International HR Forum - Quarterly Meeting 15 July 2014 - It's Time to Revisit Performance Management!

Life is full of big mysteries. What exactly did happen to the Marie Celeste? What causes spontaneous combustion? And why did it take Fulham so long to fire Martin Jol?

Perhaps the biggest mystery of them all, and one that keeps me awake at night, is why companies put so much emphasis on the importance of performance management only to completely undermine these good intentions through having an annual, backwards-looking, ratings-based, tick-in-the-box approach to reviewing performance that is deeply unpopular with managers and not trusted by employees?

The quarterly International HR Forum meeting on 15 July was devoted to trying to get to the bottom of this enduring mystery. Very timely, given the “hot topic” status this has achieved in the HR press of late, the emphasis that Peter Cheese put on this during his keynote at our annual do, and the growing trend amongst some pretty big players to be more innovative in this area.

First up to set the scene was the CEB’s Kim Bast. Kim proved very adept at pulling out the salient points from some pretty dense slides! The key takeaways were:

·         Business leaders require a 20% improvement in “breakthrough employee performance” to meet their goals.

·         The raft of statistics that show just how dissatisfied business leaders, managers and employees are with their performance management processes.

·         The changing business environment (globalization, remote working, matrix organization structures, the increasing importance of collaboration to get things done, etc.) has also put stresses on traditional performance management processes.

·         Traditional performance management processes focus on individual task performance, whereas network performance (how effective an employee is at improving their own and other people’s performance by working with and through others) is now just as important. So performance has shifted, whereas performance reviews have not.

·         The CEB’s model of high performance is based on the concept of “enterprise contribution” which is an employee’s effectiveness with their individual tasks, their contributions to others’ performance, and the use of others’ contributions to improve their own performance. Individual Task Performance + Network Performance = Enterprise Contribution => Achieving Business Goals.

In summary, the traditional annual, ratings-based approach to reviewing past performance is no longer compatible with the need to provide quality feedback not just on past performance but also on future requirements on an ongoing basis.

Simon McDougle then took us through the journey that Adobe have taken. Imagine a world where performance management, rather than an annual HR-owned, HR-policed, process-driven, ratings-based, backward-looking activity becomes an any time, any format, ratings-free, manager-owned, HR-enabled activity that focuses as much on future outcomes and development as prior performance and contributions? Adobe’s “Check-In” process provides just that world. It revolves around the following:

·         Feedback. What contributions have you made to enterprise success? This part of the discussion is based on observable behaviour and activity not just from the manager, but from peers and other stakeholders who have worked closely with the employee.

·         Expectations. What will you be doing in the following 6-12 months? And how are you going to be doing it? In the sales world this has been adapted to “Get It Done” and “Do It Right”. In either scenario, the “how” is as important as the “what”.

·         Growth. A combination of identifying development within the current role, and also discussing career aspirations.

Other processes that traditionally had strong links to performance ratings were de-coupled, with managers being empowered to own and distribute the merit and bonus pots that get allocated to them. There is guidance provided (e.g. market data, position in range data, etc.) and governance has been retained (through a calibration process).

It was clear that this was a major cultural shift, but one that “before” and “after” focus groups have shown to be a highly welcomed shift. Simon highlighted the following as key to enabling this transition:

·         Recognition that is a journey.

·         Executive championing.

·         Equipping managers with the right skills (coaching, feedback, difficult conversations, etc.).

·         Plenty of communication. Adobe went beyond email to also embrace social media and a dedicated intranet site.

·         Recognizing that in certain geographies certain aspects of Check-In may not work. Such as 360 in India.

·         Incorporating the critical skills around Check-In to the leadership capability model.  

Finally, Rod Ireland took to the stage (well, the floor) to share with us key levers that can be used to make the transition to a more innovative approach to performance management. This was based on his experiences at Intel, when they went through this particular journey. There was a lot of resistance to change in certain parts of the business – “we’ve always done it this way”, “it was good enough for me, so it’s good enough for them”, “how can I manage pay and allocate bonus without ratings?”, and so forth.

