Talent's progress

Is there a perspective that can throw light not only on the progress of  employees, but also on the effectiveness of people management in the organization? Tracking the changes in the positioning of employees on the talent grid over a period of time can be an excellent option!

There are many ways in which the progress of an employee ('talent') in an organization can be depicted. The most concrete one is in terms of the roles the employee takes up in the organization. Then there are aspects like compensation, responsibility level etc. that can also be used to track the progress of an employee in the organization.

In this post, let's look at the progress of employees in the organization in terms of a more abstract (though very widely used) representation - in terms of the changes in the mapping of the employee to the performance-potential grid. This grid, often called the talent grid, is typically a 9-box one, with box 9 corresponding to high performance coupled with high potential. 

If we track the changes in the positioning of the employees on the talent grid over a period of time, say for 3-5 cycles of talent review process that lead to the mapping of the employees on this grid, the trends emerging from the same can give us very interesting insights on the effectiveness of Talent Management in the organization. 

Ideally, employees should shift right and/or up on the grid. This would mean that the Talent Management in the organization has managed to help the employees to improve their performance and/or potential. Similarly, if the general trend in an organization is that employees would shift left and/or down and then out of the grid (and the organization!) it can be an indicator of lack of effectiveness of people management in the organization. 

Of course, these movements are also dependent on the employees (their performance and demonstrated potential). However, the overall trends in the movements on the grid (for a group of employees) can provide valuable indications on the effectiveness of people management in the organization.  These employees went through the selection process of the organization before they started featuring in the talent grid and hence the organization can't easily disown them or their movements on the talent grid! 

Yes, there could be other factors at play. For example, if the organization has imposed some sort of normalization on performance ratings and/or on potential ratings, this would limit the percentage of the employees who can be in box 7, 8 and 9 (the boxes in the talent grid that denote the best talent positioning). Also, if 'long term' performance (and not recent performance) is what drives the positioning on the performance axis of the grid, the degree of  'fluctuation' along the performance axis of the grid is likely to be lower. 

There is also this interesting phenomenon of stickiness of the ratings, especially potential ratings.  The extreme case is when the organization takes the stated or unstated position that the 'potential' is a non-modifiable factor, in which case no movement on the potential axis would be possible. Mercifully, most organizations consider potential to be some sort of a combination of ability, aspiration and leadership and somewhat modifiable. 

All this assumes that the definition, the rating scale and the calibration norms for performance and potential (that lead to the positioning on the talent grid) remains consistent over the years/over the period used for trend analysis. Else, there is a possibility of scenarios similar to that of 'reducing poverty by redrawing the poverty-line'!  

There could also be deeper factors like the tacit definition of 'what good looks like' and  the unstated assumptions regarding people management in the organization  (e.g. 'we hire a person based not only on the fit to the current role but also on the fit to the future roles' or 'we hire people mainly to solve a particular problem at a given point in the organization's journey'). 

As we have seen in 'Type N and Type O Organizations', in  the case of 'Type N' organizations, the relatively new employees have a great advantage over the other employees, though this advantage vanishes quite quickly as they become 'old' (tenured)! This can lead to rapid changes in the grid positioning as the employees tend to get over-positioned on the grid initially and then shift left and down (and out!) very quickly. This creates a lot of action (and an illusion of progress) on the people management front, though over a period of time it might become apparent (if the organization is open to see it) that quality of talent in the organization hasn't improved and that 'the new is not really outperforming the old'!

 So, where does this leave us? Though Talent's progress (or lack of it) on the performance-potential grid is a rather abstract way of capturing the Talent trajectory', it can indeed provide very useful insights on the effectiveness of people management in the organization! While the movement of a particular employee on the grid is mainly a function of the performance and demonstrated potential of the employee, the trends in these moves at the group level points to the effectiveness (or lack of it) of people management in the organization. These organization level trends can also be very useful in unearthing the unstated assumptions that the organization has made on people and on people management!

Any comments/ideas? 

Sight, Insight and Foresight method for managing non-performance

This post was triggered by an interaction on Twitter that I have had with a senior HR professional on 'addressing non-performance'. We agreed that the focus should be on 'getting rid of non-performance in non-performers' as opposed to 'getting rid of non-performers'. Then, he asked me how exactly would I accomplish this. This put me in a fix; how will I say something worthwhile in 140 characters in response to such a fundamental question considering that our senior HR professional would have read (and even created) tons of material on performance management? That is when I came up with this 'Sight, Insight and Foresight method for managing non-performance'.

