When my company Phone2Action launched in 2013, we tried to manage employee performance with annual reviews. It was pointless. Why wait months to discuss problems that matter now? In a start-up, we needed to move faster and calibrate more often than annual reviews permitted.
We scrapped reviews and implemented a performance management system developed by Martin O’Malley, former governor of Maryland. He “disrupted” conventional management techniques well before Agile and Lean Start-up methodologies swept through Silicon Valley.
Today, many companies use “data-driven” management techniques. However, they struggle to find a balance between team and individual accountability, transparency and privacy, and actions and goals. O’Malley’s approach may help you find the sweet spot.
The CitiStat story
When O’Malley become mayor of Baltimore in 1999, the city suffered from chronic absenteeism, excessive overtime and poor response times. He implemented a data-tracking and management approach called CitiStat, inspired by the New York City Police Department’s CompStat crime analytics. Between 1999 and 2007, CitiStat saved Baltimore an estimated $350 million yet the programme cost only $400,000 per year (spent mainly on staff salaries), according to the Center for American Progress.
CitiStat required city departments to track performance metrics unique to their responsibilities. The Department of Transportation, for example, recorded how quickly it filled potholes after being alerted.
The department heads met with the CitiStat team every two weeks to review the data. If it was trending in the wrong direction, the CitiStat team and department head would brainstorm and test a solution. At the next meeting, the data would reveal whether the follow-up actions had made a difference. By 2007, the Department of Transportation was filling 97 percent of potholes within 48 hours of notification.
Other cities took note of O’Malley’s success. Mayor Adrian Fenty introduced a version called CapSTAT in the District of Columbia Government, where I learned the system. We used it to track major initiatives such as school openings.
“CapSTATs” were intense accountability meetings that gathered all the agency heads. When an initiative hit delays, there was no place to hide. The numbers, the colors (green for on track, yellow for delayed and red for behind) and mapping revealed the status of everything.
Having observed the effectiveness of CapSTAT, I wanted to create a version for Phone2Action. We called it ActionSTAT.
Why it’s different
There are different schools of thought in performance management. ActionSTAT addresses three conflicts that arise in most performance evaluation systems.
1. Team v. individual
Traditional employee reviews often happen in isolation and emphasise individual achievements. In contrast, ActionSTAT holds both the team and individual accountable by measuring how people spend their time. The system connects individual actions and goals to departmental and company goals.
This kind of “systems thinking” is hard to achieve in government but comes naturally in technology companies, which have standard measures of success. In software-as-a-service (SaaS), these could include annual recurring revenue (AAR), monthly recurring revenue (MMR) and gross retention.
For example, let’s say we ask each salesperson to make 40 calls per day. The salespeople who perform this “leading action” close more deals than those who don’t. The action appears to work, so we keep doing it. If salespeople made the 40 calls but didn’t close more deals, we’d test other leading actions. Ultimately, we trace the salespeople’s work to AAR and MMR.
2. Public v. private feedback
One of the hardest aspects of performance management is giving and receiving feedback. When a manager gives an employee feedback in private, the company doesn’t gain institutional knowledge. Only two people learn from the experience. When performance management is a team activity, a culture of continuous learning, improvement and transparency can emerge.
Phone2Action holds ActionSTATs every Thursday at 10 a.m. The meetings are open to everyone but focused on one department each week. We start ActionSTAT by reviewing a dashboard that shows the most important metrics of company health. Those include our load time, conversion rate and retention rate.
Next, we look at the department’s lagging indicators (marked green, yellow and red, just like in CapSTAT) followed by its “leading actions.” Often, we look at individual leading actions, too. The data sparks questions, conversation and feedback from across the company.
Over time, a few things happen:
- Everyone in the company gets used to providing and receiving feedback.
- Everyone gets used to discussing performance publicly.
- Everyone sees what people do in other departments and therefore learns how each team member contributes to the company’s goals.
The health metrics never change, but how teams spend their time can. By discussing the leading actions of each department, we set and correct behaviours.
3. Actions v. goals
ActionSTAT distinguishes between how people spend their time (leading actions) and lagging indicators (goals defined by metrics). This is crucial because companies that manage solely by objectives cannot address the behaviors that drive the outcomes.
If we want to lose weight, jumping on the scale everyday won’t change anything. What we eat and how much we exercise will. The same applies to companies. If we measure lagging indicators but not the activities that influence them, we will not identify what works.
Every ActionSTAT becomes a chance to refine leading actions. If we wait one full year to evaluate an employee, we see if she hit the metrics, but we cannot correct behaviours along the way. Performance management is about continuously identifying the actions that produce desirable outcomes.
A thing of the past
Every tech company wants to be “agile,” but traditional employee reviews hinder that culture. Annual reviews exhaust managers and stress out employees who might have spent months working tirelessly – in the wrong direction. Neither the company nor the employee can afford to wait a year for the feedback.
Today, people choose work environments where they can learn continuously and understand how their actions contribute to the company’s success. Annual reviews are thing of the past.
This article was originally posted here on Entrepreneur.com.
