The Mix Tape: Ep. 6 — Performance Management

How can you make that yearly evaluation less...dreadful? Dr. Sara Shondrick is Mix Talent's Lead of Talent Consulting, and in today's episode, she tries to find the answer to that question. She talks to Dr. Rose Mueller-Hanson, who is co-author of the book "Transforming Performance Management to Drive Performance: An Evidence-Based Roadmap," and an expert on equipping managers and subordinates alike on satisfying, healthy, and productive performance management.

Transcription

Unison-

Welcome to the Mixtape.

Valerie McCandlish:

I’m Valerie.

Natalie Taylor:

And I am Natalie.

Valerie McCandlish:

Thank you for coming back for another episode of the Mixtape. This has just been such a fun ride so far and, Natalie, it’s been really fun to be recording these intros and outros with you and be learning such awesome information from so many leaders in our industry.

Natalie Taylor:

I agree, Val. It’s been a really fun project and I’ve really enjoyed it. So jumping into our topic for today which is performance management, we actually posted a poll on LinkedIn asking what is the number one thing you most look forward to in performance management discussions which I think is a great question. We’re wrapping up for the year and it’s getting to be that time of year for these types of discussions. So the feedback we received, we got 175 votes. Feedback on performance came in first with 45% of the votes, salary adjustments came in second with 37%, goal setting was at 15%, and then other was 4%. So I think these conversations are critical to career development, of course, and I think it’s really interesting to see how people approach these conversations individually or at the organizational level.

Valerie McCandlish:

For sure, Natalie. I was actually one of the many who responded that they were looking forward to discussions on performance and hearing that feedback directly on what I’ve done well, what I could be doing better, and I think it’s just such an awesome time to connect with your mentor or your manager and hear directly from them on how you’ve been doing and I think a lot of people don’t really look forward to that conversation. But here at Mix, we actually have an awesome program for this that was developed by our speaker today, Sara Shondrick. And because of the efforts that she’s put in, we have a fabulous way to keep track of what we’re doing well to do goal setting and to really just set long-term career goals and how we can continue to develop in a way that makes you actually look forward to the conversation.

Valerie McCandlish:

Sara is a valued leader here for our talent consulting team and actually works with Chad that you listened to a couple weeks ago. She herself comes from a long career in the industry under people development and is an IO psychologist. So she just has such a breadth of knowledge to share.

Natalie Taylor:

I agree, Val. And we are very thankful for all of Sara’s efforts here at Mix in developing our performance management tool. I think we’ve received great feedback internally on it and it’s gone really well.

Valerie McCandlish:

So without further ado, we will kick it off to Sara and Rose to discuss their take on performance management.

Dr. Sara Shondrick:

Hi, everyone. It’s Sara Shondrick. I lead our talent consulting team here at Mix Talent and we create leadership solutions and talent management solutions for our clients. I’m here today with Dr. Rose Mueller-Hanson, co-author of the book, Transforming Performance Management to Drive Performance: An Evidence-Based Roadmap, and AD/CFO of Community Interface Systems, a nonprofit organization serving adults with developmental disabilities. Like myself, Rose has a PhD in industrial and organizational psychology and a strong passion for creating more effective and engaging approaches to performance management.

Dr. Sara Shondrick:

Rose, thank you so much for being here. How would you describe IO psychology in a nutshell for those who might not be familiar with this field?

Rose Mueller-Hanson:

Well, Sara, thanks so much for having me. I’m really happy to be here and you’re right that a lot of people are probably not that familiar with IO psychology. It’s basically applying science and evidence-based practices to work. So we hope organizations tackle really wicked problems like how to hire the best employees in one of the tightest labor markets we’ve ever seen, how to help people really push forward their diversity, equity and inclusion efforts to make them really stick, how do we retain people during this time of disengagement and the great resignation? And of course, how do we improve people’s performance? What would you add to that, Sara?

Dr. Sara Shondrick:

Yeah, I certainly couldn’t have said it better myself. There are so many challenges associated with the move to a virtual environment and how organizations are able to continue to build a culture and type of environment that’s going to support their long-term success. One of the benefits, I think, IO psychology people add to the practice is our objective focus on data and science to inform those decisions so we can bring a lot of power based on the academic and practical research to support organizations in doing what’s best for their strategy and long term potential.