The levers Rod advised us to use were as follows:

·         Legal. Not just because of the “weight” that the opinions of lawyers carry, but to avoid the sorts of litigation that Intel experienced.

·         Data. As the CEB studies have shown, there is plenty of data to support the need to move away from traditional models of performance management. Within our own businesses there will also be other sources of data. Attrition spikes after the annual performance review season, feedback from esat surveys, looking at changes in perception at point of recruitment to current day, focus groups, etc.

·         Cultural considerations. The shift from directive to coaching, to strengths based leadership, etc.

·         Environmental considerations. Chief amongst these are the more rapidly changing nature of the market, companies seeking to differentiate through innovation, the need to engage all, and the move to reward collective contributions and behaviours, not just individual performance and outputs.

So, as my teenage daughter would say, we had, like, a super-amazeballs sesh. Massive thanks to Kim from the CEB for providing the context drawn from the rich data provided by the CEB’s members, to Simon for taking us through Adobe’s journey, and to Rod for equipping us with some levers to anticipate and overcome barriers. Performance management is one of the most critical activities that a business undertakes, and the process must support the reality of what this is today by enabling real-time feedback and coaching on not just past contributions but future expectations and potential growth.

And a final thanks to Simon for hosting the session, and for all of those who took time out of their busy schedules to make it a highly interactive occasion.

Enjoy summer, see you in three months for the next quarterly meeting!

The International HR Forum - Annual Do Number Two - 14-15 May 2014

The second IHRF Annual Do took place over 14 and 15 May 2014.

Still a “Do”, as the proceedings are far too informal and unstructured for a conference, and not quite trendy enough to be an unconference…

And what a “Do” it was. Standing room only at times, and a great mix of external gurus sharing their expertise, IHRF members with innovative and interesting case studies, and of course Peter Cheese, he of CIPD leadership fame.

Of course, as this is very much an amateur event there was the odd hiccup along the way, but not too many people noticed them. Apart from the first one, which happened right from the off, when the first presentation disappeared in to the ether. It was enough to drive me to drink, and I probably would have had a few, were it not for the fact that first up was Dr. Adam Winstock, one of the foremost experts on addiction medicine. A slightly unusual opening to an HR event, but an eye-opening one as he took us through the often overlooked (or even unknown) perils of drug and alcohol use and its impact in the work environment. It was quite mind-boggling to hear how many people actually do partake in the two hours before they start the working day…

We then experienced a “slight crunching of the gears” as we moved from addictions to trends in the world of European Works Councils, where Philip Sack explained where the next developments were likely to be. Company-funded expert advice for the EWCs, training, etc. along a battleground where the EC and other authorities are looking to extend the roles of EWCs as opposed to the corporate world where keeping the scope quite limited and narrow is the order of the day. It was interesting to hear about the mixed experiences amongst the attendees with EWCs. A necessary and largely pointless evil v. a force for good? Discuss…

Next up was Nigel Baldwin, IHRF stalwart and award winning HR dude for the harmonization project within Thales that he and fellow IHRF member Joe Ales presented last year. This time around Nigel took us through Project Advance, which was an initiative within Thales to identify the role of HR, its core processes, the coverage model, and ultimately the skills of the entire UK HR team. The drivers were to reduce costs, raise service quality, increase capabilities within HR, improve the “customer experience” and make team members proud to be part of a fit-for-use HR team. The CIPD’s competency framework for HR business partners was used as the benchmark.

Nick South, from Boston Consulting Group, then took us through some research conducted with the EAPM which quantified the differences between companies with high capabilities in managing people, and those with low capabilities. A number of practices across 10 broad HR categories were identified, the key learnings were to ensure alignment between company strategy and HR activity, to break down silos in favour of effective cross functional and regional collaboration, and a continuous monitoring of HR effectiveness through the use of effective data.

