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CIPD Podcast 130 - Strength in numbers: what's new in performance management
Date: 07/11/17 | Duration: 00:17:21
Over the past year the issue of performance management has been much debated, largely owing to several high-profile organisations publically abolishing their annual appraisals in favour of more regular systems of feedback. In this episode we’ll be looking at some of the latest trends in performance management from appraisals and smart objectives to performance ratings and employee involvement.
We’ll be talking to Jonny Gifford from CIPD, about what the evidence has shown in the field of performance management, James Brook from Strengths Partnership about a strengths-based approach, and Ali Mohammed from Great Ormond Street Hospital about the practicalities of embedding good performance management practice across an organisation.
View the full podcast transcript
Philippa Lamb: The annual appraisal is dying: publicly scrapped, ditched or even axed by a raft of global corporations. Its demise sounds so radical but is it really happening? Well not exactly according to Jonny Gifford.
Jonny Gifford: In many cases even where they say they’ve got rid of annual appraisals they haven’t. What they’ve done is they’ve supplemented it with much more regular performance conversations. So overall the emphasis shifts from performance management being a once a year, or perhaps a six monthly thing like a tick box exercise that you go through, towards much more regular coaching-type conversations, more focused on learning and development, more engaging with the challenges that people are grappling with on a day to day basis. But there can still be a place within that system for an annual review and many organisations that supposedly have made revolutionary changes still have annual reviews.
PL: Jonny’s a research adviser at the CIPD and he reckons the winds of change are blowing through performance management. That is prompting a lot of HRs to reflect on their own systems and structures. If you’re one of them hear this.
JG: I think the number one thing to get clear is what are you trying to achieve from performance appraisal? Many organisations come at it from the point of view of well we want performance appraisals to be developmental, to help people actually improve in their performance and we also want them to be holding people to account and linking it to things like pay. And the evidence suggests that the way in which managers go about making decisions for those two different things, so giving feedback for learning and development on one hand and giving feedback to hold people to account on the other hand are very different. The basic message that I draw from this is that these two types of performance discussions take us psychologically to very different places and it’s not really realistic to expect people to be able to do these at the same time. I think that as individuals we can all identify with this. If you’re going into a meeting that you know is going to determine your payout for the next year and your manager starts talking to you about learning opportunities through the year in the back of your mind you’re saying, “Come on just…”
PL: Tell me how much.
NM: “…just tell me what the answer is, cut the crap!”
PL: So we need clarity about the purpose of performance management and how do we get that?
JG: By having regular performance conversations through the year that are very much focused on learning and development, what do you need to perform now and then you can have your pay discussion at the end of the year for example which has got a very different tone to it, but don’t expect to be able to discuss those two things together.
PL: So how do you balance those two elements? How do you space those conversations? When should that talk about pay happen and is it related to the development conversations at all? James Brook thinks hard about questions like those. He runs Strengths Partnership, a consultancy that's all about peak performing workplaces.
James Brook: I think there's no right and wrong answer and I think nobody’s really found the perfect solution. I think what we would say to clients is ideally what you want is you want to have regular coaching dialogues, regular performance coaching and career development dialogues and then have a dialogue at the end of the year, use a simple three point rating scale like met expectations, below expectations and exceeds expectations. And then give people salary increments based on marker factors, maybe inflation’s in the mix as well and performance obviously. So keep it simple but all the different alternatives to rating and linking that to pay are not straightforward and not perfect either, for instance when I was at Yahoo as Head of Talent we used a ranking process where you ranked everyone in your team from one to ten.
PL: Hugely unpopular.
JB: Yeah hugely unpopular exactly! So that in itself is fraught with difficulty. So I think the key thing is to keep it really simple and in so far as possible to break the direct link.
PL: What we’re talking about is conversations and when it comes to learning and development conversations goal setting is the meat in the sandwich.
JG: Where the money really is at is with regular performance conversations and we know for a fact that this is what’s needed to help people improve their performance. So we know from the evidence that targets and goal setting are very important or very influential drivers of what motivates us to perform. We’re more motivated when we’ve got really good goals to aim for but in order for that to work we need to know how we’re doing on a fairly regular basis.
PL: So without appraisal a goal is pointless but what does a good goal look like. James Brook thinks there are two key elements.