Dr. Sara Shondrick:

Rose, what got you so interested in performance management?

Rose Mueller-Hanson:

Yeah. Well, I have done a lot of work in my career helping organizations to transform their performance management approaches and early on, we were so focused on components of the system. What should the rating scale look like? What should the review form look like? What’s the right cadence for goal setting and review conversations? And we realized that organizations and people weren’t really getting a lot of value from the process. Some people were spending a lot of time really thinking about aspects of the system and there was a lot of angst around it, of course, especially when it was tied to pay but not much impact on actual performance. And we realized that we were really focused on the wrong things. We were focused on the process instead of the people and we understood then that we needed to shift our emphasis to communication and relationships.

Rose Mueller-Hanson:

And luckily, research has really confirmed these observations. So I’ve been really passionate recently about flipping the script and helping people have better performance conversations and designing better approaches that really focused on that people aspect. What got you into the field, Sara?

Dr. Sara Shondrick:

Yeah. Thanks for that. I think it’s so interesting now that there’s this greater shift towards focusing on the people having the conversation rather than just the process or the system that supports that conversation. So, like lot of people, I, early on in my career and even in high school, experienced a lot of different types of managers and types of organizations, some who do this really well in terms of helping their employees grow and foster ongoing development and others who clearly could use some support in getting to that point.

Dr. Sara Shondrick:

And particularly, once I started consulting with organizations, I saw a strong opportunity to be able to create more value while still simplifying the process so you get the biggest impact without all the bureaucracy that can oftentimes come along with some of these more advanced performance management systems.

Dr. Sara Shondrick:

Rose, in your roles as a business leader and consultant, you’ve seen a number of different performance management practices. From your perspective, what should a company be considering when implementing a performance management process?

Rose Mueller-Hanson:

Yeah, Sara. Well, I think first of all, it’s really important to consider what you want the process to achieve when you set out to design it. And we used to have performance management workshops where we’d ask people to give us some feedback on what they wanted their system to achieve and we’d get answers like, “Well, we want it to help us defend against legal challenges and we want it to help us make pay decisions. We want it to help us empower people and develop them.”

Rose Mueller-Hanson:

Frankly, just too many goals. And if you try to accomplish too many things with one system, you’re probably not going to accomplish any of them all that well. So it’s better to get clear on what is your most important outcome. For example, do you really want it to drive your pay decisions or do you really want to help develop people? And we’ve seen organizations take very different strategies. For example, some organizations do pay differently depending on the person’s performance and they have a lot of budget to be able to make those distinctions. And so for them, it is very important to have a performance management system that supports their compensation practices.

Rose Mueller-Hanson:

On the other hand, you have many organizations who frankly don’t have the budget to make big distinctions in pay so that’s not the most important thing for them. So you really have to decide what is that most important outcome, and then identify your set of guiding principles that support that outcome. For example, is it simplicity? Is it transparency? Is it empowering and engaging employees as part of that process, focusing on relationships? Whatever those guiding principles are, you need to really make sure that they fit with those goals. And in our experience, getting really clear on what you want your system to achieve and then what are the principles that are going to support that is a real game changer for organizations because what it does is it gives you that guidepost to then evaluate any practices or ideas or processes that you might want to implement against those guideposts and really make the decision, “Okay, is this practice, is this tool, this approach going to really support our goals or not?” And if it’s not, it’s fluff, and it frankly shouldn’t be in the system.

Rose Mueller-Hanson:

So this has been a real game changer for organizations because they’re able to eliminate things that don’t support their goals.

Dr. Sara Shondrick:

That’s such a great point. If you have too many goals right out of the gate, it can be really difficult to prioritize any one of those. And it’s so funny that you mentioned that because one of the challenges oftentimes with employee goal setting is the same exact thing where people want to set a bunch of different goals and it’s impossible to really keep your focus on all of those different things instead of putting your energy and focus on what is going to be the most important thing that can drive your performance and take it to the next level.

Dr. Sara Shondrick:

In your experience, what tips or strategies can help companies meet their performance management goals?

