performance appraisal

Companies with older workers less productive

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j0415797They’ve been called a “drag on productivity” in a study that examined the performance of hundreds of companies in Britain and Germany.

It found that the more over-50s a company employed the less likely it was to increase productivity over a two-year period. Even a 1% increase in the proportion of older staff led to a greater chance that the company would stand still rather than improve its output.

The situation was much worse in Germany than Britain. There 57% of the companies had workforces with at least 20% of the staff over 50, compared to 41% in the UK.

Productivity was not reduced by older workers working more slowly but by the company’s reluctance to invest in training them.

The less successful companies also had weaker appraisal systems meaning that individuals were not held accountable for their productivity levels. Well appraisal systems have come in for a lot of criticism lately and in this case it suggests that it might be management not doing their job rather than the workers.

Certainly there are companies, such as BMW, that look after older workers better.

And they need to because there are more older workers around. Three quarters of people aged over 50 are in employment in the UK according to the ONS compared with two-thirds in 1994. And one in eight aged over 65 is still in work.

Discriminating against older workers is counter-productive. Often older workers have the unwritten knowledge about the company; their attendance is usually better, and they generally have a more positive attitude and are more loyal. Here’s an American take on this.

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Performance reviews not dead yet

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pen_display_accomplished_1600_wht_7579Many experts believe that performance reviews don’t work, that managers and staff play the system, and that people should be trusted to get on with their jobs.

Performance reviews are  held to be a product of Theory X  thinking (and all that went with that) and were famously criticised by quality guru Deming who said “The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance

New research from CEB (reported in People Management) suggests that HR people are in agreement. Only 4% of them felt that performance reviews were effective.

And 42% of the 9,000 managers and employees surveyed across 18 countries said that “significant changes or a complete redesign was needed to improve their existing performance review processes” which were branded ‘backward-looking, inconsistent, and too complex‘.

There is a problem however. Ditching performance reviews can have a negative effect on productivity as Microsoft found. The survey also found that not only did productivity drop by 10% but that employees were more likely to leave and fewer employees thought pay rises were fairly allocated.

Less than 5% of managers said they felt able to manage effectively without a rating system. 

The survey doesn’t say what was used to replace performance reviews but poor as performance review methods might be it appears that many staff and managers like a degree of structure no matter how unreliable.

After performance appraisal what’s the next idea to ditch?

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business_professionals_standout_1600_wht_5372Following reports of the demise of performance appraisal Philip Delves Broughton, writing in the Times,  asked what else could be dropped?

It was quite a lengthy list, enough to give HR people sleepless nights I would think.

If you want to read the full story check out the newspaper but here is a list of its targets.  (The comments are mine by the way not the article’s author’s)

  • Big Data – assumes numbers can’t lie. Never heard of GIGO?
  • Empowerment – don’t believe it the bosses still want to be in charge.
  • Disruption – Harvard academics love these terms. What happened to innovation and creativity?
  • Being more like Apple – Apple may make wonderful products (I’m writing this on one) but there are questions about how Steve Jobs made it work.
  • Downsizing/rationalising/optimising/change management – Scientific Management, BPR, you name it the experts keep recycling this stuff.  I know I was one!
  • Chief Culture Officer – one person can’t be responsible for organisational culture although CEOs have a lot to answer for in setting the tone as role models.
  • Passion – beloved of life coaches and similar who love to put it in their CVs and on their websites..
  • The off-site – used to be called outdoor development or any training activity away from the office where you could all drink too much and maybe speak some home truths – to be regretted once you get back to the office.
  • Core competence – you mean one-trick ponies?
  • Mindfulness –  the latest fad (possibly replacing NLP). If you want to be a buddhist monk that’s fine but dabbling in these psychotherapeutic areas can create more problems than they solve. Same goes for neuroscience-based training. But that’s another story .

I’m sure you’ve all got your own bête noirs so feel free to share them.

But remember, consultants make their money from selling you ideas and systems so there will always be something else coming along (probably recycled but nobody stays in top jobs long enough to notice).

