Tag Archives: performance management

Inside Out E-Column

Focusing on results can lead to poor performance.

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Remember to recognize strong performance
Remember to recognize strong performance.

I want to share another insight from my late friend and mentor, David Berlo.  He always emphasized the distinction between results and performance.  Results are the outcomes you produce, and performance is how you get there, he said.  From there, he asserted that being singularly results-driven in what you measure and reward eventually leads to the deterioration of both performance AND results.  Here’s why.

Outcomes vs. Inputs

First, we all know that people tend to repeat behaviors that are reinforced in some meaningful way.  Likewise, people tend NOT to repeat behaviors for which they receive negative response.  Next, it’s important to realize that no one has direct control over outcomes (results) – unless the game is fixed or there’s an unfair advantage.  People can only control inputs (performance).

Now, if bad performance always led to bad results, and good performance always led to good results, it wouldn’t matter which one you rewarded – results or performance. But that’s not always how things work out.  Sometimes you don’t get good results even when you give your best effort – other variables can come into play.  Other times, just the opposite is true.  You can give a marginal effort and come out smelling like a rose.

That’s not how things usually happen, but look at what you get when they do.  If you fail to reward people for good performance because they had bad results, you discourage them from repeating the good behavior.  If you reward them for good results in spite of poor performance, you reinforce poor performance in the future.  The cumulative effect over time is inevitable.  Every time you focus on results in a way that either reinforces poor performance or discourages good performance, you also take a step backwards with long-term results.

Performance is the bottom line.

Of course, you have to add up the numbers on the bottom line eventually.  But even if winning in the world of business means producing results, lasting success still requires focusing on the drivers of those results, and rewarding effective execution – regardless of the outcomes in the short run.  Berlo summed it up this way: “Winning is the name of the game, but performance is the bottom line.”  Clearly, if effective execution isn’t producing the desired long-term results, you need to figure out where the disconnect is.  But it serves no purpose to penalize people for poor outcomes if they’re doing the right things in the right way. If that happens, you need to fix the systems, not the people.

So what does that mean for us in the people professions?  For HR people, it’s pretty obvious.  Some compensation and bonus programs are notorious for focusing solely on immediate, bottom line results without regard to how they’re produced – often leading to short-term “success” with negative long-term consequences. Those programs have to encourage performance that looks at the long haul. For communications people, we need to look at where the bulk of the ongoing organizational dialogue is focused.  Are we communicating effectively about the “steps to success” – or is everything employees read and hear about focused on the end game?  If it’s results we’re after, we’d better be talking a lot more about what it takes to produce them – because in the end, it’s how you get there that counts.

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Inside Out E-Column

It’s not about the money.

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Remember the movie, Jerry McGuire, and the classic line, “Show me the money?”  That may have been a big motivator for Cuba Gooding’s character, but like I’ve said before in this column, financial incentives are not the main motivators when it comes to employee engagement.  If you doubt that premise, check out a presentation made at this year’s renowned TED Conference by Dan Pink – a leading expert in the science of human motivation.  It’s 18 minutes long, and it’s worth every second.

Using research and humor, Pink makes a compelling case for the premise that financial incentives usually produce the opposite result you’d expect on engagement and performance.  He starts with research dating back 60 years from an experiment created by Karl Duncker called “the candle problem.”  Basically, people are challenged with figuring out how to attach a candle to the wall in way that would prevent wax from dripping on the table.  Duncker found that most people struggled due to what he called functional fixedness – a “mental block against using an object in a new way that is required to solve a problem.”  For example, if you need a paperweight, but you only have a hammer, you’ll have a hard time seeing it as a tool to hold down paper.  Most people eventually figure it out, but it takes them a while to get it.

People aren’t always striving for the “prize.”
Years later, another researcher, Sam Gluxberg, decided to see how a monetary incentive would affect people’s performance on the candle problem.  He told one group if they were among the fastest 25%, they would get $5.00.  If they were the fastest in the entire group, they would receive $20.00.  So naturally the people offered the incentives completed it faster, right?  Wrong!  In fact, they took an average of 3 1/2 minutes LONGER than those who were simply asked to perform the task as fast as possible, explaining simply that their results would be compared with the test standard.