Rose Mueller-Hanson:

Yeah, that’s a great question, Sara. I think one of the things, first of all, is make sure you have the right people involved to drive the process. So you don’t want this to be just an HR initiative because then it’s going to feel like something extra that people have to do. That’s maybe not directly connected to the mission. So you really want business leaders to be very involved in your design process alongside of HR so that you can make sure that you’re constantly focused on how the performance management system really supports the goals of your organization.

Rose Mueller-Hanson:

The other thing is to really invest time in thinking through your design at a strategic level before you get into the nitty-gritty of all the day-to-day decisions. So for example, a lot of people would come to us and ask questions like, “Okay, everyone’s talking about having no ratings, should we have ratings or not? Should we have three points or five points on a rating scale?” And in our view, that was really the wrong place to start. The right place is to ask what is our organization trying to achieve and then how does our performance management approach either support those organizational goals or get in the way.

Rose Mueller-Hanson:

So for example, a lot of organizations are looking to be innovative, they’re trying to transform their entire culture to be more innovative. So then you have to ask yourself, “Well, how is my performance management system really supporting that goal? Do I have a very cumbersome process for goal setting where it takes a long time for people to actually set goals and get them approved and it’s really hard to change them?” So you got to really ask yourself those hard questions around, okay, to what extent is my performance management system really supporting what the organization’s trying to achieve or honestly, is it just getting in the way?

Rose Mueller-Hanson:

And then finally, I’d say, just be careful of chasing the latest best practices. So the popular press is full of really interesting and cool articles about how various companies have transformed their approaches and what new and innovative things they’re doing and that can be useful background, but you don’t want to just mirror what others are doing because you really need to design the approach to fit your unique goals, culture, and what you’re trying to achieve. So really think about your unique needs and culture and how your performance management system fits with that culture.

Rose Mueller-Hanson:

And I understand at Mix Talent, you had the opportunity to build a performance management approach from scratch while still being a startup. Can you talk a little bit about your approach, Sara?

Dr. Sara Shondrick:

Yeah, thanks. It was such a unique opportunity because there was nothing in place already so it provided us with a blank slate to really think about what was going to be most impactful and effective in our culture while also helping us to reach some of our goals.

Dr. Sara Shondrick:

So you made a really good point about the importance of starting with the right questions in terms of what you want to be able to accomplish through that approach. And what we thought was most important for our organization was to be able to support our employee’s professional growth despite the fact that we work in a really ambiguous and pretty unstructured environment given that we were such a new business. So the sky was really the limit in terms of what employees could do and where we could take the business. But at the same time, that openness of different opportunities can be really challenging for employees in figuring out what should I be doing right now.

Dr. Sara Shondrick:

So we started with that goal of finding to really focus on professional growth and clarity. And based on that goal, we conducted a lot of research looking at both the academic literature in terms of what makes for a successful approach to set a goal, what should it focus on, how do you measure success, what are the right behaviors and results to focus on when thinking about whether somebody’s on track or whether they need additional support, and how is that going to tie into some of our broader philosophy around compensation, promotions, all the above.

Dr. Sara Shondrick:

So we look at guiding principles first and wanted that to service the foundation of what we built and knew that we wanted to keep it simple. Definitely didn’t want this to become something that was such a bloated process that took a ton of time. We also wanted it to be agile though, and recognize that in everybody’s business, things change very quickly. We’ve learned a lot through that over the past year and a half how quickly our whole situation and operating environment can change. So being able to quickly adapt to those changes while still creating clear expectations and elevating… excuse me. As guiding principles, we knew we wanted to keep it simple about agile while creating clear expectations and evaluating performance. We knew we didn’t want this to feel like a top down HR initiative because that simply wasn’t our culture. So instead, we wanted this to be something that employees and managers would want to initiate and actually engage in versus being something that they felt they had to do as a check off the box approach.

Dr. Sara Shondrick:

Also, so many people struggle with giving feedback. We wanted this to be something that could provide regular ongoing dialogues and foster forward-looking conversations and coaching that could help people understand what they can do differently next time in the future before things turn into big issues. So for us, it was really focused on supporting employees, giving them the space and environment at which they can ask some questions, ask for help and focus on what’s going to elevate their performance in the future rather than harboring down and focusing on what they’ve done in the past.

