3. Performance Liberation NOT Performance Management with Professor Steve McKenna

SPEAKER_02 0:05

Hello, and welcome to this episode of Ways to Change the Work Data with myself, Bruno Char. I love what I do. I'm a global leadership coach, a consultant, a trainer, a keynote speaker, a podcaster. I help you to develop your leaders, your teams, and I help you to optimize your organizational cultures. I'm here to help you find ways to change your workplace. Why? Because we spend more time in our waking days at work than we do with our loved ones. It has to be a good place to be. During this podcast, you can expect a mix of interviews with amazing thought leaders and then some solo episodes from myself as well. Get ready. First off, welcome.

SPEAKER_01 1:06

Thank you very much, Freena. Thank you very much. Nice to be here.

SPEAKER_02 1:10

Thank you. So your article has many, many points, and I've got lots of highlights all over it. One of the things you talk about is to rename the proof process of performance management to performance liberation. Can you talk to me about why we should rename this process first off and your thoughts on that?

SPEAKER_01 1:32

Okay. Well, just to go back a step, I guess, Prina, one of the problems, as you've indicated, you know, we're coming around to the sort of uh year-end uh cycle. Um, people may be uh going through their annual uh performance uh uh appraisals. Uh and one of the things that is becoming now um uh pretty obvious amongst uh organizations, businesses, corporations at the cutting edge of performance appraisal is that really the whole idea of the six-monthly or 12-monthly performance review or appraisal is really unfit for purpose. Uh, and for a number of reasons. Uh one reason is um many organizations now are thinking that what we need to do is to actually forward think uh rather than think about the past when it comes to talking to staff about um, you know, their work uh rather than just performance itself. So uh one of the problems we have with performance reviews, in my view, uh, is that it is really uh a sit-down event uh once every year where the manager desperately tries to remember how a person has performed over the last year, and the employee uh will be sitting there um, you know, also trying to remember what's happened. And the problem is that uh one of the issues really is to review the past uh is in a sense uh a little bit of a uh a mistaken way forward because we cannot do anything about the past. Uh and it assumes that if we uh if we look at the past, uh we can work with somebody as a manager to improve their performance in the future. But in the modern world, of course, the nature of things is changing on a regular basis. So the idea that we can simply translate what has happened last year, the future is going to be the same as the past, and we can therefore, you know, just look at that performance and change it for the future is simply not going to work in a world where things change very quickly, everything is fluid and dynamic. A person's objectives may change actually from one day to the next, depending on the circumstances that they're in. So what we've got really is a process that was designed for the kind of industrial age, yeah, where things were much more rigid, much more structured, much more kind of stable. Uh, and we're trying to use it in a modern digital world where it simply doesn't fit uh anymore.

SPEAKER_02 4:09

Oh my gosh. Okay, lots of questions for you coming up. So we're talking about a system that's looking at us uh in terms of past objectives and goals. So we're looking back in time rather than looking forward in time. That's one of the things you talked about. Things have really changed within the workplace, given you know, pandemic. And I think even without the pandemic, workplaces are working so much faster, and there's all sorts of disruption, and we have to just be even more quick to respond to changing needs. Yes. So, in light of that, you're saying this whole annual cycle process is not fit for purpose in that respect.

SPEAKER_01 4:49

That's right, it's it's not it's unfit for purpose, and and partly also, Prina, is it's unfit for purpose, ironically, in some ways, because it doesn't have a purpose. Um what exactly is the purpose of the annual review? Now, in theory, it is to help somebody develop their areas for improvement, and so in the future they can work better.

SPEAKER_00 5:12

Yeah.

SPEAKER_01 5:13

Uh, but what exactly is the purpose of that? And you know, there are other things to talk about here, but the connection, for example, between evaluation and and compensation and so on. But just to go back to the idea of anything in business has to have, in my view, a very clear purpose. What are we trying to achieve other than ticking a box which is we've done the performance review and now we can just carry on doing what we're doing? So uh so the idea that you know we have to start, we have to look very much at not only performance reviewers, but the whole performance management system, and ask the question: what exactly is the purpose uh of having a performance management system? Uh, and how does that relate to um uh individual employees? So, for example, you know, I'm I'm very much uh a believer in a strengths-based management or strengths-based leadership.

