Performance Management

Dan Markovitz’s recent Harvard Business Review post on The Folly of Stretch Goals brings to mind a development in my own management incentive plan design work over recent years, as my clients and I address heightened concerns about risk and unintended consequences.

Valve trades traditional managerial structure for free body massages.
Those opening the first page of Valve's latest guide for new employees will be met with a simple block of text containing the following words: "A fearless adventure in knowing what to do when no one's there telling you what to do."

It’s that time of year again! Formal evaluations provide a framework for discussing the overall work of an employee, and, in a way, are a representation of your effectiveness as a manager. Making things even more difficult is the fact that no one particularly likes the formal or informal performance review process—especially when raises, promotions, and job security are at stake. Here's how you can turn the evaluation process into a positive experience:

 
Who's really effective at the office?
To get a handle on that question, a handful of bosses are taking decision-making power out of the executive suite and asking employees to help identify—and reward—talent by experimenting with internal markets in which workers "invest" in co-workers' performance and ideas.
Coffee & Power, a San Francisco odd-jobs start-up, granted each of its 15 full- and part-time employees 1,200 stock options this past January, to distribute among co-workers in whatever way they chose. A worker can plunk all his options onto one colleague or split them among the group, so individual bonuses are tied to how co-workers perceive each other's work.

What does a real-life CEO have in common with the central figures of a fictitious Mafia crime family in The Godfather? According to Justin Moore, CEO and founder of Axcient, plenty. 

Established Companies Hope Interaction With Others Will Spark Collaboration
Taking a page from start-ups, some established companies are opting to share their workspaces.

You've heard the adage, "Hire the right people, and everything else is easy." That may be true, but it's also unrealistic—especially in start-ups and rapidly growing, innovative businesses. Mistakes are made in hiring; high-potential peope fizzle out, burn out, or check out. Every owner eventually leads a workforce with mixed talent and ability.
And inevitably, one member of the workorce comes in dead last.

Over the past 18 months, I’ve asked for examples of organizations doing it.  As I've found clues, I've shared them here on this blog.  But now, I can finally give you some more details.  Today, I am proud to announce that we have published our case study on how Kelly Services abolished performance scores.
In the case study, we share the answers to the most frequently asked questions we receive about abandoning performance scores.  These are questions such as:
How do you compensate employees without performance scores?
How do you deal with compliance in countries that require documentation?
How do you identify high-potential employees?

I WAS the youngest of four children. My father was an electrician, and my mother was a school nurse who returned to school to get her degree when I started kindergarten. She would say you can be anything you want to be, and she set an example for me.
In high school, I enjoyed public speaking, art and music. Whenever the Grateful Dead were at Madison Square Garden, a friend and I would silk-screen T-shirts with Jerry Garcia’s image and sell them to concertgoers.

(From Indiana University) -- The dreaded bell curve that has haunted generations of students with seemingly pre-ordained grades has also migrated into business as the standard for assessing employee performance. But it now turns out -- revealed in an expansive, first-of-its-kind study -- that individual performance unfolds not on a bell curve, but on a "power-law" distribution, with a few elite performers driving most output and an equally small group tied to damaging, unethical or criminal activity.

Employee dissatisfaction with pay, promotion and prospects, is growing according to a survey of 400,000 private sector employees.
Just under half (49%) of those polled by HR consultancy ETS felt their level of basic pay was not fair, representing a two per cent increase from last year.

As many of you know, I have expressed considerable skepticism about whether performance evaluations are even worth using, if they do more good than harm.  And Sam Culbert has gone the next step with his book, Get Rid of the Performance Evaluation.