Four Big Questions for Client Companies
- Do you conduct traditional performance appraisals?
- Is there anyone working at the company today who if they quit you would be relieved, as opposed to upset?
- Do you have a written human resource plan for 2012?
- Do you require employee suggestions?
The responses reveal a lot about what’s going on at client companies today.
1. Do you conduct traditional performance appraisals?
75% Yes / 25% No
Let me begin by saying I’m not a big fan of traditional performance appraisals. I believe that most companies continue to do them because they can’t think of an alternative. I have dug into performance management over the years and I agree with Dr. Deming, who stated that performance evaluations are more destructive to performance than beneficial. From a former trial lawyer’s perspective, they do little to protect a company when it comes to wrongful termination claims. Why don’t they work?
- Nobody likes to give them or likes to get them.
- All anybody really wants to know is if they’re getting a raise.
- If somebody gets a poor performance rating, it’s probably a management problem and not an employee problem.
- They’re too late — like telling a kid in December that they didn’t clean up their room in February.
- They’re never done honestly. Managers tend to slide to the comfortable middle or use evaluations as a tool of retribution and manipulation.
- Most importantly, they don’t improve performance. When I’ve surveyed employees and conducted focus groups, I’ve been told that what does improve performance is the dialogue entered into with the manager during the process. As I have preached, this dialogue should be an ongoing process and not a once a year event. Employees should know where they stand at all times.
What should you do instead? Start by making it a workshop for your entire company. What do the employees like about your current performance management process? What don’t they like? What would they like to see done instead? How can you present the performance management approach as something created through agreement?
Then make sure your process can answer the two most important questions of performance management:
- What are the most important things we do every day? (you’d be amazed at the variance in answers to that question)
- How do we know if we’re doing our jobs well without having to ask or without having to be told? (because we understand the benchmarks of quality so well)
Until you can ask these questions, circling 1 to 5 on some form is a waste of time.
I encourage all HR That Works members to watch the Performance Management Training Module video, as well as the ROWE (Results Only Work Environment) Webinar and others on performance management on the site. Please also look at the performance management personnel forms.
71% Yes / 29% No
This response doesn’t surprise me. I’ve asked this question in workshops hundreds of times. I always get a painful smile as an answer. So why are these people still at the company? Here are some possibilities:
- They’re related to ownership — the problem with nepotism.
- They’ve been there so long that ownership feels guilty about terminating them. The company is also afraid of age discrimination-type claims.
- Ownership or management might have formed a personal relationship with this person. Perhaps their families know each other. How can I fire Bob when we’ve been friends for 10 years?
- We’re afraid that the standard operating procedure will walk out the door with the employee. If we haven’t generated standard operating procedures and best practices than their intellectual capital leaves with this employee, even if they’re a poor one. This is one reason why it’s so important to build and document standard operating procedures as if you were trying to franchise your business.
- We fail to document their poor performance. This is one reason why lawyers tell employers to “document, document, document!” Make sure you train your management team on proper disciplinary and documentation procedures. To do this, see the Discipline and Termination Training Module on HR That Works.
- We don’t want be viewed as a bad person — nobody likes being a villain. We know that this person will be upset with us. We know they’re going to try to get other people upset with us. Heck, we might even be upset with ourselves, too.
Jack Welch famously cut out the bottom 10% of employees at GE every year while driving it to become the No. 1 company in its industry. He said it wasn’t being unkind to the 10%, but being kind to the other 90%. There’s wisdom in culling the herd, and any emotional baggage has to get out of the way if we want to be a great company.
3. Do you have a written human resource plan for 2012?
36% Yes / 64% No
Chances are that your company has an overall business plan and, hopefully a sales and marketing plan as well. You might even have a plan for process improvement, etc. Why doesn’t the No. 1 line item at every company have a plan attached to it?
Understand this: If roughly two in three companies don’t plan HR practices then they’re putting themselves at a competitive disadvantage to the one in three who do! Who do you think will hire more effectively? Who do you think will have a higher employee retention rate? Who do you think will be the more productive workforce? Who do you think will conduct more training? Who do you think will get rid of dead weight more readily? Who will do a better job of limiting employment-related lawsuits?
So what’s stopping anybody? My answer: A misallocation of time and money. Having just completed the 2012 HR That Works survey, I can tell you that time is the overriding issue in this area. HR is an incredible opportunity that’s undervalued because we are stressed about our time. However, what we all know is that time and money aren’t true objections; they’re an allocation of resources. We tend to allocate our time and money where we get the highest return on investment. If you have any doubt about the return on investment of HR, then go through the HR That Works Cost Calculator.
4. Do you require employee suggestions?
33% Yes / 67% No
Imagine that. Two-thirds of companies not systemically tapping into the brilliance of their workforce! How many companies do you know with voluntary employee suggestion systems that work?
In my experience, none. Many years ago, Peter Drucker had lunch with a good friend of his, Martin Edelstein (the editor of Boardroom Classics). He asked Martin how his meetings were going. Martin answered, “Just like everybody’s meetings go.” Peter asked him if he requires his employees to provide suggestions at every meeting. His answer was, of course, “no.” Drucker suggested that he do so for his next meeting. That single suggestion changed the entire culture and business of Boardroom Classics to the point that they produced an excellent book and program called I-Power about it. We had them present a Webinar for us that is available to all HR That Works Members.
Dr. Deming taught that as a part of Total Quality Management, you need to have quality control circles that engage in what’s known as kaizen, or constant improvement. This suggestion revolutionized manufacturing worldwide. He also recommended that manufacturers build toward perfection, rather than toward a tolerance. This is one reason why Lexus brands itself as the “Relentless Pursuit of Perfection.”
Are you motivated to great HR practices? How long will it be until you start doing mandatory employee suggestions? Remember, none of us are as smart as all of us!
Conclusion – These four huge HR questions are related directly to the success of any business, including yours. They represent a competitive advantage and a provable ROI.