An Excellence Approach To Nurture Star Performers
Talent management is the commitment to continuously nurture and align individual attitude and performance, job requirements and organisational culture through excellent performance management.
1. An excellent view of Talent Management
Any sports team needs to measure the vital statistics and performance of each member. “Metrics” like cadence, heart rate, output ratios etc. are important, for the whole to eventually be greater than the sum of its parts.
Similarly, leaders need to measure (without micro managing) employee performance to get a better understanding of what makes the individual stand out. Leaders need to understand how to adapt environments so that everyone can be exceptional.
Not creating a culture of unhealthy competition, but one where every individual’s contribution is understood and valued, and individual work experience is adjusted to accommodate uniqueness, will keep individuals performing at their peak, while enjoying what they do and understanding the purpose of their work.
2. Nurturing star performers
Employees should be given the best possible opportunity to serve in a work context that is optimal for their skillset and temperament. Talent management is based on the organisation’s commitment to surround all employees with people, practices and processes that will grow them to their full potential.
From a deep understanding of the talent pool a business can distinguish between top, great, good and poor performers. Having a suitable and fair measurement tool in place is critical in this regard. This allows management to clearly understand why people are in different performance categories, and provides insights on what pro-active actions can be taken to develop people into their full capacity.
People are highly influenced by work-related relational contexts and environments. Poor performers can become top performers when there are leadership changes or job changes that simply fit better, but also vice versa. Top performers can become poor performers due to illness or other job related changes. There have also been cases where top industry performers join a different organisation and then struggle to perform due to the individual not aligning with the new organisational culture.
Excellent talent management considers all of these factors:
- Understand who the star performers are, and why they are viewed as top performers. (Know and acknowledge what they contribute in terms of both job deliverables and attitude).
- Understand the relationship between the top performer and their leader.
- Understand the culture of the department and why this fit works for this individual.
- Then, for the future of work: Consider adapting working conditions or terms of employment in order to keep the star performers (Eg. Flexible working hours, virtual offices, or shorter terms of employment to ensure growth opportunities.)
The biggest contributing factor to ensure excellent talent management is to continuously understand and communicate what is expected from an individual, to have measures in place to know if the individual achieves this, to know what value this adds to the business – and then making sure that they are compensated accordingly.
3. What star performers desire from corporate culture
People don’t want to work merely for personal gain. They want to connect and contribute to a business that shares their values and contributes towards the development of a healthy world and better society.
Spiritual intelligence is becoming increasingly important. This trumps mere personal self-actualisation, and entails feeling connected to a business that has a bigger shared purpose than just making a profit.
People want to connect with businesses that have integrity, moral leaders, and feel part of a network that are responsible stewards, who will value their total personal contribution and help them grow as star top performers within a star team.
Are Our Workplaces Gen Z And Gen Alpha Proof?
Soft issues and hard tech. This is the balancing act facing corporates in the race to generation proof their workplaces before Gen Z and Gen Alpha enter the workforce, only to retreat into their technology bubbles. The question is, how do companies get the balance right?
Preparing for a new generation to enter the workplace is a lot like baby proofing your house. You spend a lot of time and money making sure this vulnerable creature, with very specific needs, has everything they need to play, grow and thrive in their new environment, without too many run ins with sharp objects that will inevitably lead to tears. But who are you future proofing for and how?
The challenge in 2018, is that your house has only just become Millennial proof. And yes, while it’s great that you’re so On Fleek with all the latest open office concepts, flexible working spaces, new internal communication channels and social media influencers that these hashtaggers thrive on, that aint gonna fly with the more independent multi-multitasking Gen Z, who will favour private enclaves and online collaborations with global teams and communities of influence. And what of Gen Alpha, the Google Glass generation who will view technology as a physical appendage and glass screens as their genuine, not virtual, reality?
The good news is that Gen Z, or iGen as they are commonly known for being weaned off milk with iPads, will pave the way for the even more self-sufficient, independent Gen Alpha. So, if you get the foundations right you can start building a generation-proof business that will stand you in good stead for the next 50 years, give or take.
The challenge with generation proofing is that we often spend all our time focusing on the hard, tangible stuff – the tech and spatial environment – and not enough on the soft issues that will actually help retain and motivate employees to not only stay and play but thrive and grow. And when we consider that Gen Z is heavily driven by career growth and is likely to have 17 jobs and 5 careers in a lifetime, we should be focusing a lot more on getting the work/culture balance right. In fact, engaging and retaining Gen Z will be a balancing act like no other, where two seemingly opposite needs play out in the workplace. Get it right and you win the prize – a loyal, integrated workforce that is connected on more levels than one.
Balancing career growth with the need for retention
Every generation is born into an era that shapes, motivates and influences their decisions. Gen Z’s world view may be largely shaped by technology, but they are also the product of economic uncertainty, having been born into a recession. So, it’s not surprising that they value financial security, job promotion and learning. As expert online collaborators who are also capable of working independently, companies would do well to embrace online learning as a powerful tool for mentorship, training and growth, especially one that promotes career promotion and professional advancement.