JB: I think the key thing is to ensure that the goals are aligned with the overall team goals and organisational goals and for the line manager to be stretching the employee beyond their comfort zone.
PL: So aligning individual goals to organisational ones lies at the heart of good performance management and I've come to a place where they’re very preoccupied with getting that right. We’ve all heard of Great Ormond Street Children’s Hospital and Ali Mohammed has been HR director here for the last five years. In that time he's overseen a consultation across their 4,000 or so employees and out of that came four hospital priorities, they don’t call them goals anymore. Now all employee objectives have to fit with them.
Ali Mohammed: So you go around having great care: you won't be surprised to know great, safe care is number one, about having a great place to work and learn, about having a great place for research and innovation and finally about technology as well. So we’re investing a lot of money in technology as a hospital.
PL: So people are setting their own priorities?
AM: With their managers, so they set them and they translate that priority into something that's meaning for a local level. As an example I was talking to one of the teams this morning from genetics and they were saying well we’re not as strong as we’d like to be on research yet so we’re going to be setting some clear objectives around the research agenda of the hospital in the wider sense and so a lot of our objectives will be focused on research this year and getting our academic work up to scratch where it should be. And so it’s really interesting that it’s really starting to embed itself in the work.
PL: As you’d expect Great Ormond Street’s thousands of patients are the focus for the hospital’s performance management strategy and Ali Mohammed’s plan is to bring that patient experience into every objective that's set.
AM: One of the huge bits of work we’ve done as a hospital which has been very, very successful I think is around our values work and so again this started about three, three and a half years ago, a massive consultation exercise across thousands of staff, lots of patients, we got children involved with it as well to say what mattered to them. For the younger children we got simple sheets for them to draw in and they could just draw things they liked or didn’t like about being here and what they did like and didn’t like about the staff. And we got back such powerful feedback and we’ve used all of that, without editing the language, into our values framework and that language then goes directly into our performance appraisal systems as well. So I’ll give you two examples: on the positive side the number one thing that children said they liked about the hospital was the fact our staff are so friendly and smile a lot.
PL: That's great! You must be pleased to hear that?
AM: Yeah that's a good thing. And on the negative side the thing they hated the most was waiting and obviously children come here with very complex conditions and they can often have to see two or three clinical teams on the same day so they may have to wait for several hours between the appointments before the next team is available because they will be seeing other patients.
AM: And so we’ve done a whole project around that to deal around reducing waiting for children and keeping them more entertained, bringing in buzzer systems as well so when they're away. So what we try and do is, and bringing that back to the appraisal conversation is, where people are putting forward the innovations we try to link it back to the things that children and parents said that they actually wanted our staff to do rather than just ideas our staff had had which may be a good idea: it may be that we’ll do those as well but we’ll try to link it back to what people actually want.
PL: I remember interviewing clinical staff for a podcast in this series several years ago and the sense we got from the excellent clinicians we talked to was this sort of aspect of their work thought they kind of understood it was stuff that had to be done it just was never going to be a high priority for them because it wasn’t about their core job which was clinical work, are you managing to embed the two together do you think?
AM: I think so. I think if you wandered around our hospital I'm pretty sure that anyone you spoke to would be able to tell you what our values were as a hospital, we know, we test this ourselves and we know that 98% of our staff at any one time can tell you what the four values are. So I can prove it with data, but more importantly than that I think they actually understand what we’re trying to do with them I think and they see them in practice as well.
PL: So it’s not just box ticking, it’s not just admin, they understand the purpose?
AM: Yeah we’ve just had 200 new nurses join us last month and I went and did the induction talk for them and it was really interesting to see already people starting to talk in the way that we would, not in a kind of robotic way but I think in a way that actually reflects what we’re trying to stand for as a hospital. And these are brand new nurses; just finished their degree courses, coming straight in and already we’ve recruited people there in large numbers who fit our values. So I think the fact that we stand up and talk about those kinds of things means that people see the executive directors talking about values and the importance of appraisal and training and then it’s much easier for them to do it on the ground.
PL: And how about Ali’s personal dream for Great Ormond Street’s performance management?
AM: I guess my nirvana in a hospital sense would be getting patients involved with the appraisals of staff, so that would be my feeling. My ideal would be getting children and parents involved with the appraisal of staff.
