Tag: Performance Reviews

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Breaking news (well, yesterday actually)! Accenture, one of the world’s foremost professional services firms, is getting rid of the annual performance review. I applaud this move and think it is truly a forward-thinking, momentous event for Corporate America. Congrats to them and I wish them well. Such a move will surely have its growing pains (How do you ladder? How do compensation reviews/raises work?), but I believe it will save tons of operational and system administration time. Wait and see, I suppose? Or pull the parachute and get over to Accenture if you’re in that industry ASAP?

Til Next Time,

Michael

I’m reading a great book right now titled The Why Axis, which explores the concepts of causality versus correlation, the role of nurture in modern society, and generally how incentives can (and should) be used or revisited to garner the maximum effect.  Anyway, it has started making me look at things like incentives in a different way.  I think the lessons, theories, and conversations they expose are extremely useful for us to consider even in our own lives on the micro level.

Truth be told, I have always been extremely fascinated by incentive structures (both positive and negative incentives).  I think the ability to drive performance, productivity, and throughput through variable means  (financial or otherwise) is something that is extremely fascinating and something that many industries are honestly doing a really poor job with currently.  Take my own contract for instance – I largely do not have any major incentives tied to my performance so there is not a major fire beneath me to go wildly above and beyond the call of duty.  The only “carrot” so to speak is the opportunity to advance my career/position quicker (but, at many companies, the body of work completed or performance against target is far from a guarantee of quicker advancement).  Otherwise, the variable compensation tied to my role is largely in line with most professional services firms and won’t sway my overall income more than 5-10% in a given year.  I have long held, though, that the professional services industry has a tremendous opportunity to model itself more closely to the contracts of professional athletes from an incentives and compensation package structure perspective.  Think about it – how great would that be?

If my contract were more similar to a professional athlete, it would open up so many doors.  Namely, I would be able to:

  • Participate in a “corporate combine” which would allow me to display my skills and work to prospective suitors
  • Attend “draft day” events which would allow for “teams” (i.e. companies) and “prospects” (i.e. college graduates, those who are in-between contracts, etc) to mingle and celebrate leading up to the “draft” where teams fill out roster spots for open needs
  • Negotiate a guaranteed salary figure that I know I would receive independent of performance (except for gross negligence of conducting myself in a manner expected by my company/contract – similar to when athletes can nullify contracts by getting into motorcycle accidents which prevent them from being in the lineup)
  • Have a larger variable component of my salary that is provided as an incentive for hitting certain performance targets or kickers listed in my contract (i.e. spot bonuses or incentives when I exceed a given target, metric, or goal)
  • Select an agent that would help negotiate my contracts and define performance incentives that drive my own productivity (presuming they are proper motivation for me – money or otherwise)
  • Enter contract years (i.e. the years where my contract is set to expire) with a renewed passion because I know my next contract is on the line
  • Propose or take part in trades or package deals in order to align myself and my performance with colleagues/teams/companies I work well with (or to simply navigate myself to a different part of my company or another company altogether)
  • Implement a “No Trade” clause which would allow me to have a right of refusal on my company trading me to another location/company that was not preferable
  • Obtain endorsements or sponsors (third party) that would back myself, my team, or my company (i.e. Lenovo chooses to pick up my team for our next three-year deal and provide us with latest laptops in exchange for our brand ambassadorship)
  • Allow for companies to participate in a waiver process where “dropped” resources could be claimed off the wire and given short term deals
I will let you know if The Why Axis leaves me with any groundbreaking discoveries in the Incentives space.  I thought it appropriate to share one of my own compensation/incentive schemes with you in the short term though as food for thought.  What’s holding us back from modeling salaries and contracts in Corporate America more like athletes’?  I do believe that it is way too risky for most people, but there are always those players that take a substantially less amount of money to ensure that they are guaranteed and locked up for a long time.  I really think it is something that could work and start to create a renewed sense of competition for the modern age.
 
