Tag Archive for: performance management

Clinton vs. Trump: Two Alternative Approaches to People Management

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From FBI investigations to opinion polls and some unfortunate word choices, American Presidential hopefuls Hillary Clinton and Donald Trump are filling the column inches and keeping the world’s media on its toes. One article caught my attention last month and sparked more than a little curiosity about how they each run their campaigns. I’m not talking about the merchandise-laden tour buses and charged debates, but the experts, aids, and volunteers bustling about behind the scenes.

In 2012, Ann Marie Habershaw – the COO behind Obama’s 2012 reelection campaign –  revealed that hiring practices among staffers were, at best, ad hoc. She was responding to a Tweet from Nathaniel Koloc, then CEO of recruitment firm Rework. She told him that department heads often make hiring decisions on the fly, and campaigns are inevitably run by friends of friends and talent sourced through word-of-mouth.

As though to prove her point, three years later, Habershaw mentioned Koloc to Clinton’s deputy COO, who called to offer him the position of Director of Talent Acquisition and Development on the Hillary for America campaign. That makes Clinton’s outfit the first major political campaign to have a role dedicated to people management and talent sourcing¹. An interesting move, don’t you think?

Which got me thinking, what can we learn about people management from these two very different candidates?

Clinton

25 seconds in, learning from criticism. 3.29, expressing her opinion and identifying problems without micromanaging the solution. 5 mins in, importance of compromise for progress.

Team and Hiring Style

The first female nominee is known for her close inner-circle. Many of the major players on her staff have been with her since she was First Lady, and she has retained a number of employees from her time at the State Department – not to mention some notable names from both husband Bill’s and President Obama’s campaigns².

This tried and tested team have proven they can handle anything a Presidential election might throw at them, but Hillary has also future-proofed her staff. Her established team is joined by new hires with more contemporary skill sets, like Marlon Marshall, who is known for his alternative approach and willingness to operate contrary to established Washington precedent². Interestingly, it’s an attitude mirrored by campaign manager Robby Mook, who worked with Clinton on her 2008 campaign.

Personality

The thousands of work emails now available to the public reveal a lot about Clinton’s character and how it translates to her management style.

Performance-oriented Clinton is happy to circumvent time consuming, official procedures when she judges them irrelevant. For example, when waiting to receive a statement which lacked any sensitive information but had been classified top secret, she instructed the sender to simply email it directly (and against protocol), ensuring the document was available there and then without delay.³

“Take criticism seriously, but not personally. If there is truth or merit in the criticism, try to learn from it. Otherwise, let it roll right off you.”4

Source: Huffington Post

Management Style

There may be no better way to define Clinton’s management style than with her own phrase, ‘smart power’. It encapsulates the need to learn and adapt to new situations in pursuit of the best possible outcome⁵. A practice reflected in her team, who embody a mixture of experienced and unconventional thinking.

Throughout her public career, Clinton has championed training and skills development.

In a primary debate in 2007, she advised against contracting out government jobs, an expansion of her 2006 idea to form a ‘public service academy’. Much like a military academy, this theoretical institute would train civil servants for free in exchange for a set number of years work. It’s a management approach that offers benefits at both an individual and organisational level, the organisation in this case being the USA⁶.

Defining Principles

  • Compromising
  • Manages to strengths
  • Performance orientated

Trump

On being detail orientated (1 min 32 in), 2.50 attitude to employee performance.

Team and Hiring Style

The Republican nominee launched his bid for The Oval with a very small team. Including long-time advisors Roger Stone and Corey Lewandowski, his initial staff had little political experience and were later joined by communications and foreign policy teams that, again, consisted of strategists and consultants with little or no experience in the political arena⁷. Trump opted for those he knew and trusted from his years in industry rather than new faces or unknown experts.

However, as the election gained momentum, Trump’s hiring policy changed in response to the developing needs of the campaign. Established political consultant Paul Manafort came on board, bringing with him over 30 years experience in presidential politics. At the same time, those in Trump’s team with political backgrounds were promoted, and the campaign strategy took on a more traditional approach, with Manafort introducing teleprompters and speechwriters⁷.

Personality

Intuitively driven, Trump is not a manager bound to the status quo. He is known to base his hiring decisions on gut reactions, and places greater emphasis on potential than experience.⁸ It’s a focus reflected in his initial campaign team, picked for their skills rather than their experience in the political world.

“Management is an art that is very important to me. Having leadership skills and employees that love their work is one of the great joys of life.”

Source: Sullivan and Costa, 2016. In campaign chaos, Trump shows his management style. The Washington Post.

Management Style

As a manager, Trump has high expectations. He leads by example, working around the clock and expecting his employees to do the same⁸. He also cultivates a competitive environment, actively encouraging rivalries even amongst high-level employees like Manafort and Lewandowski⁹ (those of you looking for another approach to aligning employees with organisational outcomes might want to check out my recent article, Aligning People: A Leader’s Greatest Challenge).