Off the top of my head what about workforce planning, or job evaluation, Management by objectives, job enrichment? And what happened to the balanced scorecard? You get the gist.

Feedback – whose responsibility is it?

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360degrees2Working with a client the other day he mentioned that he never got feedback from his boss on how well he was doing. When I asked him if he ever asked for feedback he admitted he hadn’t and that he avoided bringing it up.

When I asked him why he thought his boss never gave him feedback he thought it might be because he didn’t have anything good to say – which is why he avoided bringing it up.

When questioned further he wondered, on a slightly more positive note, whether or not his boss just wasn’t used to praising staff or hadn’t been trained to do it.

It started me thinking about whose responsibility it is to provide feedback? Is it just up to the manager to do this and only at specified times of the year as part of the dreaded performance review process? Surely not.

Why shouldn’t people ask their bosses for feedback as part of their own career management?

And why stop at bosses? As anyone who has undergone a 360 degree feedback process knows it is very interesting to find out what other people think about your performance and behaviours and can be a powerful incentive to change or improve.

So maybe managers should give themselves permission to give staff feedback at any time it is appropriate and staff should be more assertive about asking, even demanding, feedback.

Years ago Schein said that everybody at work wanted to know how well they were doing. Recent research however suggests that it doesn’t necessarily work out so well for women. Women in groups receiving feedback seem to perform less well.

Are Leaders more guilt-prone?

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DSCF1550rWhich employees work harder, are more altruistic and willing to help others, are higher performers, more committed to their employers and able to see the bigger picture?

According to research at Stanford’s Graduate School of Business it’s people who are more guilt prone who make better leaders.

Using the TOSCA (Test of Self-Conscious Affect) and performance ratings Francis Flynn and Rebecca Schaumberg found that those employees with higher levels of guilt were also the ones with the higher performance evaluations.

They were also seen as more committed to the organisation and seen as stronger leaders by their peers.

Even stranger you might think is the fact that there were also more likely to accept redundancies as being necessary for the company and carry them out. They may feel guilty about it but they can rationalise layoffs in the interests of the organisation. So they see the bigger picture.

Previous research has shown that being conscientious is a good predictor of employee performance and an important element in effective leadership and recruiters often look for stable extraverted personality types. This is the first research to suggest that employing people who are more neurotic has advantages for the employers.

And you might think that behaving in this way might have a downside for the individuals but according to Flynn they are no more stressed than other employees and don’t have lower levels of job satisfaction.

It seems that there is also a connection between guilt proneness and altruistic behaviour in terms of giving to charities and helping out colleagues.

The research was carried out in a Fortune 500 company’s finance department so may not be applicable in other functions. But it’s intriguing and if you believe that we should have more diversity in terms of personality variables you will probably welcome it.

Source: HBR Jan-Feb 2011 issue

Are Performance Reviews still decimating staff?

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business_people_line_door_1600_wht_9932Reading an article by Stephan Bevan from the Work Foundation recently I learned that forced distribution performance reviews aren’t a thing of the past but are alive and well.

He wonders why – in a world where top management talks about employee engagement and discretionary effort (i.e. getting something for nothing from your staff).

Companies are still using this kind of performance review where the bottom 10% are destined for the chop via a performance improvement plan (PIP) or by being “performance managed” – usually out of the company.

Apparently it’s not so common now in the USA because of legal challenges (Jack Welch would be unhappy about those) but is on the increase in the UK.

Yahoo talks about quarterly performance reviews, General Electric calls it the “vitality curve” (presumably if you’re not vital you’re out). The Civil Service call it “expected” or “guided distribution”.

The bottom line is that a manager can have a really high performing team but has to put 10% of them into “special measures” as Ofsted would say – even though they might all have exceeded their targets!

As Bevan says this approach is toxic. And generally performance review systems don’t work, and are based on faulty scientific thinking around distribution curves. Staff themselves aren’t happy with being rated average because they met the targets they were expected to.

We may not have decimation in its original sense viz 1 in 10 roman soldiers killed by their colleagues as a punishment for the whole cohort showing cowardice or disobeying orders, but we do have 360 feedback!

