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Consider the performance review process at Tesla. Is it simply an exercise, or is it valuable for managers and employees?Assess the performance review system, using the prompts below:Does the review have a self-assessment component?Does the process lead to an individual development plan?Does the financial and performance discussion happen in the same review?Are the outcomes of the review tied to any talent management opportunities?What two changes would you advise the CEO to make in your organization’s performance review process?https://www.wsj.com/articles/goldman-goes-beyond-annual-review-with-real-time-employee-ratings-1492786653?mg=prod/com-wsjhttps://blog.performyard.com/performance-management-at-tesla-what-we-know jwi_520_w7_l2_1176.pdf jwi_520_w7_l1_1176.pdf bfd5a1d_c6b5_40a1_9a7e_d616dd08ea92.pdf Unformatted Attachment Preview ! JWI 520 People Management Week Seven | Lecture Two - Page 1 - HOW TO GIVE CONSTRUCTIVE, CANDID PERFORMANCE FEEDBACK ! When we introduced the subject of candor in the first JWMI course, we noted that the culture of many organizations tends to discourage people from being candid. In a similar way, the norms and practices that surround most performance reviews and feedback processes reduce the likelihood that the information conveyed will be honest. In this lecture, we focus on how to encourage managers to give useful, candid performance feedback to their peers and employees. JACK WELCHS APPROACH TO PERFORMANCE FEEDBACK Notwithstanding its reputation for a no-nonsense, hard-driving culture, the GE that Jack Welch inherited as CEO left much to be desired in the area of performance assessment and feedback. In many parts of the company, the ratings of most employees fell into the top two performance categories. Higher management assured even those employees who were not carrying their weight that they were doing a good job. - Page 2 - If an area of weakness was mentioned at all, it was mentioned gently and in passing, and future rewards were not made contingent upon future improvement. When people were passed over for promotion, they were assured that it was because of politics, or they were told that they barely missed getting the job because someone else scored just a little bit higher. In those early days after Welch took over the reins, a high percentage of GE’s performance reviews looked something like this: You received an appraisal from your boss that was filled with pleasantries but no authentic discussion of your strengths and weaknesses. After sitting through 30 minutes of conversation, you had no more idea of where you stood in the organization than when you started. Your boss deflected any real dialogue about your future career trajectory, and concluded by thanking you for a job well done, even though you knew of several things you did that you could have done better. The final straw came when Welch found out that some of the worst performers in various departments had not only received raises, but in a few cases had been given stock options, too. At that point Welch told his managers and supervisors that he expected them to identify, and terminate, the bottom 10\%. For this practice of differentiation, as he called it, Welch was subjected to intense criticism from the media and, to a lesser extent, - Page 3 - within GE. Consistent with the principle of candor that he feels so strongly about, he addressed the topic at numerous employee forums, as well as at meetings with customer teams who were visiting GE, to hear their suggestions and defend his directive. Typically, he would explain his position by saying something like this: Let’s start by seeing if we can agree on something. Can we agree that everyone doesnt perform at the same level, so some of your employees— maybe 10\% of them, maybe 5\%—are underperformers? If we can agree that your organization has a bottom 10\%, or something directionally like that, then our only disagreement is how you should treat them. You may think Im cruel for telling people they should be looking for another job because they aren’t cutting it here. You would never do anything so mean. No, what you do instead is label the low performers as “meeting job requirements,” say nice things to them at review time, and give them small raises. After all, they’re good people and you don’t want to hurt their feelings. But when an important customer comes to town, will your low performers be assigned to squire them around? No. When you have an important job that needs to be done, will they get it? They will not. And when a promotion opportunity opens up, will they be considered? They wont be. But since no one has told - Page 4 - them how their performance is really viewed, they think they are up for getting these things, and they die a little each time they are passed over. They are not stupid people, so eventually they figure it out, but by then most of their work years are gone and they’re not marketable. You think you’re being kind, but it’s the cruelest thing you can do. You’re sabotaging these people’s careers. At least have the honesty to admit