Though I was only 'semi-serious' when I came up with the above 'method', later I felt that it might not be such a bad idea to detail it out a bit. To be honest, there is nothing particularly new in this - it is 'old wine in new bottles'. It is also more of a 'perspective' than a 'method'. However, I feel that as the product (basic principles of performance management) is good & the need it addresses is real (still relevant), the requirement is just to ensure that remains attractive (appealing) to the customers by means of new packaging (positioning)! Also, I am convinced that when it comes to the basics of life and work, our problem is more to do with 'inaction' and not 'ignorance'! Hence, if new packaging can increase the probability of a good concept getting the attention it deserves, it is definitely worth the effort. So, here we go!

What do the various elements of the 'Sight, Insight and Foresight method for managing non-performance' mean?

'Sight' is about developing a shared understanding among the stakeholders (especially between the employee and the manager) regarding what exactly are the performance objectives, how will success be measured and how well one is doing against those objectives & targets at any point of time. This is not trivial, as there can be a disconnect between the manager and the employee on 'On what good looks like'  especially in the case of non-routine and rapidly evolving jobs. While SMART (Specific, Measurable, Agreed, Relevant, Time bound) objectives can help to some extent (especially if they can be made to remain SMART over the entire performance period - no easy task, I must say!), there are deep psychological factors that might lead to a situation where the employee disagrees with with the organization's/manager's assessment of his/her performance ( See Performance ratings and the 'above average effect' for details). 

'Insight' is about generating understanding through performance coaching about the factors that lead to non-performance and how to address  them. While this would involve providing developmental inputs/opportunities where required, we must ensure that the root causes of non-performance are correctly identified. Often, problems at the structure, process, policy, work planning & leadership levels get wrongly (and conveniently!) interpreted as 'non-performance' at individual employee level and hence get diagnosed as  'individual capability issues' (see 'Training the victim' for more details). By the way, if the diagnosis leads to the conclusion that the root cause of non-performance is 'lack of organizational commitment' on the part of the employee, we must check if we are using 'Appropriate metaphors for organization commitment'! Hence, the 'insight' we are talking about here is for both the employee and the organization!!

'Foresight' is about predicting possible impediments to good performance and dealing with them proactively. These impediments usually become apparent in hindsight*; but, by then, the performance window would have closed and the employee would have already been labeled as a 'non-performer'! It is also about identifying and addressing non-performance early enough - before it becomes a full-blown issue. If the performance standards are very high and 'non-performance' means 'anything other than outstanding performance', then deeper aspects related to person-job fit, employee engagement (See Employee engagement and the story of the Sky Maiden) , culture (See Of reasons, rationalizations & collective delusions) & meaning (See Architects of meaning) also need to be considered!

*Note: It is interesting to note that foresight and hindsight are represented by Prometheus and his brother Epimetheus in Greek mythology. Prometheus means 'he who thinks before' and Epimetheus means 'he who thinks after'. 

Any comments/ideas?

Performance ratings and the ‘above average effect’

“Performance ratings will be shared with the employees next week. We expect employee attrition to go up significantly in the next few months”, said the HR Manager.

It is a fact that in many organizations the attrition percentage goes up in the months after the annual performance ratings are announced. Some of this is because of the process linkages. Salary hikes and bonuses (that are linked to the performance ratings) usually follow soon after (or along with) the announcement of the performance ratings and it might make logical sense for employees to receive the bonus (after all one has worked for an entire year to get that) and the higher salary and then negotiate a better salary (with a  new company) based that. But some of the resignations are a direct emotional reaction to the performance ratings. Based on my experience across multiple companies (as an employee and as a consultant), I have often wondered why the sharing of performance ratings is such an unpleasant experience – both for the employees and for the Managers of the employees.

There could be many reasons for this. The performance objectives and targets might not have been properly defined or agreed upon. There might have been changes in the context or factors outside the employee’s control that made the targets unreasonable/impossible to achieve. The performance feedback might not have been given regularly and accurately (managers often try to ‘soften’ negative feedback) and hence the rating might have come as a surprise for the employee. But I feel that most of the unpleasantness of the situation is related to a psychological phenomenon known as ‘superiority illusion’ or the ‘above average effect’.

'Illusory superiority' is a cognitive bias that causes people to overestimate their positive qualities and abilities and to underestimate their negative qualities, relative to others. This manifests in a wide range of areas including intelligence, possession of desirable characteristics/personality traits, performance on tests and of course ‘on the job performance’ (for which performance rating is an indicator). While the exact percentages can vary based on the social/economic/cultural context, typically in a group at least 75-90% of the members rate themselves as 'above average'.