SPEAKER_00 6:12

Okay.

SPEAKER_01 6:12

One of the problems, you know, everybody has strengths, and I think the more that organizations spend time finding out what people's strengths are, you can enhance performance by enhancing a person's strengths. But I don't think you have the same impact if you look at people and want to discuss their weaknesses. Often people are weak or have areas because they don't like doing that, they're not very good at it, uh, and people work better when they have mastery over some aspect of their work. So I think part of performance liberation is to liberate people's strengths rather than managing their weaknesses.

SPEAKER_00 6:55

Yeah.

SPEAKER_01 6:56

And we can develop people, but if we develop people from uh from a position of weakness, what we get is move them to mediocre performance. If we develop people's strengths and offer them the opportunity to do is their strengths, then we can move to exceptional performance. Um, and I think that what we don't spend enough time doing in organizations is trying to liberate uh people's innate strengths that they feel good about, they have mastery over, uh, they like and enjoy doing, and to focus on trying to develop an area that we think needs improvement, uh, when somebody probably is not going to be particularly enjoying that, uh, they don't feel any mastery over it, it's not very stimulating. You know, what we end up doing is simply uh tinkering around, I think, with with performance uh in order to try to get somebody from you know poor to mediocre, rather than to focus on let's liberate a person's strengths, what are they good at, what do they want to do, and let's find ways to design work that actually leverages those strengths rather than you know um feature or focus on the disappointments that that often you know people feel when when they're the work that they're doing is not really um appealing to them.

SPEAKER_02 8:28

Very interesting points. Now, I I need to clarify for our audience as well that this is different to managing poor performance. That's a different process altogether. In this conversation, we're talking about our annual cycle of uh performance management. The name itself just gives people, you know, the heebie jeebies. And um, I have to confess, Steve, I'm one of these HR people who has who has um developed many a performance and development plan for many an organization. And having this conversation with you today has just made me thought about oh my gosh, there's so many elements that can be changed. Uh, to make the process a more positive process, and in your article, you also talk about um this line. Okay. So for the moment, it is enough to know that calling something a performance appraisal or a system, performance management, emphasizes that someone, the boss, will judge someone else's performance. Oh my gosh. So we are creating that positional hierarchy and that positional power structure already in the system without even thinking about it.

SPEAKER_01 9:42

Yes. I think the thing is when when a manager sits down with an employee, Prino, in in this kind of in this sort of conventional way, yeah, uh, it's probably it's often less to do about um some kind of assessment of performance. And it's really very much about a power relationship. Um, so the manager is in a position to judge, often not very well, because they don't have good data to hand anyway.

unknown 10:09

Yeah.

SPEAKER_01 10:10

Uh and so the process is often as political as it is rational. Uh, and in some ways, and there is an interesting literature out there about the fact that it's a bit of a game. It's a game. You know, it's a sort of negotiation. It's uh, you know, there's a very highly subjective element of it. And uh, you know, no matter how much we talk about, well, we need to, you know, uh train managers to overcome their uh unconscious biases and uh and subjectivity. We've uh we've been talking about that in the 35 years or so I've been in you know in the business of HRM, and nothing uh has changed. So, you know, so we have to find uh some new ways of doing things. And more importantly, I think at the fundamental level, what we have to do as HR people and actually as leaders in businesses uh is we have to challenge our assumptions about uh a whole range of HR things, but performance management. What are the assumptions that underpin what we do in performance reviews and in performance management? You know, we have to ask ourselves some questions like is this system really fit for purpose, or is it just we need to tick the box to say that everybody has sat down with their manager for a conversation that usually um uh avoids everything uh and uh and deals with nothing, uh and uh uh and then we just carry on. And I think that's one of the big issues with performance reviewers. You know, they they often avoid everything that needs to be talked about, uh, and they actually deal with nothing.

SPEAKER_02 11:54

Yeah, um, you know, because they've got that system or the paper to hide behind, so they just go through it in a robotic fashion and job done for this year.

SPEAKER_01 12:04

Yeah, and you will know as well as I do, you know, working in all kinds of organizations uh as an employee and of course as a manager and a leader, when you've myself I can speak to having gone through these exercises in the past as a let's just get this thing out of the way and get on with it. Um, and that's just a waste of time and it's it adds no value, it doesn't create value for an organization.