As Pink points out, though, what these studies prove and what organizations do in response to that information are two different things.  After decades of evidence from scientific studies like these, guess what?  The main technique that’s used to boost performance today is still the usual array of bonuses and other financial incentives.

If money isn’t the answer, what is?
Pink says that intrinsic motivation will outstrip extrinsic motivation every time when it comes to boosting employee engagement.  And the three main intrinsic motivators he’s identified are:

  • Autonomy – people want to have some sense of independence and control over their work
  • Mastery – they are motivated by opportunities to improve and excel
  • Purpose – they are driven by what matters to them deeply and personally

Still don’t believe it?  Check out Pink’s video – and then try your own experiment.  Be prepared, though.  You may have to change the way you think – or keep believing that extrinsic motivators are the keys to engagement, and hoping you’ll get lucky enough to beat the odds.

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Inside Out E-Column

They’re not your people.

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Have you ever heard a manager ask, “How can I motivate my people?”  It’s a familiar lament, and the sentiment behind it is easy to understand.  After all, managers need to get the work done, and if “their people” aren’t motivated to do it, managers are up a creek – right?  Maybe so, but the answer to the question is not the answer to the problem.  In fact, the question reveals a basic misunderstanding of human nature in the workplace – on at least three levels.

People Have Brainpower – Use It
First, what managers typically mean when they ask that question is, “How can I get the people who work for me to do what I want them to do in the way I want them to do it?” One reason that kind of mentality can backfire is because it conveys the impression that managers have all the answers, and the job of employees is to do what they’re told. If there’s one clear lesson that came out of the quality movement, it’s that every body in the workplace also comes equipped with a brain. Any organization that fails to take full advantage of everyone’s heads and hearts as well as their hands is diminishing the potential of its employees to help the organization excel.

People Motivate From Within – Build on It
Second, people cannot be motivated.  That’s becausemotivation is intrinsic. You can give employees extrinsic incentives, but if those incentives don’t resonate with what people are already motivated by, they will have little effect.  That’s why managers have to tune in and respond to the uniquely motivating spark that exists within each person in order to produce optimal performance.

People Deserve Respect – Give It
Third, if you’re a manager, you need to understand that unless you’ve taken in slaves, or God has taken you in as a partner, employees are not “your people.”  They are independent, competent adults who expect respect, and they don’t respond well when they’re treated like children or chattel.

People Want Success – Count on It
Once managers come to terms with those basic ideas, then they can ask the more relevant and appropriate question: “How can I get the best that people are willing and able to contribute to the success of this organization?”  Here are some keys to achieving that goal:

  1. Make sure that a person’s aptitude matches the requirements of the job. In other words, don’t try to put a square peg in a round hole.
  2. Get clear alignment on responsibilities, goals and expectations.
  3. Offer meaningful rationale for decisions and actions that answers the ever-present question, “What’s in it for me?”
  4. Provide well-defined, functional processes and accessible resources that people need to do the work they are expected to do.
  5. Establish a “guidance system” with relevant, understandable metrics and a visible means of communicating about them.
  6. Use “constructive accountability” when things go wrong, and always approach people as the source of the solution rather than the cause of the problem.

While employees are not “your people,” most of them want the same thing the company does – success.  Organizations that treat employees like partners rather than property in a common effort to succeed are more likely to get there.

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Inside Out E-Column

Play, Work and Hell

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If you believe the essence of good marketing is “relationship building” – both inside and outside the organization – here’s something to think about.  I’ve written before about a communication giant and former colleague named David Berlo.  He used to say that all activity in the workplace can be classified into one of three categories – play, work or hell.

Play is the stuff that people love to do – the things they enjoy so much they’d do it without pay if they didn’t need the money.   Work is the stuff that’s not great fun, but it’s acceptable enough that people will do it if they get something in exchange that they want and don’t have.  That’s why we call it “compensation.”   Hell is the stuff that no one wants to do, and you can’t pay them enough to do it.