to yourself why you’re doing this. It’s not for your employees’ benefit. They would be far better off knowing where they stand while they are still young enough and self-confident enough to pursue a great career somewhere else. And it’s not for the company’s benefit. Do you honestly believe you cant find people who can help the company more than your bottom 10\%? Admit it—you’re doing this for your own sake. You just don’t want to have those conversations. Let me tell you—I don’t want you to enjoy those conversations. I hope you’re sick to your stomach before your meeting and you can’t sleep the night before. It’s a terrible thing to have to let someone go. But you still have to do it. It’s your job! Continuously upgrading your organization’s talent is one of the most important responsibilities a leader has. And one more thing—while you’re supposedly being kind to your people, your customers are getting 10\% more demanding each - Page 5 - year, and your competition is getting 10\% better each year. If you let your competition take over your markets and steal your customers, a lot more than 10\% of your people are going to lose their job—very probably including you. HOW TO GIVE CONSTRUCTIVE NEGATIVE FEEDBACK Up until this point, we have discussed GE’s approach to performance feedback, before and after Jack Welch became CEO. Let’s take a look now at a powerful technique that you can use in any organization, or for that matter, at home with your spouse, children, friends, and neighbors. Norman Maier developed this technique, known as problem solving, several decades ago when he was a professor at the University of Michigan (Maier, 1963). Maier’s approach is based on four steps that may sound simple, even obvious, but are quite nuanced in practice. The steps are: (a) mutual identification of the problem, (b) proposing rather than taking a fixed position, (c) free, open communications, and (d) starting with things in common. Let’s explore these in more detail. - Page 6 - Mutual Identification of the Problem Intuitively, doesn’t it make sense that potential adversaries should start working out a problem by deciding together what their problem really is? In reality, however, this rarely happens. By way of example, consider Sally, a boss, and John, her employee. Sally thinks John’s performance is terrible; she wishes he would quit so she wouldn’t have to fire him. John, by contrast, thinks his performance is downright terrific. In his opinion, Sally’s incoherent, inconsistent management style is the problem. Now imagine their conversation: They might as well not be in the same room. To avoid such a situation, Maier suggested a radical departure from standard practice. Instead of deciding what the problem was before a meeting occurred, he recommended that the people involved—say, Sally and John—come to their session armed with information and data, not opinions or conclusions. Thus, Sally might say, “John, I notice from the meeting summaries that you missed two recent conferences with National Harvester, and you came late to one of the conferences you did attend. Are you still the relationship manager for that account?” - Page 7 - Such an opening, rather than, “John, your performance stinks,” would allow John to reply along the lines of, “Maybe I missed a signal, but it was unclear to me whether you wanted me to participate in those conferences.” Yes, it is possible such a meeting would end in a confrontation, but its tone, at least at the start, allows both participants to redefine their problem as a shared one. Proposing Rather Than Taking a Fixed Position Maier’s second step builds on his first. Along with presenting data in place of judgment, he urged people in conflict not to take fixed positions. Instead of saying, “You said you wanted to take on the National Harvester account,” Sally could say, “I thought you said you wanted to take on the National Harvester account.” Such an adjustment in tone and approach might or might not be sufficient to rescue a conversation, but theres nothing to lose by trying. In any case, as the old saying goes: “The more sure you are, the more wrong you can be.” As an example of how Maier’s precept served as a guide to action, in one corporation to whom Maier consulted, leaders would meet annually with employees to give them feedback about their prior year’s performance. The meetings were run in a professional manner, and the employees’ views of their own performance were invited and listened to respectfully. - Page 8 - There was just one problem: The leaders were conducting the reviews from a copy of the review form. The originals, which were used to establish the following year’s compensation, had already been sent off to HR. Viewed through a problem-solving lens, the firm quickly saw that, given this backward process, the leader’s perspective on each employees performance amounted to taking a fixed position. Nothing the subordinate said could alter the formal evaluation. Armed with this new information, the timing of the review process was adjusted to solve the problem, much to the satisfaction of managers and employees alike. Free