Vercor

Sustainable Company Growth Through Effective Employee
Performance Management

In the April 2002 edition of the Journal of Applied Psychology, The Gallup Organization published research that proved unequivocally that a more engaged employee is more productive, profitable, customer focused, safer and less likely to jump ship. Gallup found that 70 percent of U.S. employees are not engaged at work, as measured by what they referred as the Q12 items … twelve questions, the answers to which reveal whether or not an employee is engaged and to what degree. Here are the twelve:

1) Do I know what is expected of me at work?
2) Do I have the materials and equipment I need to do my work right?
3) At work, do I have the opportunity to do what I do best every day?
4) In the last seven days, have a received recognition or praise for doing good work?
5) Does my supervisor, or someone at work, seem to care about me as a person?
6) Is there someone at work who encourages my development?
7) At work, do my opinions seem to count?
8) Does the mission/purpose of my company make me feel my job is important?
9) Are my co-workers committed to doing quality work?
10) Do I have a best friend at work?
11) In the last six months, has someone at work talked to me about my progress?
12) This last year, have I had opportunities at work to learn and grow?

This data begs the question, however, of what can we do to build a working environment that nurtures and creates more engaged employees. Gallup offers the following four disciplines.

Discipline 1: Hold All Employees Accountable for Their Performance
The first discipline is to ensure that each employee understands how his or her performance will be measured. Each employee should be able to look at his or her performance dashboard and identify each dial, understand why each dial is important, and know how and how often each dial will be measured.

The perfect dashboard is one that includes only three dials. One dial should measure the persons business performance. For example, a sales role would normally include such metrics as gross margin and revenue growth. An operations role would include measures of quality such as "errors per million." An information technology role would include measures of efficiency such as "new program cycle time."

The second dial should measure how engaged the employee is in his or her workgroup. Although short-term results can sometimes be achieved by bullying tactics, sustainable superior results are impossible without high levels of employee engagement. And, since every single employee either adds or subtracts from his teams level of engagement, every single employee should be held accountable for it.

The third dial should measure customer engagement. As with the employee engagement metric, your customer metric should be short and simple. It should be derived from asking actual customers to rate their own feelings and/or behaviors. If an employee only interfaces with vendors or others within his or her own company, measure this person just as if they were customers.

Discipline 2: Teach All Employees to Identify, Develop and Deploy Their Strengths
Most people are not fluent in the language of strengths. Ask them to describe their strengths and, with few exceptions, they will quickly lapse into the language of cliché. "I am good with people, I am a self-starter, I am a perfectionist," and so on. Furthermore, ask them which they think will help them improve the most … building on their strengths or improving their weaknesses. Most of them will come down on the side of weaknesses.

To build a fully engaged organization, you will need to teach your employees a new perspective and a new language. First, teach them the difference between talents, skills and knowledge. Teach them that each person possesses unique talents and that these talents and recurring patterns of thought, feeling or behavior, endure throughout adulthood. Teach them that the way to excel is to identify their natural talents, and then to seek out skills and knowledge that strengthen these talents.

Second, teach them a way to identify their strongest and weakest talents. Teach them to look for the clues to talent, clues such as yearnings, areas of rapid learning, satisfactions and spontaneous reactions.

Third, teach them a language for describing each person’s talents. This language must be precise. It should be able to describe the subtle variations of how one person differs from another. It must be positive. It should help explain a person’s strength not frailty. In addition, it must be common. It must be a language in which every employee is fluent, so that no matter where he or she is in the organization, if someone says Mary has "command" or Brian has "achievement" everyone knows exactly what is meant.

Finally, teach them to spend at least 80 percent of their time thinking about how to build their talents into bona fide strengths by acquiring relevant skills, knowledge and experience. Teach them that only 20 percent of their time should be spent managing around their weaknesses. Teach them how to use this time wisely by finding a partner, developing a system for support, or by using their strengths to make their weakness irrelevant. If the weakness stems from a lack of skills or knowledge, teach the employee to take responsibility for seeking out the skills or knowledge needed.