So how do you optimize performance?
First, whenever possible put people where they can have “fun” – not frivolous or silly things, but the kind of work that people find genuinely enjoyable.  In part, that means finding out what gets people tuned in and turned on, and then creating a culture that lets people find the work that suits them best.  You can almost always count on people to do their best on the things they enjoy most.

Second, when it comes to run-of-the-mill work, it’s pretty basic – compensate people fairly, and the vast majority will give you a fair day’s effort in return.

Finally, for the stuff that makes work feel like hell.  Start by asking yourself if it really needs to be done.  A lot of crappy work exists only because it’s been hanging around forever, and no one ever asks why.  If the answer is no, stop doing it.  If the work does need to be done, ask yourself if it can be done another way.  If it can, change it so it’s not unbearable.  If it can’t be changed, and it still needs to be done, and you can’t pay people enough to do it, you play “Let’s make a deal.”  Ask employees what they would need in return if they’d be willing to do it.  Then negotiate until you get to a place that works for both of you.  If you can’t come to a mutual agreement, you better give it up.

There’s always one more option.
You could resort to the traditional management method of just forcing people, telling them they have to do it or there’ll be – of course – hell to pay.  In fact, the question “How can I motivate my people” is often a cover-up for the question, “How can I tell employees to go through hell, and make them like it.”  If you do decide to take that approach, be sure to prepare yourself for the resulting decline in employee engagement and the quality of customer relationships.  Hmmm … on second thought, what were those other options again?

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Inside Out E-Column

Mastering the balance of image and performance.

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The other day, I was looking at different definitions for marketing.  In a nutshell, it’s described mainly as a process for getting in front of prospective customers and enticing them to buy your product or service.

  • The American Marketing Association defines marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.  Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling.
  • On Wikipedia, marketing is defined as an integrated communications-based process through which individuals and communities discover that existing and newly-identified needs and wants may be satisfied by the products and services of others.
  • Webster’s dictionary describes marketing as the process or technique of promoting, selling, and distributing a product or service.

As far as they go, those definitions are okay, but their main thrust can be summed up in one word – attraction.   While that’s important, it doesn’t account for the other vital half of the business building equation – retention.

Invest in Keeping the Customers You Have
Depending on what sources you cite, it takes 2-20 times as much investment to attract a new customer as it does to keep an existing one.  But look at where most of the business building dollars go.  It’s mainly for advertising, sales and other promotional tools and techniques designed to acquire or attract new customers.  For many marketing people, that’s essentially how they view their role.

When it comes to retention, that’s usually handled by customer relations or consumer affairs or some similar function – and only a fraction of what’s typically spent on marketing is dedicated to the work they do.

Define Marketing as Relationship-Building
Rectifying that imbalance starts with a more encompassing definition of marketing – to create, sustain and continuously improve relationships with the organization’s key stakeholders.

At a minimum, that definition begs for marketing and customer relations people to be joined at the hip in working on the company’s business building efforts.  But the implications go farther than that – to the very heart of why marketing communication and employee engagement must go hand-in-hand.  It’s pretty simple, really.  If you define marketing as “relationship building,” then it’s no longer just a promotional activity for creative specialists.  Instead, it becomes an integral part of each employee’s job.  Everyone who has an impact on customer relations – directly or indirectly – ultimately shares responsibility for the company’s marketing success.

Live Up to Your Image
Loyalty programs like “frequent flyers” are designed as a retention device, but they’re usually in the form of promotional spiffs.  While that can be effective, it still falls short of the personal relationship building that goes beyond loyalty and leads ultimately to customer advocacy.

In the end, attraction comes more from the image you project, while retention comes more from the performance you deliver.  Both are vital, so don’t get suckered into putting disproportionate emphasis on getting customers in the front door – when keeping them is so much cheaper than replacing them after they slip out the back.

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