Rose Mueller-Hanson:

Yeah. Sounds like a really unique opportunity. And so many companies are trying to make ongoing performance conversations actually stick instead of just an event that happens once or twice a year. So what’s been Mix’s approach to support that ongoing dialogue?

Dr. Sara Shondrick:

Yeah. That ongoing dialogue is such a challenge for everybody. A lot of companies invest so much time and resources into developing really strong performance management platforms, systems, and processes yet struggle to get performance to be something that’s regularly talked about on a day-to-day basis. There’s also a real disconnect between managers and employees in terms of how much feedback they desire. Employees are actually really eager for more constructive as well as positive feedback, but people tend to assume somebody doesn’t want my feedback from them. It’s going to hurt, it’s going to be painful to hear this constructive feedback. So it can be hard to deliver constructive feedback to people.

Dr. Sara Shondrick:

At Mix, we ask our employees to set regular one-on-ones with their manager and that time is really theirs to talk about feedback, talk about what’s going on that weekend, what challenges they’re facing, where they want additional support, and also just to check in about their ongoing development. This time provides an opportunity for them and their manager to align on priorities, celebrate those accomplishments over the last week and month, and just check up on goal progress so that it doesn’t become something that you realize, oh, it’s been six months. I really need to check in and see how Joe is doing on their performance goals.

Dr. Sara Shondrick:

However, a lot of managers just aren’t really sure how to handle those performance conversations. So we also train our managers on each step of the process, helping them to understand how to have informal conversations around coaching and feedback in the moment or as soon as possible after an event has taken place so that the employee can learn from it as quickly as possible. We also realized that it’s not very helpful to give feedback on what went wrong in the past. You can’t change the past. So instead, let’s focus on the future and brainstorm ideas regarding how we can be more effective next time.

Dr. Sara Shondrick:

In a way, that’s a true partnership rather than I’m holding you accountable for not giving a good presentation in that last meeting. It’s about, “Hey, let’s talk about how we can get the audience more engaged in this process so that they are excited to hear your message.” These dialogues lead to a two-way collaboration between the employee and manager so that they can collaborate to figure out what’s the best approach moving forward. And that gets employees excited rather than demotivated because they’re part of the process and the solution, and they feel that support from their manager.

Dr. Sara Shondrick:

Rose, what approaches have you seen work well to support ongoing performance management conversations in the organizations you’ve worked in?

Rose Mueller-Hanson:

Yeah. When we were writing the book, we actually polled a number of HR leaders from different organizations and asked them, what are your biggest pain points in your performance management systems? And the number one thing hands down, wasn’t even close, was we need managers to do a better job of giving feedback and coaching. So that is definitely one of the biggest needs I hear from HR leaders and I don’t think that’s changed in the last several years. So this question of how do we improve the quality of feedback and conversations is huge and we spend a lot of time on feedback, training managers, how to do it better, and putting a lot of pressure, frankly, on them to get it right. One of the things I think that’s a real challenge is we seem to think that managers should be the sole providers of feedback. And in today’s matrix environment, that can be a real challenge because managers often aren’t working with people day-to-day or perhaps there’s other project managers who are overseeing that day-to-day work.

Rose Mueller-Hanson:

And so, it’s really difficult for that manager to have enough information oftentimes to give regular feedback to folks. And so, what I think has a lot of promise is developing more supports for managers so that people can get their feedback in real time from the environment rather than just relying on that manager. So think about it like your speed sign in the workplace. So those your speed signs that you see on the side of the road, imagine if you had to rely on police officers to pull us over every time we were speeding and tell us how fast we were going and how that compares to the speed limit and tell us not to do it again. That would be a real drag and, of course, not very feasible but those your speed signs have turned out to be super effective.

Rose Mueller-Hanson:

They tell you instantly how fast you’re going, they flash at you if you’re going too fast over the speed limit, they give you an indicator of how fast you should be going, and it’s actually been shown through research to slow people down. So just think about how do we then infuse that same idea in the workplace? What are those natural opportunities in the environment that we can get to help people get feedback in real time? So for example, customer feedback, financial results, status reports from projects, whatever it is, it’s already present in the environment. And then, that really shifts the role of the manager from the sole provider of feedback to that of coach to really help people make sense of that information and then take action.