SPEAKER_02 12:31

Yeah. So uh another thing you talk about in relation to this current system and this current way of working, you talk about bangling the current lens and detaching rewards from evaluations also. Could you expand on what that means and what you talk about there, please, Steve?

SPEAKER_01 12:49

Yeah, uh one of the things that's uh built in, I think, to the kind of conventional performance review is we have to end up as a sort of manager or an organization with a kind of bell curve. You know, there's a there's a few here at this end that are good, there's a few at the bottom that are not so good, and everybody else basically is around the average. Uh but there's some really good research out there that tells us that essentially uh five to ten percent of people in an organization will probably be doing 400% of the work. Uh, in other words, you know, it's not really a bell curve, it's more of a sort of hockey stick.

SPEAKER_00 13:24

Yeah, yeah.

SPEAKER_01 13:25

Yeah, you've got everybody sort of here, and then at the end you've got a spike of people. Uh, and some of the research has indicated very clearly that most managers in organizations actually instinctively know who their best performers are. So when you look at some of the companies like Google and so on, they pay their high performers really, really well compared with everybody else, because they identify that it's a hockey stick, not a bell curve. You know, there's a lot of people that perform well, and then there's a few who are just hugely exceptional. So the problem with the whole performance review process and the ranking and rating is it's kind of inbuilt, is designed that it should be a bell curve.

SPEAKER_00 14:11

Yeah.

SPEAKER_01 14:11

And then and then when we do it, if if we even think about doing it in a in a meaningful way as a manager, uh, we end up being driven by, okay, I've got to create a sort of bell curve here. You know, I've got to identify a small small group that are not so good, I've got to identify a group that are good, but really everybody's gonna be in the middle. Um, and so the uh again, it's an assumption that we make. We assume that everybody is really gathered around the average, but when we start to look at it in detail, we find that actually that's not it. And that that's not the way that it happens in many organizations. You know, there are going to be those few people who are really performing, and everybody else is doing what they need to do for whatever reason. So, you know, so to begin with, the whole idea that we should start to think about this kind of ranking and rating around the middle uh is is is you know, and the simple issue here, Prina, is we we simply have to ask questions about systems like performance management, which test our assumptions.

SPEAKER_00 15:20

Yeah.

SPEAKER_01 15:21

You know, if we assume everybody's around the average, everybody will be around the average. Um, and so you know, we can only disrupt the kinds of things we do in HR generally or in performance management specifically, if we start to question those assumptions, yeah, and then beyond that innovate and experiment with some new ways of you know of thinking about performance.

SPEAKER_02 15:51

Yeah. Um, I want to ask you about innovations in a sec, but uh before I do, you also in this article you talked about values and behaviors and how within this performance and development cycle, how they too are subjective to be measured, really.

SPEAKER_01 16:10

Yes. Well, that's my view. I have I've had many conversations, of course, with people about that.

SPEAKER_00 16:16

Yeah.

SPEAKER_01 16:16

Uh and the another issue, of course, in my view, that's happened with performance and management management is you know, it started off, I think, being what's the connection between we can make between performance uh and doing a performance review and connecting it to compensation. And then somebody had the idea, well, we need to do more in a performance review, we need to think about rating people, yeah, but we also need to think about developing people. Uh so let's have two purposes. You know, the purpose is um their performance, the second purpose is to develop them, and then subsequently we've got now situations where, well, we have to also uh evaluate people on whether they are behaving according to our organizational values, yes, and then from that uh you get things like competencies, and then um, you know, what behaviors do we expect people to and so on. Now, all of those things to me are things which are very, very difficult to actually judge objectively. Now, that may or may not in in itself be a problem. I mean, I know people who think who ask the question, what's wrong with subjectivity? And and in some ways, you know, I I kind of uh have some sympathy with that argument. But you know, if an organization has a set of values, for example, respect or courage or you know, or excellence, yeah, who is the judge of that ultimately? And the judge of that is going to be the manager.

SPEAKER_00 17:50

Yes.

SPEAKER_01 17:51

So the problem is the manager becomes the arbiter of whether you as an employee behave in a respectful way, in a way, and and that opens up all kinds of can cans of worms, in my view, because it gives all the power to the manager. You know, if the manager believes you have not acted respectfully in your behaviors, um then you're in trouble.