Trump has a well-founded belief in his abilities, appears very resilient to criticism, and is confident that his approach is the best.ⁱ⁰ He doesn’t delegate big decisions and takes personal responsibility for the outcome of projects in all fields⁹. It’s an exhausting style of management, and not one many could successfully emulate, but it is fantastic for achieving huge successes and is the reason he can deliver on projects that would be unattainable to other managers.

The best example of this is his campaign, which has taken him from a candidate with no elected experience –– not even running experience – to a nominee; a victory that has only been achieved by a handful of men, most notably Herbert Hoover and William Howard Taft¹¹. In the light of this success, his claim that he is a quick learner¹² seems well founded; and clearly he expects the same from those around him. When the campaign hit a snag in March, it was Lewandowski who hired Manafort and his company of politically savvy aids to put it back on track¹³, demonstrating a penchant for agile learning in Team Trump, with senior staff continually assessing performance, identifying missteps, and adjusting their strategy in response.

Defining Principles

  • Intuitive
  • Hierarchical
  • Performance orientated

To sum up…

Trump’s experience in industry and Clinton’s decades in Washington have created two very different managers with two very different approaches, but they both have two values in common: performance and agile learning. Only time will tell which management style is the best suited to the political arena but I, for one, cannot wait to see the outcome.

What are your thoughts on these two approaches? How would they translate to your organisation?

References:

¹Krueger, 2016. How the Hillary Clinton campaign built a staff as diverse as America. Fast Company.
² Anon. 2016. Hillary Clinton presidential campaign staff and advisors, 2016.Ballotpedia.
³ Klapper and Lee, 2016.What we learned from 52,000 pages of Hillary Clinton’s emails. PBS.
⁴ Sanghoe, 2015. 5 important leadership lessons from Hillary Clinton. Huffington Post.
⁵ Shambaugh, 2010. Leadership secrets of Hillary Clinton. Forbes.
⁶Katz, 2015. What a Hillary Clinton presidency would mean for the federal workforce. Government Executive.
⁷ Anon. 2016. Donald Trump presidential campaign staff and advisors, 2016. Ballotpedia.
⁸Kruse, 2016. The executive Mr Trump. Politico Magazine.
⁹Sullivan and Costa, 2016. In campaign chaos, Trump shows his management style. The Washington Post.
ⁱ⁰Gaskell, 2016. 4 Leadership lessons from Trump. Forbes.
¹¹Raunch, 2015. Amateurs in the Oval Office. The Atlantic.
¹²Dickerson, 2016. How fast does Donald Trump learn? CBS News.
¹³Moussa and Newberry, 2016. What we can learn from Donald Trump’s campaign reboot. London School of Economics (US Centre).

Talent Management Rankings: Our Kind of Olympics

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With Rio in full swing and the country getting competitive, what better time to take a look at the all-stars dominating our favourite sport, Talent Management? Time to find out who won big in the categories that really matter; Onboarding, Performance Management, and Learning Management.

 

Talent Management rankings - Medalllists

Gold

Those of you who read my article on onboarding and employee success will know that well-designed onboarding practices are key to ensuring new hires integrate quickly and perform at their best. Amazon-owned retailer Zappos took the gold in this category for its focus on protecting and promoting company culture above all else.

Landing a job at Zappos isn’t easy. The retailer puts the same emphasis on personality and cultural fit as skills and experience, applicants have a 1.5% chance of receiving a job offer¹. But an offer doesn’t mean new hires can breathe easy. Whatever their level or department, everyone goes through the same four week course, receiving extensive training in customer service and company values².

At the end of the four weeks, new hires have two options; head to the office and get started, or take a $2000 payout and leave if they don’t fit the company culture. Less than 2% opt to take the money and run³, with 98% starting work on Monday engaged and committed, knowing exactly what to expect.

Silver

Facebook scooped silver for an onboarding process that is fast and engagement focused. New hires arrive to find their requested PCs, personal devices, and systems all set up and ready to go; but it’s the developers’ boot camp that really won the day for the social media goliath. Developers aren’t hired for specific teams and departments. Instead, they spend six weeks training at HQ and get to choose which department to work in when they graduate⁵, cherry picking the projects that most excite them.

Bronze

These guys are secretive, but rumour has it Apple is a find your own feet kind of employer. New hires are greeted on their first day by any specialist tools they need, a new iMac, and a t-shirt with ‘class of’ and the year of joining. They are expected to dive right in, set up their own computers and introduce themselves to co-workers⁵. It isn’t for everyone, but this ‘do-or-die’ approach certainly means employees hit the ground running.

Talent Management rankings - Medalllists

Gold

I’ve spoken before about Google’s performance management process, so it should come as no surprise that it romped home in first place. This well-deserved gold was awarded for the search giant’s extensive research and the resulting unbiased, 360-degree performance management processes.