PL: And you can see how great that could be but when it comes to making sure that employee voices are heard too some of the old rhetoric is now being demolished by evidence-based research, goal-setting is a good example. You might think that having employees set their own goals is the best way to get those goals achieved but it isn’t, the evidence says that goals set by managers are just as effective or even more so. That's got to be a big surprise to a lot of people I think. Here’s Jonny.
JG: Yeah it is and I think if we’re going to be evidence-based in the way we approach this we need to accept that but what it doesn’t mean is that employee voice is not important within performance management.
PL: So how do you bring that in?
JG: Well where it’s really important is within the performance feedback or the appraisal process. So one of the biggest factors in whether performance feedback or appraisals leads to improved performance is how employees respond to it. It sounds like a really obvious point but it actually has some implications that we might not consider normally because one of the biggest factors that influences how employees respond to feedback is whether they perceive that feedback to be fair and one of the things that is linked to that is whether they’ve had a voice and, if for example appraisals are linked to decisions on pay and things, even if that voice from the employee doesn’t affect the final decision if they’ve had the chance to talk it through within performance feedback they're more likely to respond to it positively and they’re more likely to improve their performance as a result.
PL: James Brook likes to follow the evidence too even if the outcomes might seem counterintuitive. Thinking about the feedback element in appraisals, strength-based assessment of performance, let’s talk a bit about that. I think it will be a new idea to some people, how does it work in practice, what exactly does it involve?
JB: It’s about helping individuals understand what naturally energises them, what they’re drawn to and where they can achieve excellence. And it’s helping them build skill experience and agility in those areas where they're more naturally inclined, where they have a passion for what they’re doing and they’re likely to excel, as opposed to trying to stretch them in areas of weakness which are energy draining areas for them and what we know through over 12 years working in this area now is people like to have their strengths confirmed and validated but they also like to be stretched in areas of strength. It’s very compelling. In fact a 2005 study, a very large study, 135 organisations around the world showed that strengths-based approach to performance management showed that focusing on personality strengths, focusing on performance strengths can increase performance by 40%.
PL: Most managers tend to allocate tasks based not on proven strengths but what they think people are good at and that's a problem because there can be a big difference between what people are good at and what actually energises them.
JB: So people have learnt behaviours like, for example, when I was very young I learnt the importance from my parents, and my father in particular, about how it was really important to focus on the detail and to cross the t’s and dot the i’s but that absolutely doesn’t energise me. So after 45 minutes my energy drops off and of course my performance therefore drops off. So I can only do short chunks of work which involve a high degree of detail.
PL: Differentiating between what people are good at and what energises them can be tricky. Simply asking them that question can be the best route to a useful answer but where does all this focus on strengths leave those awkward, but necessary, talks about areas of low performance and weakness
JB: It’s quite interesting because if you take a strengths-based approach it actually helps you overcome the areas of weakness a lot better.
PL: Back at the CIPD Jonny Gifford is just completing a study on strengths-based performance management in action at the Civil Service.
JG: We’ve been running trials within three departments in the Civil Service and we’ve been looking at the impacts on how effective one to one performance conversations are when you put managers through a kind of strengths-based conversations, training workshop.
JG: So this is longitudinal research, we’ve got control groups to compare with intervention groups and randomisation so it’s a really high quality study.
PL: Solid research.
JG: Yeah. We compared two different levels of intervention.
PL: The first is a one-off training workshop, a half a day, at the other end of the scale there's a more extensive intervention including a change in HR policy.
JG: The question is is it worth making a start in trying to change how you manage performance in your organisations with a one-off discrete training workshop, or do you need to have a really extensive organisational development type approach where you line up all your ducks, you've got your capability-building workshops but you’ve also got your change in HR policies?
PL: And the outcome of the study?
JG: What we find is that you can have some clear impact from a discrete workshop training type approach.
PL: Isn’t that interesting, so people can put their toe in the water there, and try it out, see if it works and then progress on.
PL: Was it what you expected>
JG: It’s what we hoped for.
PL: And Jonny’s new research will be published later this month. Thanks to him, Ali Mohammed and James Brook for their insights.
The podcast team is off to Manchester this week for ACE and a string of interviews with speakers there on cyber security, productivity and unconscious bias, to name just a few of our upcoming episodes. Check back with us on the first Tuesday of December for the next one.
Thanks for listening.