SPEAKER_02 18:17

It's objective. Um very much so. And the other thing I have found, Steve, also with uh some organizations, you know, through my uh career thus far, is they'll have their uh beautiful sexy values up there, posters, whatever, but they haven't actually define the behaviors that sit beneath them. So the one that does my head in the most, a value of innovation. What the hell does that mean? Uh for example.

SPEAKER_01 18:48

Yeah, that's right. And sometimes to be innovative, uh, you have to be courageous. Uh and also to be honest, sometimes, you know, to be innovative in organizations that are sort of kind of a little bit um risk averse, much more bureaucratic, you're you're obviously going to be pushing in areas and sometimes pushing people to do things that they may not want to do. So, how then do we balance the need to be innovative or courageous and this issue about being respectful or uh and so on, you know? Um, and so we get into a very difficult area where um if an individual feels that you are being disrespectful, that perception then becomes very important. And I agree with that to some extent, but you know, who is to judge that? If every individual has the right to say, you've been disrespectful to me, then we are in a dangerous sort of area there because um, you know, it becomes then sort of uh sort of just it's a relativistic concept, yeah, you know, and the problem to go back to your initial point is I'm I'm not sure how we can accurately define a behavior such that it can be subject to some objective evaluation.

SPEAKER_00 20:15

Yep.

SPEAKER_01 20:15

And uh, and so that's why I think you know, when it comes to issues like values uh and so on, to include those into a performance review process is to me, it's a very problematic uh aspect. But one of the things I think that, you know, in terms of performance, the one of the problems also is just the use of the word performance.

SPEAKER_00 20:37

Yeah.

SPEAKER_01 20:38

When we look at organizations, I think what we need people to be doing in the work that they do is to uh create value, value creation. Yeah, and that's a much broader concept than performance, you know, and um, and so in the performance evaluation system or the you know, performance liberation system, we should be focusing on you know how do people working together create value for the organization? Yeah, because you know, again, the performance process tends to be individualized. Yes, and in organizations, you know, nobody acts alone.

SPEAKER_02 21:17

Yeah, yeah.

SPEAKER_01 21:18

Yeah. So even those you know, really high performers at one end, they wouldn't be high performers, you know, without the other sense, yeah. Yeah, the framework, the structure, the other people that exist in an organization.

SPEAKER_02 21:31

So and if we were to talk organizational culture now, this really talks to so hugely in that if we're talking about how I can add value to an organization, it shows that clear line of sight for me to how I fit into that bigger picture, because that's often the missing piece when it comes to disengaged employees, as you know, also. I'm disengaged, I don't know how the hell I fit in here, you know, all of that. So if we redefine. This whole process from the ground up, and based on you know our current assumptions, that would be really different. And to that point you made about values as well. I I've been uh I know of one organization I've been working with who have uh they have their values, but then they have rolled it out per every single team to work out what these signature values mean for you as a team. Because hello, the sales team, their definition of excellence compared to a customer services team's definition of excellence are two different things altogether. So then they they have that collective language with their manager to say, okay, this is what excellence means for me.

SPEAKER_01 22:45

Yeah, absolutely. Prina, I I agree with you. And it's uh to me, it's kind of uh you know, it's parallel to I I'm uh you know, I for me again, very importantly, I I believe that the the more things are decentralized, uh the the better uh it is. So, you know, if we take a society, I believe that democracy could should filter down to the lowest possible level, uh so people take control over their own lives. And I think in organizations it's exactly the same. To go back to your example, uh, instead of expecting every individual to conform to you know four or five values, and they're ultimately sort of uh judged by the bosses, if we give every team the right and the opportunity to say, okay, you're working as this team, perhaps on a project for a period of time, um, but during that period of time, you decide how these values, what they mean to you. Yeah, and that's absolutely um, you know, and I think that that is absolutely the way that we need to be thinking about uh how relevant the idea of you know values are. Because, for example, two people or a group of people can enjoy, you know, a word that's kind of important to me is uh in organizations, it's good to have a group of people who have banter with each other. Banter, you know, whatever you call banter irony or sarcasm. But sometimes people get together and they they do that instinctively.

SPEAKER_00 24:18

Yes.