Google’s research into employee performance identified two main factors influencing success; clearly written goals, and frequent conversations between individuals and managers⁶. These findings form the basis of a complex, 360-degree feedback cycle that begins with self-evaluation before peers review an individual’s fit with the company culture (a.k.a Googleyness), analytical abilities, execution, thought leadership, leadership, and presence. Peers grade based on strengths, weaknesses, and contributions⁷.

This feedback is used by managers to provide a draft grade, a non-numerical evaluation on a five point scale that ranges from ‘needs improvement’ to ‘superb’. All performance data then goes through a calibration stage, where heavy-handed or lenient graders are identified and employee scores adjusted⁷; giving employees an accurate, unbiased view of their performance.

Silver

Beauty subscription service Birchbox has a dedicated People & Culture team that manages the complete employee experience, with a focus on aligning individuals to organizational goals⁴.

Bi-monthly pulse checks and two yearly, quantitative studies mean they can guide managers and board members on how best to align employees and skills to developmental strategy and initiatives⁴. This integrated approach to business growth and performance management was well-deserving of a silver medal, don’t you think?

Bronze

Goldman Sachs is breaking the mould with its recently overhauled performance management system. Designed to improve staff retention, the Wall Street stalwart has swapped its traditional numerical grading system (complete with automatic layoffs for the bottom 5% of performers) for a qualitative approach almost unheard of in the financial sector⁸.

Now, the focus is on providing high-quality, continuous feedback. Reviews are conducted earlier in the year, giving individuals a chance to improve before bonus time⁸. To reduce grading bias, the new system even uses a similar calibration method to Google⁷.

Talent Management rankings - Medalllists

Gold

Global consulting firm Cognizant was streaks ahead of the competition and landed gold for its Millennial-friendly approach and focus on integrated learning.

With a predominantly Millennial workforce⁹, many who work on-site with clients, the Cognizant learning and development (L&D) strategy needed to be agile, mobile and engaging. The company rose to the challenge, producing multiple learning platforms such as blogs, customized portals, live webcasts, and discussion forums⁹. But the jewel in its L&D crown is ‘One Cognizant’ an app store boasting over 50 learning apps. From gamification to ebooks and progress planners, individuals can choose the tools best suited to their learning style⁹.

Recognising that L&D is an essential element of organisational grown, Cognizant’s ‘5D’ approach to content focuses on aligning learning with long-term objectives. The senior team establish organisational goals first, identifying potential impediments and their solutions, and provide a mix of informal, formal, and collaborative learning initiatives that enable staff to deliver on those goals⁹.

Silver

Like Cognizant, silver medal winner Hilton Worldwide delivers a suite of learning tools to a global workforce. Its L&D strategy is focused on maximising employee performance with self-guided tutorials, interactive workshops, one-to-one training and courses. Learning is typically tailored to the needs of the individual, with employees identifying their own skills gaps and receiving the training and support they need to address themⁱ⁰.

Bronze

Healthcare provider Virgin Care has recently been shortlisted for the Employee Engagement Award thanks to its ‘People Flourish’ learning management system. In a sector known for its apathy to learning and development, this revolutionary program provides staff with leadership training; delivering four modules on people, personalities, and behaviours that are designed to help individuals progress to management positions. It’s an investment that’s paying off, with the program delivering a 22% increase in employee retention¹¹.

To Sum Up…

The tech sector dominated our talent management competition, scooping gold in both the learning and onboarding categories. However, we’re already starting to see Silicon Valley’s innovations trickle into more traditional sectors, as demonstrated by both Goldman Sachs and Virgin Healthcare. These guys are rejecting the typical model of Talent Management in their industries and are already reaping the rewards. Let’s hope more employers follow suit – by 2020 this is likely to be a far more hotly contested race!

Any ideas here you could borrow? I’d love to hear your thoughts on these approaches. Would any work in your office? See an Onboarding System your new hires will love.

References

1Michelle, J. 2011. The Zappos Experience. Inc.com
2Zappos. 2016. Onboarding Fact Sheet. Zappos
3Reynolds, 2016. 3 Companies With the Most Unique Employee Onboarding Process. TinyPulse.
4Doshi and Gregor. 2015. The secret to an ideal work culture. Time Magazine.
5Bhattacharyya, 2016. Employee Onboarding at Facebook, Google and Apple. The Qustn Cafe.
6L&D, 2016. How performance feedback is evolving. L&D.
7QCulture, 2015. Google’s Performance Management Practices. QCulture.
8Shen, 2016. Goldman Sachs is about to make life a bit less stressful for employees. Fortune.
9Meister, 2014. Cognizant Academy: Lessons from a 2020 Learning Organisation. Forbes.
10Association for Talent Development. 2014. Hilton Worldwide. ATD.
11Virgin Care, 2016. Virgin Care Shortlisted for Employee Engagement Award. Virgin Care.