Following an employment law update from DLA’s Adam Hartley, Geoff Boot took to the floor to lead an interactive session on the use of HR metrics. It was interesting to see the proportion of the room where there was not a clear linkage between any HR strategy and the metrics in use, along with the range of metrics used, and the scope for what was notionally the same metric to have different meanings.

Possibly the hottest topic over the two days was the growing trend in the world of performance management to move away from an annual fixed-in-time, documented, ratings-based performance review process to something that is ratings-free with no format and no set timing. Rod Ireland took us through the journey they have been through in parts of Intel, whilst also drawing on Adobe’s similar experiences. Whilst the desired goal of a more “natural”, engaging, ongoing, coaching-based approach to performance management was widely accepted, the steps required to get there along with the implications of de-coupling processes traditionally dependent on a performance rating were seen as potential issues to overcome.

The lure of alcohol and nibbles proved too difficult to resist, so Day One came to an end…

Day Two got off to an inauspicious start with a couple of hangovers, a presenter pulling out at short notice, and 9:30am passing with no sign of our star guest, Peter Cheese, CEO of the CIPD! Good old South West Trains… Fortunately Peter wasn’t too late, and what followed was a 90 minutes of insight in to Peter’s thoughts on the role of HR, skills and capabilities within the function, and the role of the CIPD. Refer to my separate blog on this for a more detailed overview.

David Bickerton then took us through the approach to employee engagement and the use of pulse surveys at BP, which has undergone a shift following the Deepwater Horizon disaster. His key tips were to ensure that any surveys are quick to complete, that they have visible and actionable outcomes, that there is sufficient focus not just on the employee experience but also manager responsibility for championing engagement, and that the results and hard-wired in to the business planning process. He also had a cautionary tale around the need to ensure the data security of any third party web based survey tools used…

It was then the turn of Marc Weedon to take to the stage (well, the floor at the front of the meeting room) to outline the approach that Ciena has taken to crafting out a 3 year people plan. What were the key points? The promotion of global coherence and consistency whilst recognizing the need for local adaptation. Ensuring the plan is aligned to business strategy and values. Making sure that the plan defines, resources and prioritizes key activities and has at its heart the ability to attract, develop and engage top talent. And being clear about the critical enablers – OD, change management, internal comms and HR capabilities in this particular case.

Following a further employment law update, Mike Rugg-Gunn from Norman Broadbent’s Leadership Consulting practice led an interactive session on the role of psychometric assessments in the workplace. The room split in to various camps to work through why they were believers, agnostic or non-believers, and then these thoughts were shared amongst the wider group. The main learning was to ensure that any tool used was appropriate for the task at hand, and that it should be a complementary process to back up and support decision making rather than being the main thing that drives decisions.

So that’s it. The curtain closed on our second annual event. It seems to have made a successful transition from a “let’s see how it goes” kind of experiment to what looks like being a permanent fixture in the IHRF calendar.

A special thanks to all of those who contributed, to all of those who turned up and interacted, to DLA for hosting the event and laying on the booze and bites, and finally to Rob Cook who helped me with the planning and logistics…

See you next year J

An Audience With Peter Cheese - CEO of the CIPD

OK, I couldn’t resist it, and I am sure Peter has heard it oooooh at least a thousand times before, but at the start of our annual two day International HR Forum event I did say that we would be hearing from the HR profession’s “Big Cheese”.

A lame gag, it is clear that Michael McIntyre won't be quaking in his comedy boots. I don't have his floppy hair anyway. 

But it seemed appropriate for the informality and occasional irreverence that was a hallmark of the two days.

I’ll post a separate blog about that event as a whole over the weekend, in between encouraging my son to do slightly more than the square root of bugger all in preparation for his GCSEs next week.

In the meantime though, I thought that our time with Peter merited more than a few lines buried within an overall summary of the annual event, so here’s a more detailed review of the 90 minutes he spent with us.

So what were the key themes discussed?