Dr. Sara Shondrick:

Yeah, that is such a good point because managers just can’t be everywhere and all knowing so it makes sense to be able to supplement their observations with additional data points and that turns them into that partner rather than this person that’s coming to crack the hammer down on you. I imagine that’s also particularly helpful when working with virtual employees. As we all know, over the past year and a half, COVID has thrown this huge unexpected wrench in terms of how we do everything. In your perspective, how do you think COVID has impacted performance management in general?

Rose Mueller-Hanson:

Oh yeah. Sara, the impact has been huge without a doubt. We’re definitely seeing higher levels of burnout and disengagement across the board. And so, I would argue that we need good conversations now more than ever. And what I think has been most impactful is managers taking more time to just check in with people to see how they’re doing and to express that they care about them as human beings. So setting aside the performance conversation for a little bit and just asking, how are you? How are things? What’s going on in your world? How can we help? That’s been really important.

Rose Mueller-Hanson:

Also, we’re really seeing a need for managers to do more to help people actively solve problems. So we’re encountering many more problems than we have in the workplace and, of course, many new challenges that we didn’t even know existed. And so, the manager’s role then becomes really important because we want managers to think of themselves as coach and problem solving partner and not just, “I’m here to judge you, I’m here to evaluate your performance,” but “I’m here to be your partner and to help you figure out how things are going, what are the barriers and how can we work together to really overcome them.”

Dr. Sara Shondrick:

I love that. That empathy, compassion, support are so incredibly important during these types of difficult times and it can be really hard to recognize when to be empathetic versus when to challenge your teams. But the best leaders recognize how to do both and play that balance well. As you mentioned, being a problem solving partner to your team seems so critical today. Some managers tend to solve all their employees’ problems for them and think the best thing they can do is protect and serve their team in all forms. But asking those open-ended questions that get your team to really think about the problem, considering it from a new perspective and realize what they might be missing about the problem can be so much more helpful because you’re teaching them how to fish rather than doing all the fishing for them.

Dr. Sara Shondrick:

One last question for you. In your book, you talk about the difference between performance measurement and performance ratings. Can you describe for us those differences? And I’m also curious on your perspective with performance ratings. You mentioned those earlier. Are they worth it?

Rose Mueller-Hanson:

Oh yeah. Absolutely. Well, that’s been a question on everyone’s mind for the last few years, right? To rate or not to rate. And the research has really been mixed. So on the one hand, there are some research that suggests that when people get feedback and ratings, it activates the flight or fight mechanism in their brain and it makes them defensive and shuts them down so that’s pretty compelling. On the other hand, there’s equally compelling research that performance ratings can actually be very useful to let people know where they stand and it does tend to help improve performance. So I think it’s left organizations, frankly, with more questions than answers.

Rose Mueller-Hanson:

Well, I think one of the challenges is that we don’t often distinguish performance ratings from performance measurement. So by definition, performance ratings are backward looking, as you may mentioned earlier, Sara. They provide an evaluation of past performance and they do have their place. They can be useful to give people an overall indication of where they stand and what they could possibly expect in terms of a raise or promotion, but they do come too late to impact current performance. So if you’re using performance ratings as a way to impact performance, it’s probably not going to be all that useful.

Rose Mueller-Hanson:

On the other hand, performance measurement can really help impact current performance. So performance measurement is that ongoing process of getting real-time information about how things are going so that you could course correct and improve for the future. So it’s like that your speed sign concept that I talked about earlier. What you want to do is get multiple sources of information on how things are going in real time so that you can use that data to get a better result and done well. That doesn’t need to come with necessarily a judgment about how that person’s doing and whether or not they’re going to get promoted or what kind of raise they’re getting. It’s really just information that you can use to get a better result in the future.

Rose Mueller-Hanson:

And so, both measurement and ratings have their place and employees appreciate that distinction and they appreciate when managers and organizations are transparent about how performance measurement is going to be used, about how performance ratings are going to be used. And the bottom line on ratings is you really want to think carefully about what purpose those are going to serve in your organization. Again, if your compensation practices are tightly tied to performance and you’ve got a lot of money at stake, then performance ratings become much more important. If there isn’t a lot of money to make discretionary salary increases, then perhaps ratings are a little less important.