Should You Drop Performance Ratings?

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Performance management is undergoing somewhat of a revolution. In some circles, the argument is being made that the six-month or annual review provides too little information and is too late in coming.

Performance ratings

While most companies don’t rely solely on formal performance rating meetings to provide one-on-one feedback, a number of company leaders posit that ongoing feedback could actually replace the annual review entirely.

Is there a case for change?

Based on a series of public announcements, a consensus amongst a number of well-known organisations seems to be emerging: performance reviews can be too retrospective, too infrequent, and vulnerable to bias on the part of the rater. In today’s real-time working culture, undergoing review only once a year could be far too infrequent to be effective.

Recently Adobe, Accenture, Deloitte, and other major players announced ‘scrapping ratings’ in favour of departing from the performance review to the performance prediction.

Deloitte’s1 research revealed that “more than half their questioned executives (58%) believed their current performance management approach drove neither employee engagement nor high performance.”

Additionally, rather than providing an accurate index into the employee’s job performance, evaluations were found to be somewhat more indicative of the knowledge and psychological peculiarities of the raters themselves. That data bears out:

A survey published in the Journal of Advanced Psychology2 found that of 4,492 managers rated on certain performance metrics by two bosses, two peers, and two subordinates, 62% of the variance in ratings was due to the raters’ personal biases. Actual performance only accounted for 21% of the variance. That translates into a vast range of opinion in what should have been a relatively objective rating process.

Then there is the problem of ‘sugarcoating.’ Knowing the employee in question will be privy to their result, and that a rater will have to discuss and possibly defend their comments, tends to put raters in the position of being overly generous rather than realistic.

New Talent Pool Demands New Solutions

As millennials crowd the workforce (they will comprise 75% of the world’s workers by 2025) the need to work with, rather than against, this demographic is crucial. Millennials are accustomed to real-time gratification. They’re driven by feedback that’s both ongoing and encouraging. A recent survey by Intelligence Group3 shows their priorities:

Millennials infographic

Millennials may be more forcefully expressing it, but they want what all employees want: feedback that is thoughtful, helpful and productive, and in real time.

According to a Fast Company4 survey millennials aren’t shy about their disdain for evaluations:

Disdain for performance evaluations infographic

There is an emerging trend by organisations to replace or modify their rating systems. The number of employers that are either changing the numerical rating system or giving up on evaluations altogether is growing. The trend has increased from 4 percent in 2012 to 12 percent in 2014, according to a Corporate Executive Board (CEB)5 survey of Fortune 1,000 companies.

Rebranding ratings

It would be more wishful thinking than reality to believe there are no ratings needed or being enforced in companies. Certainly the different categories, pay ranges, and levels of responsibility effectively “rate” staff to a large or small degree, whether we want to admit it or not.

While Deloitte may no longer reduce a year’s work to a percentage score, they still needed to find a way to recognise excellence and adjust poor performance. Their solution:

Rather than measuring opinions about what happened, they now ask for predictions and opinions about what will happen (or ought to happen) in employee’s future. They ask only 4 questions: the first 2 are rated 1 through 5, and questions 3 and 4 are simply answered yes/no:

  1. Given what I know of this person’s performance, I would always want him or her on my team.
  2. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus.
  3. This person is at risk for low performance.
  4. This person is ready for promotion today.

Questions are posed as part of a survey at the conclusion of each project rather than at the end of the year. The new process, called the “performance snapshot” evaluates at a single moment, rather than the culmination of a year’s work.

Ensuring Evaluations Remain Fair

The organisations mentioned in this article believe that eliminating yearly reviews in favour of a more ad-hoc approach will actually improve – or at least not degrade – the accuracy of the evaluation. However, for anyone looking to adopt a similar approach, it seems wise to include measures that will ensure evaluations remain fair.

Alastair Woods, PwC’s reward team director, summarised this succinctly:

“6Companies need to be careful not to throw the baby out with the bathwater. Without the year-end rating, the danger is that the distribution of pay and bonuses can become even more of a dark art as shadow systems evolve without proper governance and infrastructure behind them. Our research shows that when done well, with a balance between rewarding past performance and considering future development needs, performance conversations can really motivate employees. And many employees appreciate the clarity that an effective formal assessment provides.”

Enhancing Performance Ratings with Real Time Feedback

I don’t believe that removing ratings is where the change needs to occur; rather we need more regular and real-time feedback and coaching conversations. And so it’s interesting to note that Deloitte has introduced their own version of Adobe’s “check-in’s” for their teams.

Check-in conversations are the team leader’s responsibility: they meet with team members to review projects, set expectations, provide coaching and more. The meetings are initiated by team members, giving them ownership of their development. HR merely monitors that meetings are held weekly.

Adopting Agile Performance Management

The check-in system, or other methodologies like it, shows significant value in terms of real-time, usable feedback that enhances productivity, engagement, and ownership for employees. When used to augment the annual/bi-annual review system, these solutions can provide staff and team members with an open line of communication that’s based on trust.