Til Next Time,
Michael

It’s that time of year again!  The time when most of us look forward to haphazardly rewording all of this year’s accomplishments to fulfill our obligation to perform our annual reviews.  It’s always a bit of a race (for me at least) and generally something we all resolve to do a better job of throughout the year (and, subsequently fail to deliver on by the time February rolls around).  But what if it didn’t have to be this way?

A very good friend of mine works at a startup.  They don’t have a formal performance appraisal process.  No year-end reviews, calibrations, roundtables, or personnel profile edits to make.  No application to update with highlights and no dashboard with their personal Key Performance Indicator results.  I don’t even think they have KPI’s; they have “Total Sales”.  On one hand, they have made a conscious effort as a company not to bog their employees down with these sorts of reviews and deemed it as something they manage on a recurring basis throughout the year (i.e. rewarding success and reprimanding failure).  On the other hand, the employees don’t have much to look back on in terms of a “year in review” unless they complete it in silo.

I, conversely, work at a massive company with over 100,000 global employees.  We have applications and processes to manage our annual performance reviews.  We have a timeline of year end review activities to complete with our mentors and our management, and a multi-layered evaluation form we are called to complete which aims to provide a holistic view of our accomplishments and progress across the full spectrum of defined functional areas our company has designated as relevant for assessment purposes.  We have KPI targets; our scores are tracked against the goals.  Each year, I PDF my annual review and archive it so I can more easily update my resume so I am not losing sight of everything I have accomplished.  But, truth be told, the process is largely extremely painful and the last thing I look forward to doing heading into the holidays (let alone the fact that I am responsible for presenting my counselees reviews in roundtables as well – an added layer of accountability and yet another speedbump in the race to the New Year).

So – which company is doing it right?  What if I told you it was neither?

I honestly think it’s time to completely scrap the traditional performance appraisal process.  And, time to get anyone who isn’t managing performance more proactively on board with a new school of performance management thought.  I firmly believe performance management is something that should be done on a rolling cycle.  Don’t wait til the end of the year – reward people for positive performance WHEN IT HAPPENS.  Also – take the opportunity to coach and learn from mistakes in real time (again, not waiting to align it with a formal review cycles).

I have helped develop performance management systems for clients in the past, and the one thing I have found to be “stickiest” is giving an employee ability to see their metrics in real time.  Coupling that with a holistic set of accurate and meaningful KPI’s that are within an employee’s control is the perfect potion to drive the needle in key functional and technical business measures.  I think often times, though, senior leadership focuses on the wrong metrics to drive results, and they are largely unable to clearly identify for employees how their individual contributions bubble up to drive top-line corporate initiatives (if they even relate at all in the first place).

I wish I had the right answers in terms of which metrics work in which industries at which sizes of companies.  I don’t have that though.  But there is one thing I know for sure – if members of the senior leadership teams are not all on board and don’t believe in performance management as a tool to make employees feel more valued and drive results, it’s a waste of time.  Strict performance management protocols, when they become a chore rather than an activity everyone enjoys doing (i.e. ongoing rewards and recognition programs, spot bonuses, appropriate celebrations of successes), they will garner much resentment from the front-line and never ultimately yield the originally intended result.

Til Next Time,

Michael

So you’re ready to get to the next level?  Prepared to climb the next rung in that corporate ladder?  That’s fantastic.  Let me caution you, though.  There are a host of things to consider when preparing for this kind of step.

Without beating the point to death (and ultimately trying to make an argument that rank progression is not in anyone’s best interest), here are a few of the key questions I’ve asked myself when moving forward with any rank progression:

  • Are you ready for the increased responsibility?
  • Do you have a solid case for promotion?
  • Are you going to be compensated appropriately?
  • Is this progression in line with your personal and professional goals long-term?

Everyone gets ready for these kind of moves at different rates.  That’s why I have never liked the companies with hard line “up or out” policies.  You can’t brainwash personal advancement and readiness for next level of leadership into someone.  And, for those who may fall behind the proverbial curve, that doesn’t mean that they are poor resources or should be fired off.  Everyone has a place, from the janitor to the CEO.  We just have to instill more awareness to everyone’s contributions while at the same time making sure that everyone is avoiding stagnation.

As usual, hope you enjoyed it…

Til Next Time,

Michael

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