Rude, Arrogant, and Powerful

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S1032849Being conscientious is a good predictor of performance in a job.

It doesn’t mean however that you will be seen as powerful.

The evidence suggests that it is the rude and arrogant person who is perceived as being a powerful decision-maker.

A paper published in Social Psychological & Personality Science (2011); “Breaking Rules to Rise to Power...” found that people rated rule-breakers as being more in control and leaderlike than conscientious types.

Researchers in Amsterdam wanted to see if the reverse were true. If you break the rules are you seen as more powerful? And the answer appears to be yes.

People in positions of power have more freedom to act and can ignore the rules. Research has shown that powerful people often ignore the social norms of he workplace for example by taking more than their share of the biscuits from the plate, eating with their mouths open and spreading crumbs.

In the Dutch experiments participants were given scenarios in which people violated the rules at work by stealing coffee and ignoring financial anomalies. A control group was given similar scenarios without the norm violations. Participants recognised the norm violations but also rated the culprits as more powerful.

Then, in a real-life experiment in a waiting room, one of the confederates who arrived late and threw his bag on the table was perceived as the more powerful. In another video experiment they tested the hypothesis that powerful people react with anger rather than sadness to negative events, in this case treating a waiter brusquely and dropping cigarette ash on the floor.

The authors say; “as individuals gain power they experience increased freedom to violate prevailing norms. Paradoxically these norm violations may not undermine the actor’s power but instead augment it, thus fuelling a self-perpetuating cycle of power and immorality“.

Rudeness is a cross we have to bear in the workplace. Surveys show that the percentage of employees experiencing rudeness at work more than once a week doubled between 1998 and 2005 from 25% to 50%. In fact in 2005 25% of employees experienced rudeness every day.

This has a negative effect on the organisation as people lose focus, try to avoid the rude person, are less productive and think more about leaving. And you don’t have to be the object of the rudeness. According to American researchers, just witnessing it effects your cognitive ability in problem solving, flexibility, creativity, and helpfulness. Like stress the rude encounter makes us more stupid.

And it seems more than 9 out of 10 people get even with the rude person or the organisation in some way eg through vendettas. And rudeness seems to be contagious making us ruder and more aggressive than we would be normally. So not good for the organisation let alone customers and employees.

On the other hand research at the University of Michigan shows that virtuous behaviour has the opposite effect. The more people experience helpfulness, forgiveness, generosity, courage, and support – or even just witness it – the more they are likely to do the same.

So virtuous behaviours encourage flexibility, creativity and good team work and makes employees feel good at work, thus enhancing employee engagement.

But what of the rude and arrogant people themselves? A report in the Psychologist this year described the work of Russell Johnson and colleagues at Michigan State University who developed a Workplace Arrogance Scale (WARS) to use in their research. This measured behaviours such as “shoots down other people’s ideas in public“.

First they defined arrogance as “behaviours that exaggerate your importance and disparages others“. So first cousin to narcissism except that narcissism includes thoughts and attitudes that don’t effect others such as self-admiration.

Their research showed that arrogant individuals report fewer examples of organisational citizenship behaviours such as helping people and going the extra mile. So confirmation of other research in this field.

They then looked at how good arrogant employees were at their jobs. They used the WARS, measures of overall task performance and performance in specific areas such as customers, relationships, and development. Individuals rated themselves and were rated by nominated individuals in their organisation – a selective 360 degree survey.

They found that arrogant workers were rated as being weaker in almost every way by their raters. Some people who rated their managers as arrogant also rated them as poor across the board so there was possibly a horns (negative halo) effect or just some of the payback other researchers have found.

Perhaps surprisingly arrogant employees also rated themselves weaker at relationships and overall performance with both their supervisors and direct reports in agreement. In another study the arrogant individuals reported lower self-esteem and more job-related strain. They also seem to fixate on minimising mistakes rather than focussing on success.

As the research didn’t include objective measures such as sales figures, it might be that arrogant employees realise they are ostracised and because of their low self-esteem join with their critics and discount themselves about their perceived performance.