SPEAKER_01 24:19

Now somebody entering that space might think, oh, you know, this is this, you know, you speak to each other in that kind of way. That's that's terrible. But of course, it works for those people who buy into banter as a value. Yes, you know, we enjoy banter, and and that's you know, it can be a sign of respectfulness, it can be, but if that group of people define it for themselves, then nobody else should come in and say, Oh, you know, you're not, you know. Um, so yeah, things like that are really important for organizations to experiment with and to uh and and to embrace.

SPEAKER_02 24:59

Exactly. When when I'm talking with a lot of my clients who are CEOs, I often ask them, and it's you know, about us changing our language as consultants, also. So one of the questions I ask them when I'm working on these kind of things is how would you like your employee to act like the owner of the organization? That then just changes their mindset altogether, and it's questioning assumptions, you know, in the respect that you're talking about.

SPEAKER_01 25:27

Yeah, absolutely. Absolutely, and that's uh, you know, that's the whole questioning assumptions, of course, is really part of that whole double loop learning process, which um you know we we can only really learn uh in a double loop rather than a single loop way when we actually ask questions about what assumptions are we making on which we are basing our actions and decisions. And there are so many opportunities to do that in organizations, you know, to just to embed the questioning of assumptions into the way in which uh not not only managers, but obviously employees as well uh go about doing their work. Uh there are so many things that are hidden, you know, so many elephants in the room in uh in organizations. Um, and um, you know, a few years ago when I started my corporate career, if I can just tell you this little story, I used to uh I was very influenced by the work of Chris Argeris, who is an American you know academic uh at Harvard, and um he developed this little uh strategy which basically was left-hand and right hand uh thinking. And he said, you know, um, and I watched him once uh um facilitate a session, a board session, and uh when I was in the US, and he um basically a line down one side of the paper on the left hand side, which is what was actually being said, uh, or what exactly an individual said, and on the right hand was what they were thinking. Um and the really neat, yeah, it's a very simple uh challenge, but of course, what they were saying was very different from what they were thinking. Uh, and his point to the you know, in that facilitated session to them was you need to find a way of saying what you are thinking, yeah, uh, rather than saying what you think you should be saying. And uh, and basically that was the whole message there was about questioning assumptions.

SPEAKER_02 27:30

Brilliant.

SPEAKER_01 27:31

Let's get things on the table that need to be talked about rather than constantly trying to find a way of you know circumventing them and this kind of stuff. Yeah.

SPEAKER_02 27:42

Steve, have you seen or do you know of any case studies or organizations who are doing things differently in terms of performance liberation? So you've talked about that hockey stick uh from Google. Uh, any other examples or case studies you may have?

SPEAKER_01 27:57

Yeah, well, there are a lot of things that are happening in um in organizations that are, you know, as you'd expect, state of the art, you know, the big companies, the Googles, the General Electrics, the Gaps, and so on. Many things that companies are doing now, which uh obviously HR technology is is becoming increasingly important. And we've moved on, you know, when it was obviously only HR payroll that was uh using technology. Now, pretty much everything in the HR space is is open to technology. And so some companies now are uh are using apps and technology to gather uh real-time data on performance. So a very simple example is if uh an employee is giving a um a presentation, um, immediately after that presentation, people who are in the audience can obviously use an app and they can grade that presentation immediately. You know, it was a great presentation, your slide deck was fantastic, whatever it is.

SPEAKER_00 28:59

Yeah.

SPEAKER_01 28:59

So what are uh and in organizations, it's basically obviously it's called crowdsourcing. What we are doing is from as many touch points as possible, we are getting feedback on what people are doing as they are doing it or just after they've done it. Yeah, so you have a team meeting and people spend you know 20 seconds, great team meeting, good input from and this kind of thing. So, what you're doing, instead of of course having this annual review where nobody can remember anything that happened, you know, a week ago, let alone a year ago, we've got data that's being collected all the time in real time. So, you know, it's part of this whole data analytics thing where we can gather information about somebody's performance immediately. They know what it is, they can see it, and they can you know instantly sort of so you've got a kind of real-time coach, really uh partly through technology, yeah, but also, of course, you know, the the and and the older feeling, you know, people have got to be regularly conversing with their bosses, they've got to be talking about things on a you know coaching level, yeah. But the really important thing today is how, and it will become more important as it is in HR uh generally, you know, technology, the use of technology, the use of apps and so on in the collection of data about performance uh is really you know going to be important. And it does two things. One, you know, I still emphasize the importance that strengths, we need to focus on strengths and developing them in the future rather than developing weaknesses from the past. But secondly, yeah, we kind of democratize the process of performance management by giving people the apps, and so everybody is, and not in a critical, necessarily a critical way, sometimes just in a playful way, but all of the time collecting data about how people are performing.