Conclusion

Overall, it’s not rating employees in the purest sense that should be avoided. The shift in thinking is to work in real-time to achieve goals and growth, rather than reflect on (and punish) past performance that cannot be changed.
There is definite cause to re-evaluate the effectiveness of existing annual review process if you haven’t done so already. However, make sure that any new system is largely based on objective data.

Many organisations are looking to improve their performance management process and part of this is of course how ratings are used. From announcements and articles and the organisations I meet it’s clear there is a rating’s evolution underway but in most cases these are subtle adjustments or enhancements to address the perceived needs of the employees within a certain organisation.

Deloitte believes their alternate subjective approach will produce similar results but without the significant effort and costs they currently incur, however it would be fair to say that this substantial change would not be for all organisations.

I certainly believe that any widening of the channels of communication through more regular and structured check-ins will be the most important improvement. This will enable the detection and addressing of issues earlier, and I believe build trust and increase engagement across the workforce.

In a future article, I will share my own recent findings from consultations with a number of Australian organisations that are reviewing and redefining their performance management processes.

References

1Performance management is broken
Replace “rank and yank” with coaching and development
Deloitte University Press

2Understanding the Latent Structure of Job Performance Ratings
Michael Mount, Steven Scullen, and Maynard Goff
Journal of Advanced Psychology

3What Millennials Want In The Workplace (And Why You Should Start Giving It To Them)
Forbes

4The Future of Work
Here’s what millennials want from their performance reviews

5Corporate Executive Board (CEB) survey of Fortune 1,000 companies

6More companies planning to ditch annual performance reviews and ratings, but will employees benefit?
PwC research

Top Ten CEO Quotes on People Management 2015

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Back in January, I posted a snappy article on performance management. It wasn’t full of the latest research, complicated metrics or breaking news, but it certainly inspired a lot of you. Which got me thinking, we don’t always need cutting-edge data to instigate a change. Sometimes, we just need an inspirational word from someone worth listening to.

When you’re looking for an inspiring approach to people management, the tech companies are a good place to start. In a year when Netflix’s culture document went viral, Google was once again crowned the no. 1 place to work, and Intel’s OKR strategy infiltrated Accenture (one of the biggest companies in the world), it became pretty obvious that these guys are leading the way. So what can we learn about people management from the CEOs presiding over these HR whirlwinds?

1. “Work for someone who believes in you, because when they believe in you, they’ll invest in you.”
– Marissa Mayer, Yahoo CEO, knows the importance of investing in individuals.

2. “Unless I feel like I’m working on the most important problem that I can help with, then I’m not going to feel good about how I’m spending my time.”
– For Facebook CEO Mark Zuckerberg, it’s all about managing to strengths.

3. “We don’t have as many managers as we should, but we would rather have too few than too many.”
– Larry Page, founding CEO of Google, isn’t a fan of micro-managing.

4. “If there’s someone really good who has excellent industry experience, we like working with them, [they have] common sense and fit our values, we just hire them, because the biggest thing is having smart people who work well together.”
– Vocus Communications CEO James Spenceley focuses on hiring the right personality types.

5. “Teaching your employees something new creates an instant connection, and they will respect you for it.”
– For Taso Du Val, CEO of freelancer networking site Toptal, it’s all about continued development and on-the-job learning.

6. “You gotta build a team that is so talented, they almost make you uncomfortable.”
– Brian Chesky, CEO of AirBnB, focuses on talent.

7. “The key thing is really aligning everybody so they all understand where you’re going.”
– Eytan Lenko, CEO of Aussie company Outware, knows that a clear vision is important.

8. “I’m a big believer in lessons learned. Constantly with the team we go over, why? Why? Why? … The only bad mistake is a mistake you don’t learn from.”
– For Ginni Rometty, CEO of IBM, on-the-job-training takes many forms.

9. “Millennials … are more socially and globally connected … than any prior generation. And they don’t question; they just learn.”
– Intuit’s CEO Brad Smith recognises that younger workers have different learning and development expectations.

10. “At most companies, average performers get an average pay rise. At Netflix, they get a generous severance package.”
– Netflix is known for bucking silicon valley’s people management trends. What do you think of CEO Reed Hastings attitude to performance management?

Are terms like ‘Hollywood’ and ‘Gig’ Spelling the End for the Traditional Employment Model?

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It’s a Brave New World


Montclair Film Festival, CC BY 2.0 , via Wikimedia Commons

I recently listened to a great interview on EconTalk, where journalist Adam Davidson spoke about his experience as a technical advisor for the upcoming movie, The Big Short. On his first day on-set, Davidson was amazed that over 150 people were already working before ever having a full company meeting to strategize the process.  Even more incredibly, many of these professionals had never worked together before.  And yet, everything moved like clockwork.