Discipline Three: Align All Your Performance Appraisal and Review Systems Around Identifying, Deploying and Developing Employee Strengths
Design an effective performance appraisal process. Obviously, your process will need to be tailored to the unique requirements of each role, but to guide your redesign we suggest following this simple sequence.

At the beginning of each year, the manager and the employee should have a one-hour conversation. During this conversation they will discuss three areas: a) what are this employee’s strengths? Specifically, what are his or her talents and relevant skills and knowledge? b) What is expected of the employee? Specifically, what are the dials on his performance dashboard, what level is the employee expected to reach this year on each dial and what at-risk compensation will he or she receive for reaching these levels? And, c) How can the employee use his unique strengths to drive each of the dials? Specifically, what strength-based strategies or tactics can he employ to reach the levels expected of him? This last area is where all the creative work of great coaching needs to occur.

During the course of the year, the manager and the employee will meet at least four more times for a minimum of thirty minutes each time. In these meetings, the employee will answer three simple questions: a) What is my main focus going to be for the next three months? b) Are there any new strategies or tactics I need to employ or should I stick to the ones we agreed on at the beginning to the year. And, c) What two things can you, my manager, do to help me? These brief but focused conversations keep every employee focused on the short-term future and thus are the mechanism that allows an organization to respond in real time to dynamic market conditions and shifting priorities. They are the organization’s best antidotes to change.

At the end of the year, the manager and the employee meet for a final time to review last year’s performance. In this meeting, the manager plugs in the employee’s objectively measured scores for each of the dials. No complex negotiation is needed to arrive at the overall rating because there is no overall rating. There is only the score. Objective, dispassionate, incontrovertible numbers. They are what they are. The employee receives the at-risk pay agreed upon at the beginning of the year … and then the process begins again for another year.

Discipline Four: Design and Build each Role to Create World-Class Performers in the Role
One simple way to assess how well you are managing your human capital is to ask your employees this question: At work do you have an opportunity to do what you do best everyday? Gallup research reveals that, on average, only 20 percent of employees can answer "strongly agree." Why is this figure so low? Why do so many employees feel miscast?

One of the main reasons is that many employees have been deliberately promoted out of the roles where they can really use their strengths. To create an organization of world-class performers in every role, undertake the following initiatives:

Define graded levels of achievement for every key role. Specify at least three rungs of a career ladder that leads from good to great to world class. These rungs should be based on reaching certain levels of measurable performance, rather than just tenure, so be sure to use each role’s outcome metrics when defining the rungs. Your system should allow every employee in every role to answer these three questions:
A. Who is the very best, the Tiger Woods, of my role?
B. Does this person receive prestige and respect in the form of pay, title or recognition within my organization?
C. What are the performance levels I will have to reach in order to become the next Tiger Woods?

Build an instrument to select employees who possess the same level of talent intensity as your best performers in the role.
Your selection system should be built around a study of your best performers in the role, or around those who, in your considered opinion, will be the best performers given the way your business is developing. It should have at its core a selection instrument that is built around sound psychometric principles. This instrument should be scored, but it should yield only a total measure of talent intensity, not a score for each specific talent. This measure of talent intensity will provide your managers with an objective and reliable answer to the question: "Does this candidate possess an overall level of talent intensity similar to that of our best?"

Your selection system should have a second component, which is a set of open-ended questions that the manager can use to listen for clues to the person’s talents during the interview process. These twin selection tools should be then be used as a general guide to aid in the selection process.


This article was written from information published by The Gallup Organization. Learn more by reading their books, attending the Gallup University courses, or contact Gallup at 800-288-8592 for consulting. Purchase Discover Your Strengths and receive an identification number to take Gallup’s online ‘Strength Finder’ test. See www.Gallup.com.