This fact (that at least 75% of the people rate themselves as 'above average') creates trouble when it comes to performance ratings. These days companies are keen on ‘differentiating based on performance’ (say ‘to build a performance driven culture’) and this would mean that when it comes to performance ratings, the relative performance of the employees becomes a critical factor apart from the absolute performance (performance against agreed upon targets). Whether or not a fixed percentage distribution of ratings are prescribed, some sort of a ‘normal curve’ emerges. Typically, the positively differentiated performance ratings (i.e. if we have a 1 to 5 scale with 1 being the lowest and 5 being the highest; ratings of 4 and 5 ) form about 25%. Thus only about 25% of the employees will get ‘above average’ performance ratings. The arithmetic is simple and the conclusion is inevitable. If at least 75% of the employees consider their performance to be ‘above average’ and only 25% of the employees will get ‘above average performance ratings’, then at least 50% of the employees will be disappointed with their performance ratings. Thus, sharing of performance ratings is likely to be an unpleasant experience – both for the employee and for the Manager.

Now let us look at this from the Manager’s point of view. Experienced people managers know that the problem described above will happen (though they might not be aware of the exact percentages/degree of the problem). But they can’t do much about it as the two critical factors (employee’s tendency to rate their performance as 'above average' and the maximum percentage/number of the ‘above average performance ratings’ that the Managers can give) are largely outside their control. Managers do what they can. This can range from ‘expectation management’ to ‘pushing for a higher percentage of above average ratings for their team’ to ‘providing other rewards and recognition to compensate for the unpleasantness created by lower than expected performance ratings’ to disowning the performance ratings (blaming it on HR and/or senior leadership). But these are of limited utility as they are not addressing the core problem. Also, this can lead to a situation where the employees lose confidence - in the Manager and in the Performance Management System. Another option for the Manager is to staff his/her team with people who have a low self-image (masochists are welcome!). But if the Manager wants the employees to have high self-belief/confidence when dealing with customers and low self-belief/confidence when interacting with the Manager, then it calls for a Janus-faced personality. While such personalities can be found in abundance in extremely hierarchical organizations (see Followership behaviors of leaders), it might not be a viable strategy for ‘normal’ organizations!

Logically speaking, grappling with this problem for an extended period of time and gaining insights and wisdom from the struggle should help the Manager to be more reasonable when estimating his/her own relative performance (and hence the performance rating he/she deserves) and to be more understanding when the Manager’s Manager tries to share and explain the Manager’s performance rating. But, as the studies in ‘Behavioral Economics’ have demonstrated, being aware of a ‘bias’ need not necessarily help one to overcome the bias! No wonder managers often dread the entire business of performance ratings – giving the performance ratings to their team and receiving their own performance ratings!!!!

The research done on the ‘above average effect’ has thrown up some interesting findings that might help us (at least to some extent) in dealing with this problem in the context of performance ratings. It has been found that the individuals who were worst at performing the tasks were also worst at estimating their relative performance/degree of skill in those tasks. It has also been found that given training, the worst subjects improved the accuracy of their estimate of their relative performance apart from getting better at the tasks.

Another possibility here is to make the performance ratings less dependent on relative performance and more dependent on absolute performance (performance against agreed upon targets) or to increase the percentage of 'above average ratings'. But these kind of steps can go against the performance management philosophy of the organization (of differentiation based on performance) and hence impractical. If the context so permits, standardization of performance objectives/targets for a particular role and making the information on the performance of employees on the objectives/targets available to all can also be looked at. Research shows that self-evaluation (especially in comparative contexts) is driven primarily by an intuitive ‘heuristic process’ as opposed to a logical/effortful ‘evidence-based process’. However, by making valid & reliable data on relative performance available and by encouraging the employees to look at it (and may be even participate in an open discussion about it) before they do the self-evaluation (and evaluation of their relative performance), the influence of the ‘evidence-based’ part on the decision making-process might increase.

Again, we can make discussions on the challenges related to the 'above average effect' part of the performance management related communication and training  for employees and Managers. May be, we can even build in some 'nudges' (like asking the employees to write down three things that their peers have done better than them - as part of the self  assessment) that will prompt them to deal with their cognitive bias (of superiority illusion) in a more rational manner.

Apart from this, ensuring that basics of performance management - performance planning, coaching, feedback and review - are done well also helps, though they don’t directly address the problem we are discussing. It is similar to ‘taking antibiotics for dealing with a viral infection’. While they don’t solve the core problem (virus) they do help in preventing secondary infections and hence has some utility in some cases (especially when effective anti-viral drugs are not available and the possibility of secondary infections are high)! The problem we are dealing with here is too 'human' to be completely solved by 'performance management techniques' and we have to live with it to some extent as the price for being human!

Any ideas/comments?