Davidson experienced first-hand a style of hiring and working known as the ‘Hollywood Model’. A bunch of specialists, usually freelancers, are pulled together to form a team, and each person is hired only for the length of their component of the project, ranging from a few days to over a year.  The team disperses as rapidly as it formed.

In his article for the New York Times, and an upcoming book, Davidson posits that the ‘Hollywood Model’ and the ‘Gig Model’ (used to describe very short-term jobs like Uber or TaskRabbit) will dominate the future of work.  And this, for some, could be a very good thing.

The Changing Face of Employment

The traditional, corporate model of employment (join as a graduate, work for 40 years, retire, and get a gold watch) has been waning since the dawn of the twenty-first century.  After that, younger people started job and career ‘hopping’. Many corporations no longer needed long-term positions, so what had been previously steady jobs were outsourced, while others were replaced by technology.

In this world, the specialized freelancer is king, evidenced by the growing numbers of people who work as freelancers.

So what are the benefits of freelancing for freelancers? 

1. Specificity 

While on set, the movie’s makeup designer told Davidson that zombie makeup (yes, making people look ‘undead’) was all the rage.  People skilled in this particular area were in greater demand and, as a result, they earned greater pay.  Makeup artists looking to build their repertoire started to expand into the ‘zombie area’.

Freelancers can build their skillsets based on what’s trending.  They can find a way to work within a niche that separates them from the pack.  The Internet makes it a cinch to develop a niche and then find the right market.

2. Leverage 

Freelancers can use their in-demand skills to negotiate higher pay.  For example, at a large corporation, two analysts might perform the same job, but one analyst outperforms the other.  In the corporate model, both analysts are likely paid the same, but as freelancers one might command far more.

In short, freelancing favours the highly competent.  As an employer, this means that you can ensure you get best bang for your employment buck too.

3. Reputation 

Especially, Davidson points out, in a world like show-business where everyone rubs elbows, word gets around about who is reliable and who is likely to flame out.  A good working reputation helps freelancers get more work, and find better projects.

What are the benefits of hiring freelancers for employers? 

1. Short-Term Contracts 

After doing some research, you can hire freelancers with good reputations for a single projects and judge his or her fit with your mission.  You can even assign a test project, with little money down, to make sure he or she will be able to meet deliverables.

2. Reliability 

For freelancers, a solid reputation is everything.  And now you can find freelancers based on trusted references or online reviews.  Sites like Elance.com and Freelancer.com provide client reviews of the independent contractors, so you can make selections based on how well a freelancer rates compared to others.

3. Savings 

Not only is hiring a long-term employee a bigger risk if he or she isn’t a fit, you also have to provide all supplies, software, and any necessary training.  By choosing a freelancer, you can find someone who already has the skills, software, or access you may need.

4. New Managers 

As I’ve written in my blog before, new managers should always start by managing freelancers. By letting the managers assess the success of projects over time, they can see how their own interactions with freelancers meets (or doesn’t meet) the objective.

Are There Still Benefits of Permanent Employment? 

If freelancing is growing in market-share and can save money, what are the benefits of permanent employment?  Should businesses be shopping all their work out to independent contractors?

In a word: no.  In the interview, Davidson points out the not-insignificant benefits that come with having permanent staff.  Both companies and workers see and experience benefits from a permanent employment model.

While pay for freelancers can move up and down based on current trends, businesses and permanent employees are shielded from these market signals.  No matter what your staff excels in, a business is still paying a fixed rate.  This shields the business from ballooning costs for services if one particular service (for example, zombie make-up design) suddenly experiences increased demand.

Employees are also shielded from these market effects.  If the market for their specialty (say, copywriting) bottoms out, permanently employed copywriters are not affected.  They are equally unaffected if the cost for their work goes up.

What is the Future of Work?

It’s possible that the permanent work structure we consider ‘normal’ was just an aberration of the twentieth century.  As industrialization and commoditization increased throughout the 1900’s, a company’s main initiative was to produce for the lowest possible cost in order to compete.  Now, in a market saturated with cheap goods, more companies are working towards creating greater value, differentiating themselves, and avoiding commoditization.

To remain agile and ahead of competitors, companies need to work with more skilled people, and need more flexibility to hire contractors for limited assignments.  Freelancers who strive for excellence, are reliable, and are better than average are set to benefit most from this scenario.

Does your business currently utilize independent contractors? What projects do you find lend themselves best to freelancers? I’d love to hear your thoughts below or join the conversation via Twitter @cognology.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

 

image: https://upload.wikimedia.org/wikipedia/commons/1/1a/Steve_Carell_2010.jpg

Redesigning performance management – key trends of 2015

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Back in April, my interest was piqued by an article in the Harvard Business Review. It focused on Deloitte’s new performance management strategy, specifically the research and thinking behind the innovations. But it wasn’t the first clue we’ve had that performance management (PM) is changing.