Rose Mueller-Hanson:

I think one key recommendation for any organization is don’t make them too complicated. If you have them, communicate what you’re going to use them for, make them straightforward and easy to understand and explain and make sure, of course, that they’re based on job-relevant criteria.

Dr. Sara Shondrick:

I love that. It goes back to your earlier point about the importance of balancing simplicity with the impact that you want to have. And it seems performance management then is about helping people understand how things are going before those decisions are made which fits really well with employee’s desire for more transparency, more understanding of how they’re doing so that they can make those course corrections and continue to get better at what they’re doing.

Dr. Sara Shondrick:

This has been such a fascinating conversation, Rose, and it’s been so fun to get to nerd out with a fellow like-minded IO psychologist about performance management. What kinds of major takeaways would you want to leave our listeners with today?

Rose Mueller-Hanson:

Yeah. Well, if there’s one thing that I hope people take away from today, it’s that the nuts and bolts of your performance management approach will probably not matter so much in the end as much as a focus on really improving communication and relationships among employees and managers. And organizations who have made this investment often see really tangible improvements in engagement, retention, and performance. Now, I wish I could tell you, Sara, that there’s a magic bullet to help managers have better conversation skills, but as we know, there really isn’t.

Rose Mueller-Hanson:

And so, organizations who have been the most successful have really approached this holistically and have sought to infuse these practices throughout their entire culture. So it’s not just about the training you provide although training is really an important. It’s also about how you select managers in the first place. Do you pick people that already have some of these skills or the potential to have these skills? Do you talk about the importance of it? Are managers held accountable for actually doing it well? And is this communicated in every aspect of your people practices?

Dr. Sara Shondrick:

Well, I was really hoping you would say that there is a magic bullet that helps solve all these challenges. But it does sound like at the end of the day, we really need to get back to putting people in the middle of performance management and focusing on how we can improve those conversations.

Dr. Sara Shondrick:

Thank you so much for chatting with us today. It’s been a real pleasure.

Rose Mueller-Hanson:

Well, that was really well said, Sara, and thank you so much. It’s been a real pleasure and I’ve enjoyed nerding out with you as well.

Valerie McCandlish:

Thank you again so much to Rose Mueller-Hanson and Sara Shondrick for being on our episode this week. As a reminder, Rose is the author of Transforming Performance: An Evidence-Based Roadmap. So please take a look at her book and if you’re interested in performance management further, we’d love for you to give that a read.

Natalie Taylor:

Yeah, Val. That’s a great resource to have. I know that we keep books like that here in the office so those are great tools for our teammates. And, I think, traditionally, these conversations can be intimidating to boil down your whole years’ performance into one conversation, can be a little bit scary but I love to see leaders like Rose striving to make this a positive experience and getting the word out there on how to do it.

Valerie McCandlish:

Yeah. I agree, Natalie. But thinking back to when we introduced this episode, I obviously was really excited about receiving feedback and heading into our performance management and evaluations and not everybody has that same sentiment. And we actually had a bit of a training on this previously here at Mix where we broke down what does it mean to actually sit down and do goal setting and what does it mean to sit down and evaluate your performance, and why do we always dread the topic so much. Because a lot of people assume that going into a meeting with your manager is going to be worst case scenario or highlighting mistakes or really just a run through of what maybe didn’t go so well as opposed to what did, and I think that’s something that we do really well here and many other companies do really well.

Valerie McCandlish:

When they do focus on the people as opposed to just the process, like Rose had mentioned, when it comes to doing this performance evaluation, when you focus on the people and the relationships and the communication, it’s going to be something that people look forward to and feel that support.

Natalie Taylor:

I agree, Val. Those are all great points. And additionally, I really liked Rose’s song choice. I think it’s maybe a fun idea to listen to some pump up jams such as Rose’s song, Uma Thurman by Fall Out Boy. Before you go into the performance management discussion, maybe you get yourself in a good mood, listen to something upbeat that might be fun.

Natalie Taylor:

So as a reminder, we do have a Mixtape podcast playlist that can be found on Spotify. So check out our podcast on Spotify and our playlist and don’t forget to follow us on LinkedIn and Instagram as well. So as always, thank you for being in the mix and we’ll see you next week.

 

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