Policy:

• Never been a better time to be in HR! Business is now looking beyond rules and regulations in to the areas of ethics, behaviour values, and culture.
• Leadership is the #1 concern of the CEO. Not just the exec team, but leadership at all levels, and the need for strong people management.
• There is increasing recognition that HR is a key business enabler, so Peter is getting increasingly involved at a policy level with discussions with government, trades organisations, other professional institutions, etc.
• Needs to be a more effective tripartite discussion between government, education and business.

HR capabilities:

• Must talk the language of the business. The language of business is the language of numbers. Get comfortable with talking numbers.
• Take advantage of the fact that most of the value of the company is in its people.
• P&L looks at past performance, the wake of a boat. It doesn’t predict future performance, where the boat is going.
• Robust people analytics required. Not just the usual suspects. How do you measure leadership effectiveness, culture change, etc?
• Help businesses find practical ways of understanding and reporting on the value of their people. Check this out: http://www.cipd.co.uk/hr-resources/valuing-your-talent.aspx
• Adopt a common language. Just what does “headcount” mean?
• Recognize what diversity is actually about. Not just age, race and sex. It also covers aspiration, education, opportunity, flexibility, etc.
• Need to deal with a paradigm shift in the world of work. No longer 9 to 5, office based, full time etc. Need to recognize flexibility, remote working, the contingent workforce, etc.
• Engagement… Most companies recognize it is a “good thing”, but most don’t have an engagement strategy. HR has a role to play in bridging that gap
• Needs to be an alignment of purpose, autonomy (giving space for people to do what they can do) and mastery (to provide opportunities for growth and development). These are the key drivers of engagement.
• Performance is not just “what I do” but “how I do it”. Increased focus on behaviours, culture and values.
• Performance management is changing to reflect the ongoing nature of what it is. Once-a-year, paper-based, risk-managing, ratings-based processes are no longer fit for use with today’s modern workforce.
• Don’t lose sight of the basics. What is human behaviour at work? How do we learn? What motivates us?
• Can we really keep referring to Maslow’s hierarchy of needs, using Kubler-Ross’s bereavement curve as a tool for change, etc. etc. when they were created decades ago in a completely different environment?
• Managing change is all about trust and opportunity, not bereavement. The line has a key role to play in instilling trust and taking people with them.
• The “permafrost of middle management”… A key pinch point in any organization, the intersection of strategic and operational, yet too often the blocker. How do we unlock this layer, make them more open to change, add that missing something from top to middle?
• Don’t be afraid to engage in “reverse mentoring”, so you know what the latest trends and developments are amongst the new generation of workers.

The CIPD:     

• Playing catch-up with the likes of ACA, CIMA, etc.
• Will be more demanding of the qualifications, professional standards and capabilities needed.
• There will be a more differentiated membership offer.
• Looking at overhauling the branch network to improve consistency, better reflect regional business agendas and raise the quality of events.
• Reviewing digital strategy so that it will be easier to access the wealth of content on the CIPD site. “Content, Community, Connection”.

International:

• Some 10% of the CIPD’s 135,000 members are based overseas.
• Second largest HR institute, after SHRM (US).
• Recognition that more can be done to help those UK members who have complex international roles.
• Building a collaborative network amongst other country-based HR professional institutes. Particularly in Asia and the Middle East. Starting to focus on some parts of Europe.
• The key will be not to over-extend.

So what was the reaction of the assembled masses? Uniformly positive, actually. Here’s a summary:

• Good to see that he had a clear vision for the role of HR, and the CIPD.
• Great to see such passion and conviction behind the insights.
• If Peter achieves only a fraction of what he articulated whilst in charge of the CIPD then the profession will still have taken great strides forward.
• Very engaged.
• Clearly interested in the international piece.
• No notes, not a powerpoint slide in sight, a very impressive performance.

So many thanks to Peter for taking time out to attend the event. With all due respect to all the other contributors this was in fairness probably the highlight of our two days, and for that I will forgive him for giving me kittens by being a few, fashionable, minutes late :)