Intel’s OKR (objective and key results) strategy has been sweeping through technology companies for years. More recently, we’ve seen Adobe, Juniper and Microsoft drop annual performance reviews and forced rankings. Now Accenture, one of the largest companies in the world, has announced plans to do the same. With this in mind, I thought it was high time we took a look at the new initiatives that are revolutionising performance management.

The old model

To understand why performance management is changing, we first need to acknowledge the aspects of the old model that are struggling to meet our needs.

Based on annual or biannual reviews, the traditional approach is all about setting long-term goals and objectives: it doesn’t respond to changing needs or provide in-the-moment feedback. Employees are rated by their managers based on their overall performance for the year, and some companies use forced rankings (where managers rate employees relative to the performance of their peers, distributing ratings into a pre-specified distribution) to further quantify performance.

This model is gradually being phased out as new research demonstrates that numerical ratings have a negative impact on engagement and self-confidence. 
 Performance management strategy changes

89% of organisations surveyed for the Global Human Capital Trends 2015 report have recently changed their performance management strategy, or intend to do so within the next two months.

Yearly reviews have also been found to be less valuable to both individuals and performance than regular feedback – in fact, in a past blog I shared recent research that showed the optimal period between one-on-ones is just one month.

The new model

The new approach is all about agility and flexibility, so there is no universal approach as companies search for solutions that work best for them. However, there are, a couple of characteristics that these new models have in common.

1. Real-time feedback

One of the most prominent changes across the board is the increase in feedback (something I noted when we were looking at changes to Performance management over the last five years). This increased transparency means that employees are always aware of where they stand, and it prevents managers from delaying tough conversations with under-performers.

Since adopting this approach in 2012, Adobe has reported a spike in productivity. Its Global Senior VP of People and Places even credits the new model with the stock price spike it has experienced since adopting it (Adobe’s not the first to identify the benefits of agile performance management either).

2. Tailored approach

Research has shown that setting clear goals and objectives are essential to the success1 of any PM strategy (whether you’re working on the old system or the new).

Accenture and Deloitte have both championed a one-size-fits-one approach. Requiring more training for managers, this system focuses on coaching individuals to succeed in their roles and managing to their strengths (i.e. helping to expand roles and move employees into the positions best suited to their skills).

Rise of 68% to 75% of respondents agree that performance management is important

In a 2014 survey by Deloitte, 68% of HR respondents cited performance management as ‘important’ or ‘very important’. This year, that figure rose to 75%.

3. Team-centric goals

The new models also focus heavily on collective goals, aiming to improve collaboration and performance by setting targets that require the strength of an entire team to meet.

4. Integration

Technological advances mean that performance management is no longer an isolated HR initiative and can be integrated into our day-to-day lives.

Adobe’s ‘Check In’ system, for example, is completely isolated from HR. It allows both employees and managers to set specific goals for each fiscal year and requires review meetings at least every eight weeks. At the yearly rewards check in, managers can assign rises and bonuses based on how well an individual has met their targets.

5. Categorisation

The new models all acknowledge that understanding your workforce is critical, and categorisation goes hand-in-hand with all of the four points I’ve already touched on.

If we’re regularly meeting with employees, it is that much easier to identify who the high potential individuals are. The agility of the new approach, with its real-time feedback and individual focus, enables managers to instantly identify talent. By disassociating the process from HR and managing to strengths, managers can move these folks more quickly into situations where their skills yield the most value.

In conclusion:

It might look like a completely new system, but it’s really not all that different to the old model. Yes, today’s workforce wants an agile, flexible approach, but the needs the new strategy meets are exactly the same as those met by the traditional system. We still need categorisation, open communication, feedback, progression and development; we’ve just shifted our focus slightly. Now, we’re working to meet these needs in real time — and reaping the engagement, productivity and staff retention benefits of this new approach.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

 

Reference:

1Lawler, E. E. 2015. Performance management: the three important features you’re forgetting. Forbes.

Performance management explained with GIFs

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This week I’ve got a humorous post, with a powerful takeaway. I hope you enjoy – Jon

The core reason that we do performance management is to help employees learn. And to drive learning, all you really need to do is set good expectations, and to follow them up with regular feedback.

The performance management equation is really this simple:

Great performance management = Expectations + Feedback

So what happens when you get this equation out of balance?  I thought it would be fun to use some GIFs to make a serious point about why both expectations and feedback are critical for effective performance management. I laughed quite a bit when putting this together!

What happens when managers give feedback, without reference to expectations

Big problems occur when feedback is given without clear reference to expectations. Here are five of the most common reactions that can happen when feedback isn’t based on expectations…

Feedback reaction

I just have no idea where this feedback is coming from

Feedback reaction

When did we talk about this, so called ‘deliverable’?

Feedback reaction

Where did that random comment just come from?

Feedback reaction

Say what about my performance?

Feedback reaction

I was meant to have done what?!?