Balancing technology with the need for focus
Eight seconds – that’s how long the average attention span of a Gen Z employee will be. Gen Alpha will be even less. Immersed in technology from an early age, these serious multi-multi-taskers will work tirelessly across different technologies and will process information at the speed of light. The downside is that it’s going to be a challenge to keep their focus, even more so than Millennials. More than ever, companies will need to create multipurpose private spaces or pods, where these workers can retreat to in order to focus on the task at hand. These spaces should also support their need for blended face-to-face/online groups.
Balancing independence with the need for shared culture and meaning
Yes, this generation will be fiercely independent and shun micromanagement and a desk bound culture, but it will also crave meaningful work, regular interaction with management and opportunities to make a valuable contribution to society. Companies that only focus on creating opportunities for remote working and online collaborations, will miss the mark.
To retain this group, you need to focus on creating a shared corporate culture and opportunities for regular engagement. In this way internal communication will become a key driver in bridging the gap between a non-desk and desk-bound workforce and finding new ways to engage and inspire an increasingly disparate workforce.
Employee apps will become the most important channel in workplace communication bringing information, social connection and engagement together in a way that resonates with these digital natives.
Balancing privacy with the need for engagement
Internal communication will become a balancing act unto itself. How companies communicate with employees will become as important as how often and how much. Internal communication will need to move beyond intranet, SharePoint and ESN like Workplace and Yammer to embrace wearables, robotics, and virtual reality, all of which will not only reflect but drive the digital native.
As the vital link between company and employees, internal communication will need to engage employees through validated channels using curated content that not only drives the message but embeds the company’s shared values and brand ethos. And did we mention the maximum reading time should not exceed 10 minutes per day? Tough ask right?
Soft issues and hard tech. This is the balancing act facing corporates in the race to proof their workplaces to embrace Gen Z and the AI generations to follow. The mistake would be to focus only on the tangibles and neglect the soft issues that really drive retention and shape corporate culture. Making sure internal communications teams are properly trained, equipped and mandated to handle the enormous challenge, will be key to cracking the generational code and claiming your share of its human capital.
Why A Generous Paternity Leave Policy Can Be Bad For Equality
Gender-neutral parental leave policies can be great for women – but only if fathers take full advantage of the time off.
A few months ago, I had dinner with my wife to celebrate her birthday. Shortly after, as we rode along the Hudson River toward our apartment, we sighed in relief with the certainty that our son wouldn’t be born that night – because, let’s be honest, nobody wants to share a birthday with their mother. We went to bed only to wake up just past midnight to rush to the hospital. Esteban was born the next day.
As it happens, my employer recently implemented a new parental leave policy that offers 16 weeks of full paid leave to any employee in care of a newborn or adoptive child. Generous and equalitarian parental leave policies like this have a well-documented impact on curbing gender discrimination at the workplace. But, this is only the case if men take advantage of them. So, as one of the first employees to have this benefit available to me, I am going to use it fully and I plan to be very vocal about it. I have to. I owe it myself and to those who come after me.
There are three key ways that policies like this can work against gender disparities in the workplace. First, their gender-blindness is inclusive of gender nonconforming parents. No company benefit should depend upon the employee’s gender identity, though, sadly, it is still the norm.
Second, an extended period of full paid leave allows families to fully recover from the financial, physical and, often, medical impact of having or adopting a child. Finally, by doing away with the concept of a primary caregiver, which typically defaults to the mother, it removes the unfair career opportunities advantage men get when their colleagues are out caring for their offspring.
That said, this last powerful mechanism of gender equality is only effective if men take the benefit in full, too. In fact, if the norm becomes that mothers take the 16 weeks of leave and fathers return to work earlier, the policy may even work against women by removing them even longer from their careers in comparison to men.
Discrimination at work toward mothers, and more broadly toward women in child-rearing age, is a multi-faceted problem. One of these being the perception that motherhood makes women less valuable workers due to their domestic responsibilities. In fact, while women take a 7 percent hit on expected income per child – the so-called “mommy-tax” – dads actually see bump in theirs.
Countries like Sweden, Quebec and Germany have a long history of providing a generous parental leave that can be divided at will between both parents. What these countries have recently realised is these policies, on their own, are widely ineffective in fighting the traditional gender division of childcare. Fathers made little use of the benefit, which reinforced the role of women as primary caregivers. Child-rearing age for women is when the gender pay gap starts to grow. This is widely attributed to women being perceived as less valuable workers because of their role as primary caregivers. This vicious cycle needs to be broken. To close the gender pay gap, men and women workers need to be equally expected to care for their children. In order for this to happen, it is necessary for men to use parental leave benefits at the same rate of women.
Nobody can force men to take paternity leave, but we can create a culture where it is expected and accepted.
Culture is easier to build than change, which is why it is essential that the fathers of those first few babies included in new leave policies understand the implications of their actions. We have an opportunity and responsibility to set the right precedent, to serve as an example to other men in our organisation.
Gender inequality is a serious problem in our society and we must seize every opportunity to combat it – one family, one company and one industry at a time. As a man in a leadership position I have the responsibility to use my influence to combat it. Esteban has given me this immediate opportunity to make things better and I am not planning to disappoint.
This article was originally posted here on Entrepreneur.com.
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