SPEAKER_00 31:03

Yes.

SPEAKER_01 31:03

Uh, and instead of waiting for the boss uh to sit down with you and tell you what you're doing wrong, which is of course usually what happens, people come out of performance reviews feeling pretty demoralized generally. Uh, we actually are allowing everybody to have an input, um, you know, which is which is kind of 360 degree, but technologized.

SPEAKER_02 31:24

Yeah.

SPEAKER_01 31:24

Made more relevant, more immediate.

SPEAKER_02 31:27

And so timely, exactly. And you talk in your last paragraph, you talk about um the culture of continuous improvement and uh the whole employee experience. This is we're talking employee experience now, it's the whole life cycle of the employee is that continuous improvement element. And me, if I was you know, in a workplace again, in a corporate job again, I would like that continual feedback rather than you know the formalized once every year or once every six months. You need that, especially if you're gonna keep up with the pace of change.

SPEAKER_01 31:59

Yeah, absolutely. And from and the the most important thing, uh again, another important thing for me, uh Prina, is that we should prevent poor performance, not try to cure it. Uh, you know, and we prevent that through ensuring that the employee experience, the employee journey is positive. So, for example, research tells us that uh if a person has a very bad onboarding process, uh, they are likely to leave the organization within six months.

SPEAKER_00 32:31

Yeah.

SPEAKER_01 32:32

Uh so you know, and that's everything from before they're an employee, you know, how they're treated during the you know, interview process and so on, and how companies now, and they still, and certainly here in you know, everywhere in the world, but I've come across just talking to a lot of people who are in the job search process, you know, they get no feedback, no contact at all from an organization, you know, and so these are very simple things that can be done, and they create, they're of such huge reputational value for organizations. Um, you know, uh, and uh it's amazing that uh small things like that, which are part of the employee experience, even if you're not hiring that person, uh, are so important, you know. Um, and so you know, poor performance can be or or you know, below power performance can be uh uh can be prevented if we start to focus on the whole of this employee journey, you know, and uh so that a person feels a sense of belonging right from the beginning.

SPEAKER_00 33:38

That's it.

SPEAKER_01 33:39

And even if they are rejected, they still think, well, that's a that company contacted me and gave me great feedback, you know.

SPEAKER_02 33:46

So that experience stays with you, yeah. And people talk, yeah, yeah. Through reviews online, through glassdoor reviews, all of that, and the company's reputation, brand, the employee value proposition, all of the above, all of the good stuff. Okay, yeah, yeah. I think we need to have another conversation. I'd love to catch up for a coffee another time. But before we finish, I have one question that I ask everyone, Steve. If you had a magic wand, what is one thing you would do to change the way of the workplace?

SPEAKER_01 34:21

Uh this is probably not entirely controversial, but I would democratize workplaces. I would get to, you know, all kinds of as we talked earlier, get everything as much as possible down to the team level because you know things get done in organizations ultimately by teams, not by individuals. Yeah, you know, people working together is what creates value. And uh so my you know, my I would say, you know, democratize workplaces uh as much as is absolutely possible, uh, and uh and give uh the feeling that uh, you know, and enhance belonging through people's sense of being in control, mastery of their their working environment.

SPEAKER_02 35:14

Beautiful. Thank you so much for your time, Steve.

SPEAKER_01 35:18

Not a problem.

SPEAKER_02 35:19

And if anyone wants to get in touch with you, I'll put all of your details in the show notes. Um and other conversations to be continued.

SPEAKER_01 35:28

Okay, we'll catch up soon.

SPEAKER_02 35:30

Absolutely. Thanks for tuning in. Check out the show notes and join my Ways to Change Your Workplace Facebook group. It's full of useful material. Ciao for now.