 

What happens when employees don’t get enough feedback

Different problems occur when expectations exist, but there’s not enough feedback. Five of the most common conversations in a low feedback environment are…

Low performance feedback

I guess I think we’re going ok?

Low feedback reaction

What should we do next?

Low performance feedback

I have no idea where to get started!

Low performance feedback

It’s all urgent

Low performance feedback

I don’t really remember what my expectations are…

 

And now, finally, what happens when you have clear expectations and ongoing feedback…

When expectations of behavior and performance are made clear, and feedback works well in concert with those expectations, here are five reactions you can expect to see in the office:

Clear expectations and ongoing feedback

How you feel

Clear expectations and ongoing feedback

How your employees feel

Clear expectations and ongoing feedback

What it’s like walking round the office

Clear expectations and ongoing feedback

What the rest of your team think

Clear expectations and ongoing feedback

What your boss thinks

 

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

Joy, data (and performance management?)

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Performance management is fundamentally a challenge of learning: How can we make sure employees learn from their successes and failures over time to improve their performance?

This is why I was fascinated to watch the inaugural Australian Learning Lecture, delivered by Sir Michael Barber. Barber is a British educationist who has served as head of the global education practice at McKinsey and advisor to Prime Minister Tony Blair.

Barber’s lecture focuses on the idea that more measurement leads to both better outcomes and a happier, more successful learning environment. There’s a lot of powerful thinking here that all of us involved in the space of performance management can learn from.

You can watch the lecture below (or jump down for my key takeaways on better performance management).

I took away four points that are highly relevant to how we approach performance management:

One: Measurement is suffering from an image problem

Barber makes the strong argument that “we need to reclaim data as an ally in improving the human condition…In the modern world, Joy and Data are often seen as opposites; the one creative, spontaneous, warm, and spiritual; the other, scientific, bureaucratic, cold and analytical.”

Performance management take-away: Like in education, badly designed and executed performance measurement processes (i.e. rank and yank) have left some with a bad taste in their mouth.

But done well, performance measurement is an empowering conversation about self-development. That’s a conversation that all employees (and students) can buy in to. It’s up to all of us working in performance management to continue to reclaim and reinforce the humanistic side of performance management.

Two: Hard work without measurement is folly

Rapid learning comes at the intersection of knowledge and data. As Barber states in the lecture: “Many people peddle the myth that data undermines creativity and the joy that may come from it.”  But these people ignore that there’s no creativity unless you have a feedback mechanism to improve your own performance over time. And to be effective, that feedback mechanism requires data.

Performance management take-away: In a business environment, performance management is your feedback loop. It’s the constant cycle in your work that facilitates learning and improved performance.

Measurement is the core of the learning process. If you don’t have a feedback loop built on data to guide your behaviour, you’ll never achieve exceptional performance.

Three: Measurement creates the right circumstances for leaders to lead

Greatness is about much more than just data. But good data and measurement creates the right circumstances for leaders to lead.

As Barber stated in the lecture: “[you] cannot mandate greatness; greatness has to be unleashed …[The] role is to create the circumstances in which success is possible while teachers and school leaders lead the way to greatness. Part of the context has to be good, close-to-real time data at classroom, school and system level.” 

Why can’t you mandate greatness? In Barber’s opinion it’s because: “[every] decision requires more than the evidence. It requires judgment, analysis and ethics too. If you put it mathematically it might look like this: DATA x ANALYSIS x ETHICS x JUDGMENT = GOOD DECISIONS”

Performance management take-away: Like in the classroom, measurement enhances the role and impact of leaders.

Rather than displacing the role of leaders, great performance management increases their impact. With more data, leaders have the ability to take better actions faster.

Four: The problem is never the measurement – it’s how humans use the data

The problems with measurement typically come from how humans choose to use the data (not the measurement itself).

To quote from the lecture: “The risk is that through false interpretation of the data or through a failure to recognize that the data is incomplete, human beings mislead themselves; or, worse, that by manipulating the data or the presentation of it, one group of human beings deceives another.”

Performance management take-away: You can implement the best performance management tool in the world (And yes, we think Cognology is one of them!). But it’s equally critical to make sure your people are adequately trained and resourced.

Performance management is a human process. As such, there’s a huge amount of leverage in making sure your people deeply understand the aims of the process and have the resources they need to complete it successfully.

In conclusion

There’s some fascinating thinking in this lecture on how we can use measurement to improve the learning process across the whole of society (and more specifically in the business context of performance management).

Fundamentally, without measured performance there’s no feedback loop. And without a feedback loop, there’s no learning. This is why growing recognition of the importance of measurement makes it an exciting time to be in performance management. Getting measurement right in schools and businesses worldwide has huge potential to improve global happiness, living standards and productivity.

And as always, I’d love to hear what you think of this article. You can add your thoughts in the comments below, or join the conversation on Twitter via @Cognology.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

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