and Open Communication The third part of Maier’s technique is quite difficult to honor in most organizations, because the trappings of office and symbols of power are so entrenched and visible. It is hard, as everyone knows, to speak truth to power. And yet, a skilled leader can take many steps to make sure that contentious problems—in everything from giving a performance review to managing a team to leading a change initiative—get the kind of freeflowing debate they need. You will be reading much more about ways to increase idea sharing in subsequent lectures of this course, and in subsequent courses, as well. Leaders can, for instance, keep their own opinions to - Page 9 - themselves as a debate unfolds, and they can reward those employees who have the courage to speak openly. As one example, the rules in many military tribunals call for the most junior officer to vote first, then the next junior officer and so on, with the most senior person in attendance voting last. Admittedly, measures such as these are not always adequate to neutralize the effects of a strongly hierarchical, power-based culture, but at the very least they are a step in the right direction. Starting With Things in Common In the early 1990s, considerable research focused on how managers conduct their performance feedback reviews (Latham & Wexley, 1993; Wexley & Latham, 2001). The researchers discovered that feedback is almost always introduced into the conversation in one of two ways, which the researchers nicknamed the “other shoe” technique and the “baloney sandwich.” Heres how the “other shoe” technique plays out. Each leader starts off by describing all the positive aspects of the employees performance. This typically takes much less than half of the allotted time. Then, the leader drops the other shoe, describing in excruciating detail each of the many, many developmental needs of the poor soul on the other side of the desk. - Page 10 - The “baloney sandwich” starts off much the same way, but the leader holds back a morsel of good news for the end, hoping this cheers up the employee as he lurches out the door. How awful for both parties involved! And how unnecessary. Consider how performance feedback could be conducted using Maier’s problem-solving method. First, the leader begins the session not with good news or bad news, but with areas where both parties essentially have the same view of the employee’s performance. Does that happen by accident? Hardly. To be able to identify such areas of agreement, the employee must have completed a self-review before the meeting, using the same performance categories contained on the leader’s form. As in any performance review, areas of disagreement eventually surface and have to be discussed. But if you use Maier’s approach, two events will have happened that would not have taken place otherwise. First, there will be a positive dynamic in the room. Perhaps for the first time, the two parties will have engaged in candid dialogue for 20 or 30 minutes without disagreeing. And second, by the time they get to the areas where they do disagree, they will know that they are not disagreeing about everything, nor even about most things. Typically, using Maier’s technique, the areas of contention amount to much less than half of the performance categories under discussion - Page 11 - (This is especially likely to be true if the end-of-year review is preceded by a midyear feedback session, as was recommended in the previous lecture.) A MANAGER’S RESPONSIBILITY No one should have the title of manager if the people who work for them do not know where they stand in the organization today, and what their prospects are for tomorrow. To mean anything, appraisals must generate lively conversations between the manager and the employee, so that everyone gets on the same page. Such a candid culture of appraisals increases the chances for authentic conversations on any number of subjects across the business. After a while, authenticity becomes a way of life in the company. Authenticity isn’t just good business—it is ethical business. When you’re candid with your people, you’re treating them with dignity. Not every conversation will be easy, and not every message will be positive. But it is a basic human right to be told the truth, and it’s every leader’s responsibility to deliver it. - Page 12 - ! JWI 520 People Management Week Seven | Lecture One - Page 1 - THE ESSENTIAL ART (AND SCIENCE) OF PERFORMANCE EVALUATIONS Most people would agree that candid, timely, accurate performance feedback is essential to the effective functioning of any organization. Why is it, then, you can be all but certain that, in the company youre working for now: • The process is chock full of problems. • The managers doing the assessing generally dont like it. • The employees being assessed like it even less. It shouldn’t be this way, and here’s why. First, if your company’s assessment process is unreliable, people may end up in jobs—even the most strategically important jobs—for which they aren’t qualified. Second, in the absence of competent assessments, it’s virtually impossible to give