if you are like most business owners, you are not clear about desired results or clear about priorities.
Most decent employees try to figure out what “Done Right” looks like and to do their best with the resources and tools you give them.
If you don’t measure or track any results, they may not know how they are doing. Absent of any data or feedback, most people assume that “no news is good news” and they are doing their job to meet your expectations.
So the “unreliable” don’t know it and don’t have any reason to change.
You also may not be rewarding the trusted reliable ones. Those that step up are given more work, those that duck and cover are given less work, and everyone gets a 3% raise and about the same year-end bonus.
Consider the messages you are sending with feedback, recognition and pay—is it rewarding reliability?
Reason 8: You can’t find good people to hire
Yes, I advise that you should improve your current team performance first.
But the lack of “good people” to hire is part of the reason you accept low performance or poor attitudes. You feel hostage because if you address the issues they might quit, and a mediocre person is better than no person.
You probably also dread the hiring process and rush to fill an open position. You take the “best” applicant, even if you worry they won’t work out.
If you settle for third-string players on your team and in your new hires, this is definitely a reason you don’t have a reliable team.
After you read this list, how many reasons do you have?
How many of these issues exist on your team?
If you have 3 or more, you likely don’t have a reliable who you trust to delegate work, run daily activities and work on projects to grow the business.
The Solution: Building Your Team Model
To build a reliable team, you need the Right People in the Right Jobs, Doing the Right Things
Next Step: Read the Guide
Would you like to learn the exact steps to go from stuck in the day-to-day to building a trusted reliable team?
Click to Download the detailed guide:
Building Your Team: Right People… Right Jobs
Lately I have been sharing with you resources to 1) Clarify the best use of your time, 2) Create a delegation wish list of your “stop doing” tasks, and 3) Identify to whom to delegate this list.
By delegating, you are creating a “win” for you AND a “win” for you high performers.
Your high performers crave challenging assignments and want to know they are being developed for future growth.
In fact, “opportunities” to develop is the number one retainer and engager of your top people- the least expensive and most powerful reward your organization has to build your A team.
To continue your delegation journey, I created a 18 minute video to show you the whole process. The development action plan process gets all employees working towards goals that benefit them and the company.
Watch the 18 minute Video: Develop High Potentials with Action Plans
(The video shows not only how action plans benefit your best performers, but also the average Jane and the lowest performer as well!)
So go ahead, give up something off your list in January and watch your people grow!
Most small business owners want two things from their business- a reasonable Profit for all their hard work, and the freedom to enjoy their Personal life (both in the business and outside it).
However, they often neglect the 3 other P’s that will create the Profit and Personal life they want.
To explain this concept, I created a formula:
Plan + Process + People = Profits —> your Personal life
You need to have all 3 P’s in this order:
- Planning— What are the Right Things? [the What]
- Process— What does Done Right look like? [the How]
- People — Do we have the Right People? [the Who]
Without Planning, people don’t know how what they do impacts your goals, so they are busy but not focused.
Without effective Process, you will have wasted effort, headaches and won’t deliver on your promises to customers.
Without the right People, you will be busy dealing with fires and drama, and trapped in daily effort to “manage” your people and customers.
—> You feel overworked, overwhelmed by your wish list of business improvement projects, and you feel guilty working long days instead of spending time with your friends and family.
Once you put the 3 P’s in place at your organization, you can transform into an organization with:
A Plan: when your staff know the “plan” and understand how they impact organizational goals, they work together as a purpose-driven team to improve and grow the business by delighting your customers.
Clear Process: when activities are standardized, clear roles and responsibilities are outlined, and key results are tracked to make informed decisions, this provides “autopilot” systems to run smoothly and scale easily.
Right People: when you have managers who build and coach a team of A-Players, you trust them to run the business and make decisions as you would.
This leads to your ultimate goal as a business owner:
- The level of Profit (financial security) you desire, and
- The Personal work-life balance you want … the freedom to do what you want, when you want to do it.
Discover Which Plan, People and Process elements are Roadblocks in Your Small Business
Take our 3 minute quiz to find out how your firm compares to high-growth and high-profit firms.
Article by Diana Southall
About the author: Diana Southall is the creator of the People Plan. She helps companies that are missing out on opportunities because the owner is personally involved in every sale or client.
I do it, you do, everyone (except the birds and bees) does it… spend time on the WRONG things.
Managers and owners spend our time coaching and training our People to be more focused, more effective, more productive… but are we?
As a fan and follower of Laura Stack (the self-proclaimed “Productivity Pro”), I was excited to read her latest book, “Doing the Right Things Right: How the Effective Executive Spends Time.”
She has a simple framework that outlines the 3 T’s — and is relevant for every People Coach (from to the CEO of a $1 billion firm to a small business owner with 5 people):
1. Thinking Strategically (Business)
2. Teamwork (Team)
3. Tactics (Self)
I call this Plan, People, and Process… and she has a nice breakdown of what a manager “should” be doing.
Get her book summary for free at this link: “Doing the Right Things Right: How the Effective Executive Spends Time.”
(There is even a self-assessment on pages 13-17 if you are up for the feedback!)
As the coach, you have to both set the example as well as personally focus on the Right Things for your team to be effective and successful.
“*Managing by Wandering Around” doesn’t work anymore! (*A great term coined to Tom Peters and still used today by many successful small business owners, who are unfortunately trapped in their business because their team relies on constant attention.)