people accurate performance feedback. Without such feedback, people have no instruction on how to systematically improve their behavior. And third, incompetent assessments generate dysfunctional reward systems. As Jack Welch has pointed out, “By not aligning measurements and rewards, you often get what you’re not looking - Page 2 - for (Welch & Byrne, 2003). If managers aren’t sure who is and who isn’t performing well, they can’t give generous rewards to the people who deserve them, nor can they help low performers become more competent. As for disciplining or possibly terminating perennial malcontents and troublemakers, forget about it! In the absence of carefully documented, highly reliable performance data, any attempt to take corrective action is likely to result in consequences that are far more negative for the company than for the employee. GETTING PERFORMANCE EVALUATIONS RIGHT Every company, of course, will have its own practices and processes for feedback, but managers of the most effective ones generally abide by five rules. Rule No. 1: Give timely performance reviews. Most organizations direct their managers to formally review employee performance once a year. Some companies don’t require even that much, and many of those that do require evaluations never check to see whether the reviews have been done. Worse yet, even when - Page 3 - performance data are shared with employees annually, the data often have little or no impact on the company’s promotion and compensation decisions. For several reasons, performance should be assessed, and formal reviews should be conducted at least twice a year. And remember, formal reviews are no substitute for informal appraisals, which according to Jack Welch, should happen all the time (Welch, 2005). The problems with an annual performance review are numerous. If you only do something once a year, you never get good at it. Because of the time frame, nearly half the feedback you give will be more than six months old, by which time dysfunctional behaviors that could have been quickly corrected have grown into nasty habits. And annual reviews tend to be stressful for reviewers and reviewed alike—not just because it’s such a rare event, but because of when it occurs. The annual review almost always comes at the end of the year, so it can seem to the person being evaluated that everything she has worked so hard for is riding on it: her compensation in the upcoming year, her career prospects, her job security, her self-esteem—all may plummet or soar depending on what she will hear in the space of a single hour. - Page 4 - Given the stakes, even those managers who genuinely desire to deliver candid feedback to their subordinates are less likely to do so, fearing that the people labeled as poor performers will receive smaller pay increases as a result and may even lose their jobs. Thus, the best-run organizations address many of the problems related to an annual review by conducting their formal performance reviews not two but three times a year. And why not? The more feedback employees hear, and the more often they hear it, the better for everyone. Rule No. 2: Include a performance-development component. Giving performance reviews several times a year allows you to focus on different objectives in each one. Sometime in late spring (if you’re on a calendar-year cycle), you should hold reviews that are similar to the traditional annual review, with a critically important difference—the evaluation is for developmental purposes only. That is, no hard copy goes to HR, and no salary or career decisions are based on the evaluation. Conducting such an interim review with no formal consequences has several advantages. Clearly, the level of candor on all sides rises sharply. If your company makes use of 360-degreee feedback, peers and subordinates will be more - Page 5 - willing to speak freely about the person they are reviewing. Managers are less likely to pull punches when talking to their direct reports, because no one will be fired or have her salary frozen as a result of the conversation. In addition, the person being reviewed will be much more receptive to criticism. She’s also likely to be grateful for the six months to improve in her areas of weakness (if she agrees with the feedback)— or to show her boss that the criticisms are invalid. In addition, many organizations find that managers are likely to be more candid in the next, more formal review, because they feel that, as the interim feedback didn’t result in improvement, it’s time to attach some consequences to the subordinates poor performances (Kerr, 2009). This formal end-of-year review should focus on the past, not the future. The conversation will often go something like this: • Discussion of the employees strengths, based on observed behaviors and accomplishments during the year just ended; • Discussion of her development needs, based on observed behaviors and accomplishments; and • The implications of her performance on her compensation and career progress. - Page 6 - The third review comes a month or so later, when t ... Purchase answer to see full attachment